LONDON: Extreme heat and flooding could erase $65 billion in apparel export earnings from four Asian countries by 2030, as workers struggle under high temperatures and factories close, research from Schroders and Cornell University showed on Wednesday.
The study also mapped out the supply chains of six unidentified global apparel brands operating in the four countries studied – Bangladesh, Cambodia, Pakistan and Vietnam – and found all six would be hit materially. For one sample brand that could amount to 5 percent of annual group operating profits.
The findings should act as a wake-up call to both an apparel industry facing significant financial costs, and to investors confronted with sparse information on companies’ exposures, the report’s authors told Reuters.
“Among the suppliers and the buyers we talked to, not one had their eye on these two issues (heat and flooding),” said Jason Judd, executive director of Cornell Global Labor Institute.
“The climate response by the industry is all about mitigation, about emissions and recycling, and little or nothing with respect to flooding and heat,” Judd said.
Understanding climate-related physical risks to companies in a warming world is critical, but the process is in its infancy with few businesses disclosing enough information and few investors undertaking proper assessments.
“There is so little data on this ... There are some brands not disclosing the factory locations of their suppliers,” said Angus Bauer, Schroders’ head of sustainable investment research.
Bauer said Schroders, which manages more than 700 billion pounds ($874 billion) in assets, would increase engagement with companies over their disclosures and he called on firms to work with suppliers and policymakers to build adaptation strategies that consider the impact on workers.
Using projections, the researchers analyzed future heat and flooding levels to estimate what would happen under a “climate adaptive” scenario and a “high heat and flooding” scenario.
Under the second, workers would suffer more “heat stress,” with worker output declining as the wet-bulb globe temperature, which measures heat and humidity, rises.
Flooding will also force factories to close in the four countries, which account for 18 percent of global apparel exports and employ 10.6 million workers in apparel and footwear factories.
The overall fall in productivity would lead to a $65 billion shortfall in projected earnings between 2025 and 2030 – equivalent to a 22 percent decline – and 950,000 fewer jobs being created, the study found.
By 2050, lost export earnings would reach 68.6 percent and there would be 8.64 million fewer jobs.
Asia apparel hubs, including Pakistan, face $65 billion export hit from extreme weather
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Asia apparel hubs, including Pakistan, face $65 billion export hit from extreme weather
- Research from Schroders and Cornell University shows the apparel industry is not doing much about flooding and heat
- The study reveals the lost export earnings will reach 68.6 percent by 2050, with 8.64 million fewer jobs in the apparel sector
Pakistani, Bangladeshi officials discuss trade, investment and aviation as ties thaw
- Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war
- Ties between Pakistan, Bangladesh have warmed up since last year and both nations have resumed sea trade
ISLAMABAD: Pakistan's High Commissioner to Bangladesh Imran Haider on Sunday met Chief Adviser Muhammad Yunus in Dhaka, the latter's office said on, with the two figures discussing trade, investment and aviation.
Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war, which saw the part previously referred to as East Pakistan seceding to form the independent nation of Bangladesh.
Ties between Pakistan and Bangladesh have warmed up since former prime minister Sheikh Hasina’s ouster as a result of a student-led uprising in August 2024. Relations remain frosty between Dhaka and New Delhi over India’s decision to grant asylum to Hasina.
Pakistan has attempted to forge closer ties with Bangladesh in recent months and both South Asian nations last year began sea trade, followed by efforts to expand government-to-government commerce.
"During the meeting, both sides discussed ways to expand cooperation in trade, investment, and aviation as well as scaling up cultural, educational and medical exchanges to further strengthen bilateral relations between the two South Asian nations," Yunus's office said in a statement on X.
In 2023-24 Pakistan exported goods worth $661 million to Bangladesh, while its imports were only $57 million, according to the Trade Development Authority of Pakistan. In Aug. this year, the Pakistani and Bangladeshi commerce ministries signed a memorandum of understanding to establish a Joint Working Group on Trade, aiming to raise their bilateral trade volume to $1 billion in the financial year that began in July.
The Pakistani high commissioner noted that bilateral trade has recorded a 20 percent growth compared to last year, with business communities from both countries actively exploring new investment opportunities, according to the statement.
He highlighted a significant increase in cultural exchanges, adding that Bangladeshi students have shown strong interest in higher education opportunities in Pakistan, particularly in medical sciences, nanotechnology, and artificial intelligence. Haider also said that Dhaka-Karachi direct flights are expected to start in January.
"Chief Adviser Professor Muhammad Yunus welcomed the growing interactions between the two countries and emphasized the importance of increased visits as well as cultural, educational and people-to-people exchanges among SAARC (South Asian Association for Regional Cooperation) member states," the statement read.
"Professor Yunus also underscored the need to further boost Bangladesh–Pakistan trade and expressed hope that during Mr. Haider’s tenure, both countries would explore new avenues for investment and joint venture businesses."
