A pair of reports produced by Cornell University’s Global Labor Institute (GLI) have found that climate change is set to hit both companies’ profits from exporting and workers’ rights across the clothing manufacturing supply chain.
Analysing four of the clothing manufacturing hubs – Bangladesh, Cambodia, Pakistan and Vietnam – that made up a combined 18% of global clothes exports in 2021, the reports found that global heating would diminish both exports and worker wellbeing.
While progress has been made towards including environmental standards in trade policy and agreements in recent years, currently this hasn’t yet improved workers' rights.
Trade policy and worker protections
The second report, ‘Climate Resilience and Fashion’s Costs of Adaptation’, found that while US and EU trade policy had adapted in recent years to include provisions on environmental standards, this hasn’t been combined with provisions on worker rights to ensure that employees are protected from the effects of climate change.
Taking the 2020 US, Mexico and Canada (UMSCA) trade agreement as an example, the authors note that although there’s a ‘rapid response’ mechanism designed to resolve complaints against firms exporting to the US, environmental standards are not considered in this.
It notes the EU’s landmark Carbon Border Adjustment Mechanism (CBAM) does penalise firms for importing high-emission goods, although provisions specifically addressing climate change and worker protections are absent.
While the authors observe a trend towards “clearer protections and stronger enforcement” of climate provisions for workers in supply chains, it adds that this is largely dependent on the “political leanings” of the EU and its member states.
The re-election of climate-sceptic Donald Trump in the White House, who is expected to take the US out of the Paris Agreement commitments once in office, and a greater right-leaning, deregulatory contingent in the EU parliament could throw this progress into doubt.
Failing workers
Where legislation to protect workers does exist – such as the EU’s Corporate Sustainability Due Diligence Directive – the authors found that firms are unlikely to be penalised for violating it, despite being applicable to climate change and worker conditions:
“It is unlikely that a fashion brand would face meaningful sanctions for sourcing practices and due diligence failures that expose workers to harm from unbearable heat or intense flooding.”
Speaking to Reuters, report author Jason Judd, GLI executive director said that firms need to be pressed to take the issue seriously:
“If a brand or retailer knows that temperatures in a production area are excessively high or doing damage to worker health, then they're obligated under this new set of rules to do something about it”.
Diminished exports
Considering the economic ramifications of failing to address climate change, the first report compared two scenarios: one in which climate-adaptive measures are taken, and one in which they aren’t – a “high heat stress” scenario” – over a 25-year period (2025 – 2050).
It found that ultimately export earnings would be “significantly lower” under the high heat stress scenario.
Although a growth in exports was projected across all four countries under both instances, the combined export earnings under the high heat stress scenario were found to be 21.9% (US$65.6bn) lower by 2030, and 68.7% (US$1,424bn) lower by 2050.
Job losses
In light of the “enormous secondary income and jobs effects that follow from export-driven growth”, the report authors also analysed the effects of not addressing climate change on employment levels in the garment industry.
It found lower export-driven growth would have a negative impact on jobs’ growth, hitting fastest-growing Vietnam the hardest, with 7.4% less jobs projected by 2030 and 42.2% by 2025.
Green investment
Analysing the impact of investment in ‘green factories’ in Bangladesh, which would have cooling design elements and LED lighting, the report forecasts that although green adaptations would “claw back” some of the lost export revenue and jobs, it wouldn’t full recoup those losses fully.
Ultimately it found that, for countries planning to continue in clothing production, under all projections they would experience “lower economic growth and lower government revenue from exports, industry earnings and wages”.
Emissions driver
While the report notes that clothing companies have taken steps to reduce emissions and water usage, it adds that many mitigation attempts “fail to reconcile the challenges associated with relentless increases in overconsumption, but they ignore the imperative associated with climate adaptation”.
Currently clothing production contributes to between 5 and 10% of global carbon emissions worldwide, with oil-based synthetic materials accounting for 60% of all clothing produced.
