Climate change and soaring temperatures in Southeast Asia are getting attention in the fashion industry for two reasons—one, they’re increasingly hurting factory workers, two, they’re increasingly hurting fashion’s bottom line. Whether empathy or finances are the driving force, at least the industry is taking note.
In Risk is the New ROI: Pricing Climate Inaction in Fashion, moderator Chana Rosenthal, founder of reDesign Consulting, chatted with Sarah Krasley, founder of industrial education platform Shimmy and visiting fellow at Cornell ILR’s Global Labor Institute, and Chisara Ehiemere, Return on Sustainability Investment (ROSI™) Lead at NYU Stern Center for Sustainable Business, about what companies are—and aren’t—doing to address rising temperatures and other sustainability issues.
The discussion challenged brands to rethink sustainability not as a cost center, but as a business imperative. Rather than just focusing on the investment itself, panelists emphasized the growing financial consequences of doing nothing—from supply chain disruptions and rising energy costs to worker illnesses and absences.
Drawing on Cornell’s latest research into heat adaptation in Southeast Asian factories, Krasley highlighted the steps factories can take to address rising temperatures.
She found that factories that made the investment in cooling solutions are reaping the rewards, yet many suppliers still lack basic thermometers that would allow them to gauge the problem. “At a very table stakes level, brands should start there,” said Krasley, noting that even a supervisor’s paper log with temperature readings taken a few times a day is a great place to start.
And while air conditioning might only exist in managers’ offices or near automation to keep machinery cool, there are other steps to take. Solar panels erected to save on electricity, for example, aid in cooling as they help divert hot sun from factory roofs.
The Cost of Inaction
Rosenthal said we can already see the negative impacts reported in Apparel Impact Institute research that projects a 34% profit hit by 2030, putting up to 70% of sector value at risk by 2040.
“We know that this is true when we have wars going on that are shifting and changing the cost of energy. So it’s happening. We’re seeing it right now show up in different stages, such as supply chain disruption, workforce instability. So it’s already begun,” she said.
Ehiemere explained how NYU’s ROSI™ methodology helps companies translate climate risk into financial language that speaks to leadership. ROSI tracks how sustainability practices impact nine operational and strategic drivers: operational efficiency, risk management, employee relations and talent management, sales and marketing, supplier relations, innovations, media coverage and stakeholder engagement, and what the “avoided costs” are.
“Accountants hate avoided costs, but from a managerial decision-making perspective, avoided costs are extremely important,” she said. This is particularly important for long-term investments that prepare companies for changing regulations, climate impacts and operational risks, all which have a level of uncertainty.
The business case helps bring the conversation out of the ESG silo to cross-functional teams where the benefit is evident to the entire organization.
Sustainability teams may be responsible for monitoring emerging climate impacts, such as changing weather patterns or factories experiencing increased heat, and recommending ways to respond. However, decisions about funding and approving these projects often sit with finance or other parts of the organization.
“Without the tools, data, or communication strategies to demonstrate the business case, sustainability teams can struggle to get climate-related projects approved and implemented, even when the risks are becoming increasingly clear,” she said.
There’s no one-size-fits-all solution, either. Adaptation strategies and interventions—from building retrofits and solar installations to operational scheduling and worker-centered approaches—depend on understanding each factory’s unique circumstances and forging stronger partnerships between brands and suppliers.
It pays to remember that climate resilience is ultimately about people.
Krasley urged the industry to prioritize workers, stating, “The very best thing that we can all do to help this industry adapt well to climate is to pay workers a living wage,” warning that extreme heat is already taking a severe toll on garment workers’ health and livelihoods.
Ehiemere echoed the urgency, encouraging attendees to “ask the tough questions and prepare for the realities that are more with us now than ever before.”
