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Key Takeaways

  • This year’s El Niño could cost the global economy up to $3 trillion, projected out through 2029, providing an uncomfortably near-term demonstration of both the inseparability of modern economies, and of how quickly and comprehensively climate change can hit fashion’s bottom line.
  • The fashion industry is especially vulnerable to the supply chain disruptions caused by extreme weather patterns, including disruptions in raw material production and delivery, manufacturing capacity, logistics, and consumer markets.
  • Proof continues to pile up that carbon offsetting, forest carbon capture, and other methods of blunting emissions will not work at anywhere near the scale required. This leaves fashion with an existential question: continue to over-produce and deal with cycles of environmental, humanitarian, and commercial disaster, or find a way to make sense of making less?
  • Finally, the EU has now agreed that its nations should ban the destruction of unsold textiles, also creating a new “digital product passport” that would show a product’s environmental sustainability, helping consumers make informed choices and further tightening the regulatory environment in which fashion operates.

With the cost of climate change becoming clearer, immediate action is both a moral and commercial imperative.

According to research published this week, El Niño could cost the global economy up to $3 trillion in damages through 2029 compared to a scenario without the weather pattern developing. It’s anticipated that this particularly severe El Niño will have a devastating impact on the economies of tropical countries, potentially leading to a prolonged period of economic decline that could last for up to ten years – and one that is almost certain to have profound knock-on effects on intertwined economies elsewhere.

In today’s economic reality, a crisis in one region is a crisis everywhere.

For those who have heard the name but not necessarily the details: El Niño is a climate phenomenon characterised by unusually warm ocean temperatures in the central and eastern equatorial Pacific Ocean. It occurs irregularly, usually every two to seven years (this year to take place sometime between May and July). Its effects on weather patterns worldwide are significant and regionally contrasting; in some areas potentially causing severe floods, while worsening drought in others.

While almost every industry is included in that broad prediction, the fashion industry – especially the regions where much of the world’s clothing is produced – is especially vulnerable. In terms of the supply chain, El Niño has the potential to disrupt agricultural activities for raw material production, including the cultivation of crops like cotton, silk, and wool. Logistics and transportation are also at risk for being disrupted by the severe weather conditions. With these disruptions in raw material production and delivery, the timeline and cost of sourcing materials for fashion production may increase – leading to price fluctuations in textiles and other inputs, potentially affecting production costs, retail prices, margins, and the ability for brands to hit market deadlines.

Critically, it is those working in countries where clothes are produced that will feel the effects the most: there may be reduced demand for labour, leading to temporary or permanent layoffs, or decreased wages. Workers employed in the agriculture sector, particularly those involved in cultivating fibres like cotton, may face challenges due to crop damage or decreased yields, and the severity of the weather can pose risks to workers’ safety and well-being. Here, workers may experience infrastructure damage at their place of work, power outages, or difficulties in maintaining safe working conditions.

Consumer behaviour is also at risk of changing: warmer temperatures or increased rainfall may impact the demand for certain clothing items. For instance, a prolonged period of heat might drive the demand for lightweight and breathable fabrics, while excessive rainfall could affect the sales of outdoor apparel. Beyond this, because of the economic consequences stemming from El Niño – like reduced economic growth or increased costs of living – it is likely that consumers might be forced to choose more affordable fashion options to keep up with the weather, driving more consumption from fast fashion companies. Many of whom are relying on forest carbon capture (basically relying on the planting or maintenance of trees to remove the CO2 in the atmosphere) as part of their sustainability goals, instead of substantially reducing their carbon emissions.

But there is evidence that that just isn’t going to work – and certainly not on the scale that the fashion industry needs. Basically, in the absence of significant emissions reductions, this approach has limited effectiveness in reducing the overall carbon levels in the atmosphere.

Looking forward to just this year, then (because we need look no further to see fashion weighing up the reality of climate change on its bottom line) it is as simple and as complicated as this: we need meaningful institutional change around sustainability. And time is running out: urgent action is required from humanity to swiftly restrict global warming to below 1.5 degrees Celsius to align with the objectives outlined in the Paris Agreement.

