Hello, and a happy Friday ahead of the holidays!
This is Shayeza Walid, The Business of Fashion’s sustainability reporter, bringing you the final edition of “The Frayed Edge” for 2025 — and what a year it has been for fashion’s climate efforts.
While we’ll be revisiting some of the most important sustainability stories of the year in the weeks ahead, this edition focuses on the developments worth carrying into 2026. As the industry continues to roll out solutions aimed at cutting emissions, reducing waste and improving labour standards, climate risks like flooding and extreme heat are accelerating and catching up, and often faster than the responses designed to address them.
In short: The gap between fashion’s climate ambition and exposure is widening, and the consequences are already playing out across supply chains. So let’s get to it.
In this edition:
- Extreme heat has emerged as one of fashion’s most urgent climate risks, crippling garment workers‘ health and productivity, especially in South Asia, according to watchdog Climate Rights International.
- How a new textile-to-textile recycling cluster in India signals a shift away from fragmented pilots towards collaboration that could finally scale.
- Issues to keep in mind for 2026 as climate impacts intensify across fashion’s sourcing regions, and why recent regulatory backtracks risk leaving supply chains more exposed.
It’s Getting Hot
Over the years, the concern over extreme heat’s impact on fashion has risen exponentially. And in the last two years, as the world reached record temperatures, it became clear that heat is no longer a future climate risk — but already reshaping life on factory floors.
Reporting this year from Bangladesh and Pakistan, two of the industry’s key sourcing countries, found garment and textile workers routinely experienced dehydration, dizziness, nausea, blurred vision and fainting spells as temperatures inside factories climbed beyond safe limits.
Yet despite evidence of workers suffering from heat exhaustion, the industry has struggled to translate climate commitments into real protections on the ground. As two investigations by watchdog and advocacy organisation CRI revealed, poor ventilation, heat-trapping machinery and rigid production targets have turned extreme heat into a serious workplace hazard across facilities supplying major global brands, including H&M, Gap and Inditex, which lack adequate heat protection protocols for workers, even as conditions deteriorate.
Workers told researchers that slowing down, taking breaks or even drinking water can result in scolding, lost wages or retaliation — turning heat stress into a labour rights issue as much as an environmental one.
“It’s not just that it’s really hot,” said Cara Schulte, the lead researcher on CRI’s heat-stress investigations. “The rules in the factory stop people from staying hydrated, slowing down, resting or adjusting their working hours. Something as simple as letting workers take breaks to drink water could make a huge difference.”
That gap has persisted even as heat stress has become a more discussed global issue in line with climate adaptation, as seen at this year’s global UN climate summit.
A Valuable Win
While risks from heat heighten, CRI’s reports have led to some important progress.
In early December, the International Accord for Health and Safety in the Textile and Garment Industry, established after the Rana Plaza tragedy, agreed to develop heat stress as a protocol for the first time since 2014, to strengthen enforceable protections for millions of workers under its mandate, a rare example of climate adaptation being embedded into the legally binding worker safety framework which has 282 global brands and suppliers as signatories.
Nonetheless, on the ground, conditions remain stark. Research shows that in many major garment hubs, excessive heat isn’t just uncomfortable — it reduces productivity and increases health risks, with workers often forced to choose between speed and safety under piece-rate pay systems.
Meanwhile, as advocacy organisation Fashion Revolution reported this year, most brands still do not disclose factory heat and humidity data, and few publicly include heat mitigation in their climate strategies.
In this vein, while brands’ climate strategies have largely centred on emissions reductions, adaptation has lagged behind. CRI documented more than 150 heat-related complaints filed by workers through the International Accord’s reporting mechanism, highlighting both the severity of conditions and the risks workers take to speak up.
But whether brands translate that commitment into meaningful protections on factory floors will remain to be seen.
To read more about how extreme heat is affecting garment workers on factory floors, read our full story on it here.
Recyclers, Unite
For all the talk of circularity, textile-to-textile recycling has struggled to scale — not because the technology doesn’t exist, but because the ecosystem around it is deeply fragmented. Recyclers, aggregators, manufacturers and brands have largely worked in siloes, limiting volumes, investment and demand certainty.
A new initiative in India aims to tackle that coordination problem head-on.
This week, the Re-START Alliance, a collaborative recycling initiative convened by industry climate organisation Laudes Foundation with partners like CanopyStyle and Fashion for Good, launched Cluster Collective — its first flagship project, with an initial fund of €13 million ($15.3 million) to help scale textile-to-textile recycling through a cluster-based model.
The four-year programme will roll out first in the Ludhiana and Indore textile hubs and is being led and implemented by the Sustainable Trade Initiative (IDH), a global organisation that works with governments, brands and suppliers to make international value chains more sustainable and inclusive.
