What: Brands, regulators and investors aren’t planning for climate change risks that could cost the industry billions of dollars in lost revenue, according to a new report by Cornell University’s Global Labour Institute and investment firm Schroders.

Why it is important: Failure to adapt supply chains to manage rising temperatures and intensifying flooding could lower export earnings from four key manufacturing hubs by $65 billion by 2030 and significantly dent operating profits at exposed brands, the report found.

The fashion industry is inadequately prepared for climate change risks, which could cost billions in lost revenue, according to a report by Cornell University’s Global Labour Institute and investment firm Schroders. Rising temperatures and increased flooding could decrease export earnings from major manufacturing hubs by $65 billion by 2030. This could also prevent the creation of nearly a million new jobs.

Despite the increasing frequency of extreme weather events, many brands, regulators, and investors are not incorporating climate change impacts into their strategies. The report emphasizes that by 2050, the cost of inaction could reduce export earnings in key countries by nearly 70%, or $1.4 trillion. The industry's current approach to supply chain disruptions is to shift sourcing locations, but many of these locations are also vulnerable to climate change. The report suggests that better regulation, binding standards, and adaptation measures, such as energy-efficient lighting and improved working conditions, could mitigate these risks.

How much will climate change cost fashion?