For small-scale agriculture, the key differentiator will be adding value to the fibre or seed, or both, either through the production of higher value-added fibres (long/extra-long fibres, such as Peruvian Pima cotton or naturally coloured cotton in the semi-arid region of Brazil). But perhaps the most important factor for this second scenario is the organisation of producers into associations or cooperatives.
Carbon pricing would be the most structurally embedded risk and hardest to reverse. Carbon pricing is different as it sits directly on Scope 3, where 96–99% of apparel emissions occur. That means it’s embedded in Tier 2 manufacturing and upstream energy systems. Unless those systems decarbonise, cost exposure compounds year over year.