Why This Matters
Rather than backing isolated pilots, Cluster Collective is designed to build shared infrastructure for waste collection, sorting and advanced recycling, while formalising labour, integrating traceability technologies and strengthening local entrepreneurial ecosystems. A blended-finance technical assistance fund, managed by Navaka Social Business Fund, will deploy grants, concessional loans and patient capital to support that build-out.
“Cluster approaches aren’t new,” said Jagjeet Singh Kandal, country director at IDH. “But the challenge has been that they’ve operated in a fragmented ecosystem. … But our new programme aims to bring everything together in a coordinated and structured manner, resulting in savings and efficiencies — and, critically, bridging infrastructure, technical and financial gaps to accelerate scale.”
The implementation of this programme could not be more timely.
India generates a significant amount of textile waste annually, and demand for compliant recycled fibres is expected to rise as extended producer responsibility rules and circularity requirements take hold in key export markets, particularly in Europe.
Moreover, the most recent industry data underscores why scale and structure are critical.
Textile Exchange’s 2025 Materials Matters report estimates that just 1 percent of the global fibre market currently comes from pre- and post-consumer recycled textiles, despite significant untapped potential for post-consumer waste to be used as feedstock, and combat the industry’s rising polyester production. And without coordinated systems on the ground, closing that gap becomes all the more difficult. This is considering labour conditions across the informal waste sector remain a critical challenge, with millions of waste workers operating without job security or protections.
As such, without coordinated systems on the ground, suppliers risk being locked out of that demand.
Given this, the outcome of Re-START’s goal of bringing one million tonnes of recycled fibres back into supply chains by 2030 through Cluster Collective will be a crucial demonstration of what might be possible.
But whether it can deliver where smaller initiatives have stalled will depend not just on coordination, but on whether brands are willing to commit long-term demand alongside capital.
Looking Ahead: Fashion’s Rising Risks
As 2025 draws to a close, climate impacts in major apparel sourcing regions are shifting from episodic disruptions to structural vulnerabilities — and 2026 may test supply chains harder still.
Across Southeast Asia this year, record monsoon rains and successive storm systems caused widespread flooding in Vietnam, Indonesia, Sri Lanka and Malaysia, slowing manufacturing output and inflicting billions in economic losses.
In Vietnam alone, flooding linked to tropical cyclones and heavy rain in 2025 damaged infrastructure, inundated industrial zones and disrupted transport links, illustrating how extreme precipitation events can ripple through production networks.
Vietnam’s apparel and footwear sector plays an increasingly central role in global supply chains, especially for manufacturers like Nike, buoyed by trade agreements and foreign investment.
But its geographic reality, coastal cities and delta plains that are sinking as sea levels rise, make it especially exposed to future flood risk. Industry researchers have flagged that flooding and heat could, together, significantly dent export earnings and labour productivity in hubs like Vietnam by 2030.
If we get into the nitty gritty of it all, climate volatility is especially likely to intensify in 2026 as La Niña conditions return, a weather pattern linked to heavier rainfall, flooding and more disruptive storm activity across parts of Asia.
In recent La Niña years, extreme weather has driven hundreds of billions of dollars in global losses, with Southeast Asia repeatedly among the hardest-hit regions.
But what makes this exposure most concerning is the policy backdrop this past year has set. As global warming amplifies, recent dilution of EU sustainability rules risks weakening incentives for brands to invest in climate adaptation across their supply chains.
Requirements designed to improve traceability, environmental due diligence and risk mitigation have been softened just as physical climate risks are becoming more severe and predictable. And for sourcing hubs like Vietnam, Bangladesh, Indonesia and other parts of Asia, the combination of intensifying floods, extreme heat and weaker regulatory pressure raises the likelihood that climate costs will continue to be absorbed by suppliers and workers, rather than addressed through long-term resilience planning.
In this landscape for 2026, rather than signal complacency, brands and policymakers need to reckon not just with emissions targets, but with tangible climate exposures that can easily upend production, and more importantly, the lives and livelihoods of the people behind our globally intertwined industry.
What Else You Need to Know
A Nail in EU’s Eased Reporting Regulations: The European Union reached a deal to slash ESG requirements, as the bloc faces intensifying pressure from the US to rein in such rules amid ever-present trade tensions. [The Business of Fashion]
More Levies on Shein: EU Ministers agreed last month to abolish a rule that let goods under €150 enter the bloc without customs duties. [The Business of Fashion]
Sabotage Stalls Chinese Crime Gang Trial: A landmark trial in Italy against Chinese crime gangs allegedly controlling Europe’s fashion logistics is floundering due to mishaps and suspected sabotage. [The Business of Fashion]
Supply Chain Disruption from Floods Is Coming: Deadly flooding in Asia and early snowstorms across the US are signalling the return of a weather-roiling La Niña, a cooling of Pacific waters that can disrupt economies and trigger disasters worldwide, especially in Global South countries like Vietnam, where a majority of fashion’s supply chain lies. [Bloomberg]
