In our new series, The Hidden Cost, Vogue Business breaks down everything you need to know about climate finance as it relates to fashion’s supply chains. No jargon, just insights. Read more here.
This time last year, the world was in the throes of its hottest summer on record, prompting long heatwaves and devastating wildfires. Workers in many countries struggled amid soaring temperatures. At a press conference in New York, United Nations Secretary-General António Guterres told attendees: “It’s summertime, but the living is no longer easy.”
The heat has continued this summer: back-to-back heatwaves mean wildfires are raging across Europe, record-high temperatures are being reported across Asia, North Africa and the US, and the UN reports that, around the world, death tolls are rising.
Extreme temperatures are no longer an exception, but the rule, Guterres said last year. “Earth is becoming hotter and more dangerous for everyone, everywhere. Extreme heat is increasingly tearing through economies, widening inequalities, undermining the Sustainable Development Goals and killing people. Heat is estimated to kill almost half a million people a year — that’s about 30 times more than tropical cyclones. We know what is driving it: fossil fuel-charged, human-induced climate change. And we know it’s going to get worse.”
Heat stress lays bare the tension between climate mitigation and adaptation. Workers are caught in the middle.
Cornell University’s Global Labour Institute (GLI) had already sounded the alarm about the impact of extreme heat on the global fashion industry, citing its potential to jeopardise $65 billion worth of apparel exports before 2030. For garment workers, the impact is palpable, and in a growing number of cases, the situation is impacting their health. Extreme heat is only one concern: natural fibre producers have been struggling with drought for several years now.
Guterres’s speech came with a call to action: it’s time to boost climate resilience in communities and economies alike. Vulnerable communities in the Global South — which are disproportionately affected by the climate crisis — should be first in line. But in the year since, the situation has only intensified.
Now, a group of philanthropic organisations are hoping to play their part. Launched last week, the Adaptation and Resilience (A&R) Fund will invest $50 million in locally led climate adaptation solutions that support those facing the greatest climate risks.
“The primary and most important goal is to support locally led, people-centred solutions that help communities build resilience and adapt to escalating climate impacts,” says Jessica Brown, senior director of adaptation and resilience at San Francisco-based non-profit Climate Works Foundation, who spearheaded the fund’s development. “Community engagement is built into our process from the start. Funding decisions are informed through a shared governance process that includes input from Climate Works staff, climate and development foundations, and experts based in the Global South whose work places people at the heart of climate solutions.”
The emphasis on locally led solutions taps into an emerging concept in sustainable fashion spaces: ‘just resilience’. First coined by GLI, it is an amalgamation of climate resilience and the concept of a just transition, which positions social impact as a top consideration in the move to low-carbon economies. Some experts believe just resilience to be an important turning point in how society thinks about tackling climate change.
“Historically, the philanthropy space has oriented its climate efforts towards mitigation rather than adaptation,” explains Amol Mehra, director of industry programmes at Laudes Foundation, which is also part of the A&R Fund, alongside the Howden Foundation, Quadrature Climate Foundation and The Rockefeller Foundation. “There is some logic to this: if we can decrease emissions now through mitigation, we will minimise potential adaptation and resilience needs in the future. Mitigation and adaptation are inherently linked — it’s time to address them together.”
Social justice as a guiding principle
The current momentum behind just resilience — and by extension, adaptation funding — is a long-awaited recognition of the fact that environmental and social wins are inextricably linked, says GLI executive director Jason Judd. In April, the organisation published a guidebook for investors engaging with companies on just resilience, in collaboration with asset management and advisory firm Schroders.
For fashion brands, investing in adaptation and resilience is becoming increasingly urgent, especially since so many of their supply chains are rooted in areas that are vulnerable to climate change and extreme weather, be it natural fibre sources and production facilities or physical retail. “We have heard from companies that they are already having to adjust working hours in factories or relocate them altogether due to repeat flooding, which can impact productivity, lead times and costs,” notes Katie Frame, active ownership manager at Schroders.
While there is a clear business case for addressing these climate risks and building resilience, doing so in a ‘just’ way means putting social justice principles front and centre, Frame continues. “It’s about ensuring that approaches are inclusive and do not disproportionately affect vulnerable or marginalised people, which can include workers in direct operations or the supply chain. Without considering the human and social elements, organisations risk having blind spots or inadequately building climate resilience within their value chains, which in turn can amplify financial risks related to physical climate change. We see this particularly in relation to productivity and supply chain stability,” she explains.
At a practical level, there are four levers brands need to pull to create the right conditions for just resilience, says Judd. “You have to include worker health, wages, social protections and freedom of association,” he says. “Workers need higher wages and social protections so they have money in their pockets to get ahead of the climate curve and safeguard their health, and they need freedom of association to bargain with their employers and implement solutions factory by factory.”