And what happens if nothing changes, if humanity continues to consume the world’s finite resources as if they were limitless? This was the question pondered by the Club of Rome (a global think tank and a non-profit organisation consisting of individuals in academia, business, science, and politics) in their famous report in 1972 titled “The Limits to Growth.” The answer: inaction in the face of climate change is not a viable strategy. “Very succinctly, we are at a now-or-never moment. What we do in the next five to 10 years will determine the welfare levels of humanity for the rest of the century,”  says Gaya Herrington, an economist specialising in statistical modelling, who reviewed and revised the Club of Rome’s analysis to determine if we have deviated from our distressing course. Their findings indicate that we have made minimal progress.

And as mentioned above, it won’t affect the world’s population equally or in proportion to who caused it in the first place. Herrington explains: “It’s not the groups that have contributed to climate change and ecosystem breakdown the most that will feel it the most. The people who are clearly causing the most carbon emissions are not necessarily living in the regions that are most affected.” Another hit at the jugular, particularly for the fashion industry, is that it needs to break free of the delusion about unlimited growth, and that advancements in technology can save the planet. The fashion industry’s model of growth and overproduction is one that is long overdue for being overhauled, and no amount of innovation (in the form of automation, robotics etc.) is going to change that.

Alongside the meaningful institutional change, from the Club of Rome’s revised research emerges a suggestion for change that is beyond environmental (namely regenerative agriculture), but that is social – an area where it is clear that the fashion industry needs to improve. By reducing inequalities between countries, and then within them too, the upshot is a cascading positive effect on the planet, leading to more sustainable resource use, social stability, and inclusive participation in environmental decision-making. And presumably a fashion with far fewer distressing effects on the planet.

Empowering Industry Direction and Reinforcing Regulatory Impact

On Monday this week, the EU agreed that its nations should ban the destruction of unsold textiles. The ban would apply immediately, meaning that companies cannot destroy unsold textile products regardless of the assessment that the EU executive carries out as part of the Ecodesign Regulation. The law also aims to create a new “digital product passport” – an extension of the same idea that is already applicable in one member state, France – that would show a product’s environmental sustainability, which would help consumers make informed choices.

This seems like a major, concrete step in the direction of a more sustainable future for the fashion industry. As above, France has also provided the first domino to fall in the form of their regulations on environmental labelling and its Climate and Resilience Law and now it appears that the rest of the EU is following. This is not altogether surprising given the importance of the subject matter, however, it is the first collective action of its kind that is sure to set other regulations in motion that will, with any luck, truly move the needle on how the fashion industry operates.

This is reassuring given the comparatively underwhelming track record of industry-governed bodies such as The Fashion Pact, which this week gained a new Co-Chair: Helena Helmersson, CEO of the H&M Group – taking the reins from its co-founder and Kering’s chairman and CEO François-Henri Pinault. The initiative was launched in 2019 during the G7 summit in Biarritz, with the objective of addressing climate change and seeking remedies to mitigate the detrimental effects caused by the fashion industry on the environment. The Fashion Pact currently has 62 members, including some of the biggest names in the fashion industry including Farfetch, Chanel, H&M Group, Intidix, Kering, Mango, Adidas, and Nike – but recently minus Selfridges, Stella McCartney, and Hermès.

Despite the power players on its roster, there seems to be an absence of verifiable information on exactly what the initiative has achieved, aside from raising awareness around fashion and biodiversity. Unfortunately, this seems to be a recurring theme in the fashion industry: splashy announcements around sustainability, undersigned by major brands, but little verifiable action. But with regulations expanding with support from highly influential groups like the EU – it could be a new era for industry direction and leadership and external regulation and enforcement to work more effectively than before.

The best from The Interline:

This week, the teams behind It’s A Working Title and Blockchain Style Lab authored a three-part series of exclusive articles for The Interline, looking back at Metaverse Fashion Week 2023 and using it as a springboard for thinking about the future of digital fashion as a whole. In the first instalment, Jessica Quillin, PhD considers why endless possibilities don’t automatically translate into great user experiences.

In the second instalment, Sasha Wallinger, charts the history of physical fashion and beauty weeks and considers why brands are continuing to invest in the idea despite low attendance figures.

And rounding out the series, Bryce Quillin, PhD concludes with his opinion on the success – or rather lack thereof – of this year’s MVFW.