Fashion works on the assumption that cotton will keep growing, ports will continue functioning, employees will stay working, and consumers will keep shopping. Climate tipping points threaten many of these things.
These are the thresholds at which natural systems begin shifting from one state to another, often in ways that become self-reinforcing and difficult or even impossible to reverse, like a spilled glass of water. Scientists increasingly warn they’re a real risk, and say some tipping points are already playing out, with implications for fashion.
Ice-sheet collapse could mean the world sees long-term sea-level rise, threatening coastal regions with economic disruption. Amazon degradation would mean the rainforest becomes a drier, poorer ecosystem, which will have consequences for biodiversity, local livelihoods, and the moisture flows that support agricultural regions producing globally traded commodities including cotton. A collapse or a severe weakening of the Atlantic Meridional Overturning Circulation — which moves warm water to the North Atlantic from the tropics — could disrupt the system that keeps the UK and Europe relatively mild. Winters would become far colder and summers both warmer and drier — a combination that would make crop production far harder.
A farmer operates a cotton stripper during a cotton harvest on a farm in Oklahoma.
Photo: Getty Images
Despite the growing concern among scientists, companies across industries aren’t funneling the compound risks climate tipping points can create into their risk planning. Following a survey of global banks, the United Nations Environment Program (UNEP) last year concluded that none had fully integrated tipping points into their physical risk assessments, while only 5% were partially accounting for them.
“Tipping points haven’t really come up,” says Francois Souchet, founder of climate data consultancy Swanstant. “I don’t know whether people haven’t realized it, or because they are still hoping for the best and the questions raised by tipping points are much harder.”
Pressure may be mounting for that to change. Earlier this month, JP Morgan released a report highlighting the need for businesses and investors to start factoring climate tipping points into decision-making. According to the report, tipping points have been hard to quantify because the science is still evolving, the timing and scale of impacts are uncertain, and the financial consequences may be indirect, non-linear, and outside normal pricing horizons.
Unlike the gradual warming and incremental damage assumed in many climate-risk models, tipping points raise the possibility of abrupt, cascading disruption. The consequences may not be immediately obvious, and by the time they are, the threshold may already have been crossed. Standard valuation and underwriting tools are often built around short forecast periods and historic relationships, which means they don’t capture the risks that emerge abruptly.
