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Climate Change Puts US$65 Billion in Apparel Export Earnings at Risk

Key apparel hubs are increasingly climate-vulnerable, with new research warning four countries vital for apparel production risk foregoing US$65 billion in export earnings, representing a 22% decline. Asset manager Schroders and Cornell University’s Global Labor Institute analysed the exposure of 32 apparel production hubs to climate change-related impacts, such as exposure to intense heat and flooding risk. The report calls for social protection mechanisms and climate adaptation finance to redistribute costs and risks away from apparel workers, with Schroders emphasising the importance of investors engaging with apparel companies and their stakeholders on their climate adaptation and resilience efforts and progress, and how this is incorporated into their climate transition plans. Angus Bauer, Head of Sustainable Investment Research at Schroders, said: “Apparel companies must look to partner with suppliers, and work with peers, worker organisations and policymakers to design suitable adaptation strategies that consider the impact on workers. Adaptation planning could have positive returns on investment for the industry and is a critical addition to mitigation efforts.” The four focus countries – Bangladesh, Cambodia, Pakistan and Vietnam – collectively represent 18% of global apparel exports, house 10,000 apparel and footwear factories, and employ 10.6 million workers, the report said.

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