Historically, sourcing decisions have been financially driven as brands sought the most cost-effective producers to maintain margins on apparel production. Now, reliability is the key priority. “Countries such as Indonesia and Vietnam, where tariffs have remained relatively stable since April 2025, are seen as safer sourcing options,” says Bernhard Riegler, vice president of marketing for Sappi, a leading wood pulp producer in the man-made cellulosic fiber supply chain. “Stability, more than cost, is becoming the decisive factor.”
Reigler believes the industry is only just beginning to feel the effects of 2025’s “seesaw of tariff changes”, with increasing geopolitical tensions likely to exacerbate this instability in 2026. “Markets adjust to certainty, but they struggle when ultimate landed costs change from month to month,” he says. “This uncertainty impacts the entire value chain, from retailers who are unwilling to provide early commitments for garment purchases, to garment makers, fabric producers, spinners, and fiber suppliers who are unsure what to make, when to make it, or how much seasonal stock to carry to ensure security of supply.”
Climate chaos and the decline of worker rights
The World Meteorological Organization’s State of Climate Update, published ahead of COP30, named 2025 one of the hottest years on record. Extreme weather events hit fashion’s producing regions hard, from the worst flooding in 30 years that decimated cotton crops in India and Pakistan to air pollution and extreme heat making garment factories increasingly dangerous for workers.
According to a series of reports from Climate Rights International, workers in Karachi, Pakistan and Dhaka, Bangladesh lack fundamental needs such as clean and fresh water, appropriate ventilation, and adequate breaks to withstand extreme, yet increasingly commonplace, temperatures. “Extreme heat events are putting stress on workers, which will require the factories to upgrade temperature management technologies,” says Epic Group’s Mahtani. “This pressure is expected to come from some brands as early as 2026 and continue to escalate as the planet heats up.”
While some brands are putting pressure on suppliers to implement heat-adaptation solutions, many are seeking to avoid high-risk regions. “More companies are treating climate as a sourcing and logistics risk input, not just a sustainability topic,” says Inspectorio’s Burstein. “The practical shifts we hear most often are more geographic spreading of key programs to avoid single-region weather concentration, more seasonal timing flexibility and contingency capacity, and more risk-based supplier segmentation where ‘resilient operations’ becomes part of supplier scorecards.”