The impact of climate change on retail & supply chains: what actions we must take?

Jan 29, 2025

3

min reading

Nature isn't playing games anymore. In recent years, we've witnessed climate catastrophes becoming more frequent and increasingly destructive, impacting all sectors of society.

This year, the Los Angeles fires created a startling scenario for Americans, with houses, museums, and stores reduced to ashes. Other recent devastating wildfires include those that engulfed parts of Maui (Hawaii), fires in Greece sparked by a heatwave reaching 105.8°F (41.0°C), and Algeria's scorching temperatures of 118°F (48°C).

In 2024, floods impacted not only countries in Europe but also cities in Brazil were devastated. Floods and landslides also severely affected countries in Africa, such as those in the Democratic Republic of the Congo.

We highlight these events not to spark negativity or hopelessness, but to emphasize that our world is changing drastically. This transformation is reshaping our relationship with the environment and revealing a landscape where adaptation may be the only path forward.

The fashion industry is undeniably part of this urgent conversation—not only as one of the largest polluters contributing to climate change but also as a sector facing mounting pressure to adapt both environmentally and socially. As we know, the effects on supply chains, production sites, and raw material sources are undeniable. 

Although the recent fire at Kantamanto Market wasn't directly linked to natural disasters (like wildfires), it highlights the pressing need to address both infrastructure and socio-cultural inequalities in fashion. 

Kantamanto serves as a crucial place for extending the life of garments and mitigating textile pollution. The fire severely diminished its capacity to process materials, exposing the vulnerability of systems that sustain both livelihoods and environmental solutions.

This tragedy underscores a vital truth: the fashion industry must go beyond reducing its environmental footprint. It must also start developing resilient strategies to navigate climate-related and systemic challenges.

Adaptation is no longer optional, it is essential for the industry's survival and growth, especially for suppliers, brands and all SME’s.

But how are these extreme weather challenges affecting retail supply chains, and what can the industry do to adapt?

Let’s break it down:

How retail and supply chains are being affected

The consequences for supply chains are numerous, affecting everything from raw material sourcing to retail and sales. We are witnessing:

  • Impacts on Raw Material Availability: Damage to crops and natural fibers like cotton and wool, leading to supply shortages and cost fluctuations.

  • Production and Logistics Disruptions: Factory operations, transportation routes, and distribution networks facing severe delays.

  • Inventory Challenges: Reduced stock levels, making it harder to meet consumer demand.

  • Rising Operational Costs: Damaged infrastructure and higher insurance rates driving up expenses.

  • Consumer Demand Struggles: Bottlenecks in distribution impacting the ability to meet demand.

It's important to add that, besides the upstream effects, physical retail risks also need to be addressed, especially as governments increasingly advocate for greater transparency in physical retail spaces.

In the European Union (for 2024 financial reports) companies will be required to report climate risks, including how these risks could affect their stores. This will be part of their regular financial reports. 

Other countries, like the US, are considering similar rules, which could force brands to start paying more attention to the impact of climate change on their physical stores, not just their supply chains.

How to adapt in this scenario

As the fashion industry faces new challenges, conversations about adaptation and new, strategic and inclusive strategies need to be raised.

Here are some key areas we believe that the industry needs to focus on, especially when thinking about the well-being of supply chains and their stakeholders:

  1. Diversifying the supply chain by sourcing materials and production from multiple regions to minimize climate risks should be a priority in the fashion industry’s conversations and future decisions. This approach could help create more resilient supply chains, less vulnerable to local disasters.

  1. Uniting and streamlining the supply chain should be a key focus. Fragmented supply chains complicate the implementation of cohesive, sustainable strategies, making it harder for the industry to respond to climate risks and other challenges effectively.

  1. Making sustainable procurement practices accessible to all should be a central topic. Small and medium-sized businesses need more support and resources to adopt sustainable practices without compromising their budgets.

  1. Addressing the insurance protection gap for physical retail spaces should be a key focus. Physical stores, especially smaller ones, need to be better protected against the impacts of extreme weather events, which are becoming increasingly common.

  1. Exploring decentralized distribution models should be a topic for deeper exploration. Decentralizing logistics networks could help mitigate the impact of localized climate events and ensure more reliable product delivery.

  1. Leveraging digital solutions and technology, such as Digital Product Passports (DPPs), should be integrated into industry strategies. Digital tools could enhance transparency, improve decision-making, and help brands better navigate climate-related risks.

These are just a few of the key focuses the industry needs to prioritize moving forward, alongside many other necessary actions to tackle the challenges of 2025 and beyond, and to navigate new scenarios.

But one key theme unites all these efforts and discussions: the need to focus on long-term solutions rather than just responding to catastrophes. The fashion industry must move beyond merely "putting out fires" — it needs to implement preventive measures before disasters strike.

With this mindset, we can build a future where sustainability is not an afterthought but a fundamental part of how every business operates.

Why technology-driven solutions are key

We’ve reached a point where it's clear: as the fashion industry continues to evolve, technology is no longer just an option, it’s a necessity. Its role in shaping the future is undeniable.

So, why not embrace technology as an ally? 

When used the right way—democratized and accessible to all—it has the potential to drive real change. This means bringing tech into textile sourcing, transforming the process with platforms and tools that eliminate inefficiencies, simplify workflows, and unlock new possibilities

It’s about leveling the playing field, making sustainability and innovation accessible to everyone, and driving the kind of systemic change this industry so desperately needs.

This is what we’ve aimed at with World Collective Solutions.

We believe that technology is more than just a tool—it’s the key to creating a more connected, equitable, and sustainable industry. 

From our Global Sustainable Textile Marketplace, where brands and suppliers can access a curated selection of eco-friendly materials, to our one-on-one consultations with experts on the latest sustainability regulations, we’re driving innovation across the fashion sector.

But we don’t want to make this  about self-promotion. 

The final message we want to bring here is simple, yet urgent: if the fashion industry clings to outdated practices, we’re not just missing out on progress, we’re actively holding back our ability to meet climate goals.

The future of a more sustainable and adaptable textile sourcing is here, and it’s powered by technology.

If you want to learn more about the much needed transformation of B2B fashion, continue reading here. 

Our mission is to bring digital transformation to the fashion industry, making sustainability more innovative and practical.

All rights reserved © World Collective

Made by

Our mission is to bring digital transformation to the fashion industry, making sustainability more innovative and practical.

All rights reserved © World Collective

Made by

Our mission is to bring digital transformation to the fashion industry, making sustainability more innovative and practical.

All rights reserved © World Collective

Made by