At Taiwan’s Yee Chain factory, sustainability lead Anett Sóti is preparing for another year of environmental disruption. Her main worries include flooding in the low-lying garment production centers of Ho Chi Minh City and the Mekong Delta, as well as forest fires and erratic storms in Indonesia, which endanger the tree farms the company depends on for viscose.

“We anticipate more lost workdays as assembly workers face difficult commutes,” she explains. In Taiwan, even timely product delivery is at risk: “Recent years have shown that intense typhoons can hit the island’s northern ports hard enough to cause shipping delays.”

A similar reality is setting in across Europe, where fashion suppliers are realizing that climate breakdown is no longer a distant threat but a current crisis. Extreme heat puts garment workers in danger, floods and wildfires damage raw material supplies, and water shortages disrupt both farming and industrial operations. “Climate change is here,” states Eva von Alvensleben, executive director of The Fashion Pact. “The urgency is greater than ever.”

With climate unpredictability now a constant—compounded by global conflicts, tariff shocks, and the rollback of Western sustainability rules—many brands are recognizing they must act. A long-overdue reset of the fashion industry’s climate agenda seems to be taking shape. After years of imposing top-down targets that forced manufacturers to shoulder the cost and complexity of change, industry representatives say climate action is becoming more practical, more localized, and increasingly driven by the supply chain itself.

Can this less performative, more grounded approach help the industry catch up? And, critically, can it safeguard the people in its supply chains who are most exposed to climate change?

From Global Pledges to Local Action

The old top-down model, where brands set broad global goals and left suppliers to implement them with little say, is gradually fading. What’s changing is not just that suppliers are helping shape solutions, but that climate efforts are now more targeted and embedded within the supply chain, where the biggest impacts occur.

“The previous approach of aligning brands to dictate terms to suppliers has shifted toward a more equal partnership,” says Lewis Perkins, CEO of the Apparel Impact Institute (Aii). Aii’s focus for 2026 is on high-impact solutions in Tier 2 manufacturing, where Perkins notes that just “a few hundred suppliers” are responsible for well over half of the sector’s emissions, largely due to energy-intensive dyeing and finishing processes often powered by coal. However, each factory faces unique challenges. “There’s no one-size-fits-all solution,” Perkins explains. “It’s about meeting them where their needs are.”

The Apparel and Textile Transformation Initiative (ATTI) is advancing what project lead Olivia Windham Stewart calls “nationally grounded” action on sustainability issues, including climate change. The group, which launched chapters last year in Türkiye and Bangladesh, brings together national industry associations to identify the most pressing local priorities before designing tailored solutions that consider regional regulations, financing, and resources. For instance, Türkiye is concentrating on energy and water, while the Bangladeshi chapter, led by BGMEA and BKMEA, is defining its focus areas this year.

“Manufacturer-led, country-level transformation plans aren’t just helpful—they’re essential for turning ambition into action,” says Windham Stewart.

The Fashion Producer Collective, a manufacturer-led sustainability think tank, is zeroing in on the highly specific challenges of adaptation, according to co-creator Kim van der Weerd. For example,One company is redesigning its gutter system to handle heavier rainfall, which may mean creating a custom design and securing funding. “These are highly specific issues that vary from factory to factory,” says van der Weerd.

Efforts are also expanding to supply chains in the Global North, which have historically faced less scrutiny but still produce significant emissions. The Fashion Pact has launched the European Accelerator to tackle emissions in Italy’s supply chain—the EU’s largest manufacturing hub and a center for luxury production.

While coal use has largely declined, energy-intensive wet processing remains a major source of emissions in Italy’s mills and tanneries, says Ségolène de Donno, who leads the initiative. This year, the group plans to focus on such energy-intensive areas, along with the financial challenges faced by Italy’s many small, family-owned manufacturers. “Financing is a key barrier, so brands and their suppliers are working to understand where to find funding and how to request it,” she explains.

Just Transition: The Next Frontier of Climate Action?

Experts point to the life-and-death impacts on supply chain workers as the most pressing concern. Reports of deadly flooding and extreme heat in garment supply chains have made fashion’s human cost impossible to ignore.

Research from Cornell’s Global Labor Institute shows that the industry could lose billions in productivity by 2030 due to extreme heat and flooding in just four Asian countries—with global losses expected to be much higher. “Climate adaptation is becoming a higher priority as temperatures rise,” says Jason Judd, the institute’s executive director. “Attention to how climate change affects workers and profits has surged.”

The institute’s latest report, Cooling Before It Got Cool, also offers cautious optimism. Many effective heat-mitigation measures it examines are relatively simple and affordable, from ice machines and exhaust fans to evaporative cooling walls that draw cooler air through water-soaked pads. “The technology to cool workers isn’t complicated, and the costs are manageable in most countries,” says Judd. While some measures, like air conditioning, could increase emissions, others support climate goals. For example, one factory uses solar panels not only for energy but also to block heat from entering through the roof.

Critically, the research finds these measures work best when workers help shape them. In Cambodia, trade union leader Athit Kong says unions are collaborating with employers like Sabrina Garments to monitor temperatures and implement heat protections. As noted in the Cornell report, workers used the Telegram app to map overheated areas, such as near machinery, helping the employer target cooling efforts more effectively.

