Much has been documented about fashion production and its carbon footprint. And sustainability in footwear production has its own set of risks and challenges. Climate change is also adding another layer of complexity into the conversation.
As senior vice president, head of model development and analytics at U.K.-based Risilience, economist and ESG & net-zero strategist Scott Kelly leads the strategic development of advance climate risk models to provide analytics to help global corporations plan ahead.
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Here, Kelly discusses the climate risks impacting the footwear sector, as well as upcoming regulatory requirements impacting shoe production.
How are climate risks impacting the footwear sector?
“The footwear industry sits at the sharp end of multiple converging climate risks. It is exposed not only to physical threats — such as heatwaves, floods, and supply chain disruption — but also to rising transition pressures, from regulation and investor scrutiny to litigation risk and shifting consumer sentiment. Few other sectors encapsulate the full spectrum of climate vulnerability quite so completely.”
Based on Risilience’s data points, what are some of the growing risks for the footwear sector?
“While much of the public conversation on climate risk has focused on energy, agriculture, and infrastructure, analysis by Risilience shows that footwear deserves equal attention. The sector is uniquely exposed to both climate and nature-related risks, touching every stage of the value chain from the sourcing of raw materials, like rubber and leather, to energy-intensive manufacturing and to the global logistics networks that move products to market. In footwear, these risks are not abstract. They are operational, financial, and reputational, and they are accelerating.”
How does the footwear sector compare with other fashion categories?
“Unlike other segments of fashion, footwear is materially and geographically complex. A single pair of shoes can contain dozens of components, assembled from globally fragmented supply chains and reliant on raw materials that are acutely exposed to climate volatility. Cotton, rubber, and leather, the mainstays of footwear production, are all sourced from regions facing mounting environmental stress.
In 2022, catastrophic flooding in Pakistan wiped out 40 per cent of the country’s annual cotton harvest. Droughts, increasingly prolonged and severe, have diminished cattle herds in parts of the Americas and Africa, constraining leather supply. Meanwhile, natural rubber — predominantly tapped in Southeast Asia — has shown growing sensitivity to extreme climate swings. A succession of heatwaves, drought, and heavy monsoon flooding in 2024 reduced Thailand’s rubber output by as much as 15 per cent, sending global prices to a 13-year high. In short, the climate signal is no longer subtle, it is embedded in material costs, supply delays, and financial volatility.”
What adverse climate events should the industry be prepped for?
“Roughly 80 per cent of the world’s footwear is produced in Asia. A significant share is concentrated in Southeast Asia, a region widely recognized as a climate risk hotspot. Many manufacturing centers are located in low-lying, flood-prone areas. In cities like Ho Chi Minh City, Dhaka, Jakarta, and Phnom Penh, factories often sit just meters above sea level. Under even moderate climate scenarios, these regions are projected to experience annual flooding by as soon as 2030.
The implications for production are immediate and material. Floods can halt operations, damage inventory, and sever transport links, driving up costs and delaying deliveries.”
Is flooding the main risk?
“Heat stress presents another threat. Rising temperatures and more frequent heatwaves can compromise worker safety, reduce productivity, and strain energy systems, leading to outages that directly affect output and profitability.
At the same time, companies reliant on climate-sensitive raw materials face increasing volatility. As temperatures rise and extreme weather intensifies, the cost and continuity of supply — whether for leather, rubber, or cotton — are becoming harder to predict and harder to control. These are not distant risks. In fact, they are unfolding now, reshaping operating conditions and redefining exposure across the footwear value chain.”
What about regulatory changes? How are they reshaping the footwear sector?
“Transition risks are gathering pace, driven by a wave of regulation, litigation, and shifting expectations across global markets. As jurisdictions move to legislate for transparency, brands will be required to disclose far more about their products, their emissions, and their plans to mitigate impact. The result is a tightening compliance landscape that few in the industry are fully prepared for.
Footwear is a materially-intensive product. A single pair of athletic shoes can carry a carbon footprint ranging from 7 to 30 kilograms of CO2 equivalent, depending on its materials and design. [Editor’s Note: Greenhouse gas emissions are measured in kilograms of carbon-dioxide equivalents.]
In contrast, a cotton T- shirt typically emits just 2 to 5 kilograms. The majority of a shoe’s emissions are generated during manufacturing, largely due to energy-intensive processes like molding, gluing, and foaming that are often powered by fossil fuels. This creates a clear decarbonization opportunity through renewable energy adoption. But lifecycle emissions don’t end at the factory gate. Leather and rubber introduce additional risks. High methane emissions, land- use change, and biodiversity impacts are rarely accounted for in traditional reporting.”
What’s ahead on the regulatory horizon?
“At the other end of the product lifecycle lies a mounting waste challenge. Billions of shoes are discarded each year, and the vast majority end up in landfill or incinerators. Most are near-impossible to recycle. Composite materials, adhesives, and foams make disassembly costly and inefficient. Designed for performance and price, not recovery, the modern shoe resists circularity by design. The European Union’s target to reduce landfilling of municipal waste to below 10 per cent by 2035 makes this business-as-usual model increasingly untenable.
To accelerate transparency and accountability, the EU is rolling out the Digital Product Passport (DPP), a regulatory mechanism embedded within the Ecodesign for Sustainable Products Regulation (ESPR). Footwear and textiles are priority sectors. By 2027, each product sold in the EU is expected to carry a digitally linked record disclosing its carbon footprint, material composition, recyclability, and durability. The DPP is not merely a sustainability tool, it is a compliance instrument. While the DPP itself is governed under ESPR, marketing claims based on its contents will fall within the scope of the Omnibus Directive, meaning any discrepancy between product performance and promotional language could trigger legal action. For brands, this represents a convergence of risk, reputation, and regulation — and an end to unsubstantiated green claims.
Another regulatory frontier is the Carbon Border Adjustment Mechanism (CBAM). While it currently targets energy-intensive sectors, CBAM is designed for expansion. Footwear brands with manufacturing footprints in coal-reliant countries, such as Vietnam, China, or Indonesia, may soon find their products facing carbon tariffs at the EU border, with cost implications and investor scrutiny to match.”
Can you talk about the call for transparency, and its impact in footwear production?
“Consumer trends are compounding these risks. Surveys show that younger buyers, particularly Gen Z, consistently prioritize sustainability in their purchasing decisions, and they increasingly reject vague or unverifiable eco-labels. Legal pressure is growing in parallel. Several brands have already faced litigation over the accuracy of carbon footprint claims and environmental marketing. In this new environment, greenwashing is no longer a reputational inconvenience — it’s a legal liability.
In this context, defensible data, third-party verification, and credible emissions strategies are not optional extras. They are the new baseline for doing business in a world where climate transparency is rapidly becoming enforceable. Footwear brands that fail to internalize this shift, risk falling behind, legally, commercially, and ethically.”
So what should footwear brands do?
“The footwear industry is no longer insulated from the realities of climate risk; it is exposed on all fronts. Physical disruptions are colliding with a rapidly evolving regulatory landscape, where transparency, traceability, and emissions accountability are becoming non-negotiable. As floods, heatwaves, and raw-material volatility reshape supply chains, new rules around product data, circularity, and carbon disclosure are redefining what it means to stay competitive. This convergence of risk is not just a compliance issue, it’s a strategic reckoning.
“The brands that act decisively now, embedding climate resilience into their design, sourcing, and governance, won’t just mitigate risk — they’ll define the next era of footwear leadership.”