Apparel industry emissions jumped 7.5 percent in 2023, the first increase since we began tracking in 2019. That rise, revealed in the latest Apparel Impact Institute (Aii) report, brings the sector’s total footprint to 944 million metric tons of CO₂e—nearly 2 percent of all global emissions—and further derails the industry from its 2030 climate goals.
The emissions surge comes at a time when climate-driven disruption is already reshaping the apparel supply chain. Rising heat, drought, and flooding are hammering key production hubs. Manufacturing regions in Asia—accounting for more than 70 percent of exports—now stand to lose more than $65 billion in export revenues by 2030 in the face of climate change. Operating profits are projected to decline by 5 percent or more due to escalating climate shocks, per World Trade Scanner. This threatens supply chain stability and livelihoods. It is no longer a hypothetical: the business case for change is here.
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As worsening climate impacts threaten operating conditions, the industry’s emissions continue to rise, moving us further from 2030 goals. While there is meaningful progress by both brands and suppliers, isolated improvements are not enough to combat the broader industry’s footprint. We need to work across the system to drive measurable, shared outcomes.
The industry currently lacks the structure to distribute the cost and accountability of decarbonization in ways that support decisive, coordinated action. The vast majority of the fashion industry’s emissions lie in Scope 3, meaning that much of the decarbonization work must happen at the supplier level. If we don’t start sharing responsibility across the value chain, we’ll keep reinforcing the very systems that are slowing progress.
The industry has historically treated this as solely a supplier responsibility, siloing the burden of financing, operationalizing, and measurement. Despite ramping up production and relying on these upgrades to meet their climate goals, many brands do not offer long-term contracts or financial support —leaving suppliers to shoulder the cost of retrofits, clean energy, and low-impact materials. These are significant upgrades with high upfront costs, and many suppliers face barriers in acquiring the capital necessary. The financial risk trickles downstream while the climate benefits flow upstream.
Business as usual strategies that prioritize speed and cost over climate responsibility remain far too common. This inaction places a greater burden on the rest of the industry, drowning out the meaningful work some leaders are doing.
The way forward starts with rebalancing how risk is distributed through every part of the value chain. It requires the entire ecosystem — brands, retailers, financial institutions, and manufacturers—to move together.
For brands and retailers, progress means making financing part of the decarbonization strategy. That includes contributing capital directly, using tools like Aii’s Brand Playbook for Financing Decarbonization, or participating in collective funding mechanisms such as the Fashion Climate Fund (FCF). Some are already taking action: Bestseller and H&M Group, for example, are supporting Bangladesh’s first offshore wind project, while others are funding supplier-level upgrades through portfolio-wide investment models. Brands can also accelerate impact by sourcing from suppliers already reducing emissions and using impact data, like that found in the Climate Solutions Portfolio (CSP), to guide investments in proven decarbonization solutions.
For manufacturers, the most effective first step is adopting proven, cost-saving solutions already driving results across the sector. Aii’s Clean by Design program offers an accessible entry point, especially for small and medium manufacturers, by focusing on low-cost, high-impact upgrades that often pay for themselves quickly. The solutions exist: what we need now is clear industry demand, fair financing, and bold execution. Structured initiatives like the Manufacturing Climate Action Program and the Renewable Energy Transition Initiative help set science-aligned targets and access technical and financial support. Publicly sharing progress builds trust with brand partners and encourages the kind of transparency that strengthens the industry as a whole.
Financial institutions also have a critical role to play in bridging the industry’s financing gap. Contributing to funds like the FCF enables partners to support technical assistance, roadmapping, and deployment of proven interventions from the CSP. Beyond this, financial actors can accelerate progress by developing accessible instruments, like loan guarantees or catalytic capital, that reflect supplier realities. Directing capital towards suppliers delivering verified impact helps scale the solutions that are already working.
Meeting climate targets will require the entire industry to use every available tool: lower-impact materials, circular business models, smarter financing, and a more honest conversation about production volume. To grow a sustainable fashion industry, we need the apparel ecosystem to embrace greater collective action, mobilize joint investment, and share the risks—and rewards—of decarbonization. This is our opportunity to redesign the system for long-term resilience and shared benefit.
Lewis Perkins is the president of Apparel Impact Institute (Aii), an organization at the forefront of decarbonizing the apparel and footwear supply chain. Under his leadership, Aii has mobilized brands, manufacturers, and financiers to fund and scale high-impact environmental solutions, including the Fashion Climate Fund and the Climate Solutions Portfolio—driving real progress in key production regions like India, Bangladesh, China, and Vietnam.
With over two decades of experience in sustainability, corporate responsibility, and philanthropy, Lewis has shaped some of the most influential initiatives in the industry. Before leading Aii, he served as president of the Cradle to Cradle Products Innovation Institute, where he pioneered the Fashion Positive initiative, embedding circularity into fashion supply chains. He has also advised major organizations, from the Earthshot Prize to the World Economic Forum’s Global Future Council on Consumption.
As Chief Impact Officer of Apparel Impact Institute, Kurt Lipka manages the growth and longevity of global programs including Clean by Design—a proven platform for improving the resource efficiency of textile mills in collaboration with multinational brands. Prior to joining Aii, he spent three years at the environmental non-profit, Natural Resources Defense Council, where he focused on developing platforms and tools to measure and improve environmental performance of leading brands and retailers. Kurt also spent 10 years in retail sourcing and has served as chair and active member of several retail industry councils and steering teams. Kurt earned a BA in International Business from St. John’s University and an MBA from the University of Minnesota – Carlson School of Business.