Building on this worker-led momentum, the International Accord—a binding agreement among brands, governments, and unions in Bangladesh and Pakistan—is developing a Heat Stress Protocol for covered factories. The accord already has a complaint system for reporting heat stress issues, says deputy director Véronique Camerer, but the new protocol will “address heat risk more systematically.” Further details are expected later this year.

Sharing the Cost of Climate Action—and Adaptation?

While calls for brands to pay their fair share are common, iThe call for sustainable change in fashion has often been ignored. With limited budgets for sustainability and declining consumer demand, significant funding for cleaning up the industry seems unlikely to emerge this year. However, by concentrating on the most impactful areas and combining resources, the sector is beginning to make progress.

For instance, Aii is expanding its Deployment Gap Grant program from a pilot to full implementation. This initiative unites brands to pool funds, helping suppliers cover the initial costs of decarbonization projects, such as installing solar-powered heat pumps to replace coal for thermal energy. “The idea is to use shared funding to effectively act as a rebate for suppliers,” explains Aii’s Perkins. “This way, everyone has real skin in the game.”

The Fashion Pact, a CEO-led coalition primarily of European fashion companies, is also scaling up its Future Supplier Initiative. Developed with Aii and Guidehouse, this program brings major brands together to help factories secure loans by providing capital “guarantees” that attract banks and secure better terms. After years of developing loan proposals, the project is now moving into real-world implementation with funded projects. Participants include H&M, Gap Inc., Bestseller, and Ralph Lauren, alongside 50 suppliers.

As climate action gains momentum, advocacy groups and suppliers worry that the push to decarbonize is overlooking impacts on workers. Adaptation efforts—which more directly affect workers—are being neglected, along with issues like price cuts and harmful purchasing practices that can lead to layoffs or accelerated production.

Despite rising sustainability demands, tariffs and economic uncertainty have prompted some brands to reduce prices paid to factories. Any increased costs can result in cuts to other critical areas, such as worker well-being, notes Saqib Sohail of the Microfibre Consortium, formerly with Artistic Milliners in Pakistan. “What we have seen is added pressure on the suppliers by the retailers and the sourcing teams,” he says, leading to layoffs and other reductions.

The Business and Human Rights Center (BHRC) is calling on brands to integrate worker welfare and just transition commitments into their climate plans. Following its “Missing Thread” report in June, BHRC is tracking the climate commitments of 65 major fashion companies, including Amazon, Kering, and Adidas, through follow-up surveys. They are examining whether brands support decarbonization with fair pricing, financial assistance, and backing for collective bargaining to protect workers, along with commitments addressing heat stress.

“In practice, a just transition requires aligning green requirements with fair pricing, longer-term sourcing commitments, and worker voice through freedom of association and collective bargaining,” says BHRC labor rights project manager Anithra Varia. “This ensures climate action does not lead to sped-up production, layoffs, suppressed wages, or unsafe working conditions.”

BHRC’s focus groups with garment workers and unions in Bangladesh and Cambodia found that newer, more efficient machinery can increase productivity, potentially causing layoffs and higher production targets for workers. Women are often less likely to receive training on this equipment. Workers in Bangladesh emphasized that decarbonized factories are important but should only be considered truly green when they are “also green for workers.”

This broader, human-centered approach to climate action may be the most ambitious—and urgent—challenge the industry faces this year.

Frequently Asked Questions
Of course Here is a list of FAQs about the predicted reshaping of fashion supply chains by 2026 due to climate change

Beginner Definition Questions

1 What does reshaping fashion supply chains actually mean
It means changing how clothes are designed where materials come from how they are made and how they get to stores The goal is to make the entire process shorter cleaner and less reliant on longdistance shipping

2 What is nearshoring or regional sourcing
Its the practice of brands sourcing materials and manufacturing clothes much closer to where they will be sold For example a US brand making clothes in Mexico or Central America instead of Asia

3 Why is transport such a big deal for fashions climate impact
A single garments journey can involve raw materials fabric and finished products traveling between multiple continents by ship and plane This global hopping creates massive carbon emissions before the item even hits the store

Benefit Motivation Questions

4 What are the main benefits of sourcing materials closer to market
Lower Emissions Drastically cuts carbon from shipping and air freight
Greater Agility Brands can react faster to trends and reduce overproduction
Supply Chain Resilience Less risk of massive delays from global disruptions
Supporting Local Economies Can create jobs and invest in regional manufacturing hubs

5 Is this change just about the environment or are there other reasons
While climate pressure is the main driver it also makes strong business sense Consumers are demanding sustainability and shorter supply chains mean brands can manage inventory better and avoid costly lastminute air shipping

Advanced Practical Questions

6 What are the biggest challenges for brands making this shift
Higher Upfront Costs Labor and materials in regions like North America or Europe are often more expensive than in traditional manufacturing hubs
Limited Infrastructure Regional hubs may not have the same scale specialized skills or material suppliers as established centers in Asia
Redesigning Products They may need to reformulate fabrics and designs based on whats available locally

7 Will this make my clothes more expensive
Possibly in the short term However brands may offset some costs through savings on shipping tariffs and by reducing