Climate vagaries like extreme heat and flooding could put over $65 billion worth of export earnings at risk across four key apparel hubs by 2030, warns a new report.
THE RESEARCH: The research by Cornell University’s Global Labor Institute (GLI) and global asset management firm Schroders about the economic impact of climate breakdown—specifically, extreme heat and flooding—on apparel manufacturers and workers, looked at the climate vulnerable apparel industries in 4 countries.
- The countries—Bangladesh, Cambodia, Pakistan and Vietnam—collectively represent 18% of global apparel exports, house approximately 10,000 apparel and footwear factories and employ 10.6 million workers.
- Extreme flooding and heatwaves are already affecting these regions. In 2022, a third of Pakistan was underwater due to unprecedented flooding while earlier this year, Dhaka experienced an eleven day heatwave with temperatures reaching 40.2 degrees °C/ 104.3°F.
- Using projections, the researchers analysed future heat and flooding levels in the 4 countries and the data was then used to estimate industry-level outcomes for 2030 and 2050 by comparing a ‘climate adaptive’ scenario with a ‘high heat and flooding’ scenario.
- The results show that extreme heat and flooding will result in significant earnings and jobs foregone across all four countries, due to slower industry growth as a result of lower productivity.
- Compared with a ‘climate adaptive scenario’, the ‘high heat and flooding’ scenario shows a $65 billion shortfall in projected earnings between 2025 and 2030, representing a 22% decline in export earnings.
- Similarly, the high heat and flooding scenario analysed shows that over 950,000 fewer new jobs would be created, representing a 7% decline.
- These projections rise significantly for 2050, representing a 68.6% in foregone export earnings and 8.64 million fewer jobs under the ‘high heat and flooding’ scenario.
- The authors of the report Higher Ground were Jason Judd, Angus Bauer, Sarosh Kuruvilla and Stephanie Williams.
NOT EXTERNALITIES: Climate ‘loss and damage’ for manufacturers and workers are treated by brands as externalities—someone else’s problem.
- New Due Diligence rules in Europe shift some liability to brands and retailers can lead to bigger investments in adaptation – cooler workplaces, flood prevention and basic social protection systems.
- However, heat and flooding measures do not appear in initial drafts, due to the industry’s focus on mitigation.
- Key will be introducing set standards and protocols for working hours, effort levels, rest and hydration to be collected and reported daily, as well as enforcing meaningful sanctions for violations of standards.
- Workers need these investments now because extreme heat standards and flood protections are non-existent, or the systems are easy to game. And, in order to deal with the day-to-day costs of climate breakdown, workers need social protection systems in place and living wages. And ultimately, regulators and brands need to treat heat and flood events as health hazards.