The “bare minimum” is for brands to recognise and actively engage with independent trade unions, adds Mehra. “It’s not just about the outcome, but the process of getting there. How are we supporting workers to be included in the process? How do we support their agency to actively shape outcomes, rather than just be beneficiaries or recipients? How can we make sure that the end result is accountable to their needs and aspirations?”
Even if brands don’t have the cash to make dedicated investments in adaptation and resilience, there are other levers to pull, says Frame. Most notably, purchasing practices. As Vogue Business reported in the 2025 sustainability leaders survey, 63 per cent of suppliers believe brand partners pressure them to make progress while squeezing their margins, undermining their ability to invest in decarbonisation and mitigation on one side, or adaptation and resilience on the other. This leaves them reliant on external funding, and curbs their input in decisions that directly affect them. Buying and sourcing teams adopting better purchasing practices would go a long way towards fixing this, notes Frame, but few brands are working in this direction.
The other catch is that brands seem to think more agile and diversified supply chains — with shorter term supplier relationships — are the answer to climate resilience, Frame continues. But this only deepens the problem. “Companies say they can easily shift supply chains, and that they are diversified enough to withstand shocks from climate change,” she says. “But we have been encouraging companies to consider the wider stress on the system if multiple sourcing locations are impacted, and many other brands also need to shift their supply chains at the same time. We encourage brands to build stronger supplier relationships, including through purchasing practices, which means having an understanding of supplier capacity and lead times, as well as ensuring prompt payment and capacity building.”
Knowing what you’re adapting to
A&R Fund partner Howden Foundation — the charitable arm of Howden Insurance — is now supporting parametric insurance, which pays out as soon as pre-agreed thresholds are met. This way, garment workers can access funds as soon as their home or factory hits a certain temperature, and farmers can receive a payout if their crop fails due to a reduction in rainfall. As well as releasing funds quickly, the aim is to give frontline communities agency over how those funds are deployed, while providing a sense of security as they navigate an increasingly uncertain world, says Howden Foundation CEO Claire Harbron.
Setting these thresholds across complex, global supply chains is a challenge in itself. Few brands have the level of supply chain transparency required to map their climate risks, and even those that do are lacking the data infrastructure to measure how those risks are progressing. To do this, brands must monitor key indicators like factory temperatures throughout the year and even multiple times per day, says Judd. “You can’t do a meaningful climate value and risk analysis unless you have data on the afternoon temperature, the air surface temperature and the relative humidity your workers are dealing with,” he says. “One auditor checking the temperature at 8am on a December day in Dhaka — arguably the coolest production hour of the year — won’t cut it.”
GLI is currently researching heat stress in Bangladesh, hoping to understand the current challenges garment workers face, and develop a temperature threshold for heat stress. They have set up sensors in different production zones across 10 factories, and 50 workers have also agreed to have sensors in their homes. These sensors are taking temperature and humidity checks every 15 seconds, allowing GLI to estimate the level of heat stress.
Measuring this in workers’ homes is critical, adds Judd, and funding should cover this, too. “A workplace might be relatively safe on the hottest days if the factory has a cooling system, but temperatures in workers’ homes can hover around 36°C overnight,” he says.
In an ideal world, brands would measure heat stress in every production zone, and would use the data to measure when heat tips into a pre-agreed threshold for further adaptation investments, he continues. But while some governments — including Vietnam and Pakistan — have already laid out these thresholds, most haven’t, and enforcement is sparse at best. In the meantime, brands could work with scientists to develop their own thresholds.
“Governments are in the process of developing these thresholds, but it’s the age-old problem of workers not being consulted,” Judd says. “We’re publishing our research in local languages, writing worker briefs and working with unions to help them develop policy positions, but there is no factory-level bargaining, let alone industry-level bargaining. The ultimate question is who is going to pay?”
Despite its best intentions, A&R Fund is only scratching the surface of what is needed to deliver just resilience at scale, says Mehra. According to the UN Environment Programme (UNEP), the global adaptation funding gap sits between $194-366 billion per year.
The fund is open to non-profits, civil society groups and other organisations working on climate adaptation, with a particular focus on those active in the Global South, and will invest in four key categories: institutional capacity strengthening, data and climate information systems, innovative financing, and field building (advancing specific areas of work). Exactly what it will fund is open for negotiation, and will be decided by local organisations on the ground in affected areas.
“We’re just at the start and we know that,” says Mehra. “The adaptation gap is tremendous. What we’re trying to do is send a message that we see the opportunity there, and catalyse broader investment from the philanthropic sector as well as the public and private sectors. Then, we can start to mobilise real money towards addressing these challenges.”
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