Global Fashion Industry Facing A $65 Billion Loss. Why?

global fashion industry

A significant negative impact on the global fashion sector, with four of the top-producing countries for clothing at risk of losing out on $65 billion in earnings by 2030. According to a study by Cornell University and investment firm Schroders, extreme heat and flooding are expected to have these consequences.  

According to the findings, which were presented on Wednesday, Bangladesh, Pakistan, Vietnam, and Cambodia are regarded as being particularly at risk, with a 22% decrease in export revenues — and a wider economic blow — expected by the end of the decade.

The Fashion Industry

Researchers from Schroders and Cornell’s Global Labor Institute recommend adjusting work schedules and making sure employees receive adequate rest and water in reaction to the anticipated disruption. Fashion businesses that get a lot of their materials from these nations should also do the same.

“Among the suppliers and the buyers we talked to, not one had their eye on these two issues (heat and flooding),” said Jason Judd, executive director of Cornell Global Labor Institute.

“The climate response by the industry is all about mitigation, about emissions and recycling, and little or nothing with respect to flooding and heat,” Judd said. 

The Paper’s Recommendations

The document also suggested that there be possibilities for paid leave for workers during severe weather and that work may be suspended in such circumstances. Additionally, it is a good idea to consider shifting factories to regions with lower risk. The researchers did emphasize that fashion labels should support their suppliers in taking this action and that they too have a role to play in this.

The four nations, which account for 18% of global garment exports and employ 10.6 million people in apparel and footwear manufacturers, will also be forced to shut down their operations due to flooding.

According to the report, the entire reduction in productivity would result in a $65 billion shortfall in predicted earnings between 2025 and 2030 or a 22% decline, and 950,000 fewer jobs being generated.