CFO Slice

Fashion brands risk losing up to 34% of profits by 2030 if chief financial officers fail to invest in supply chain decarbonization, according to a new report by the Apparel Impact Institute (Aii), produced with Accenture. The report, The Cost of Inaction, projects that rising carbon prices, energy costs and raw material volatility could significantly increase production expenses. Carbon pricing alone could push cost of goods sold up 13%, with carbon prices forecast to rise from an average of $10 per ton today to $350 by 2040. In high-risk scenarios, profit losses could reach 67%. Aii, which is seeking $250m to unlock $2bn in climate finance for supply chain decarbonization, has so far raised $100m. The report targets CFOs directly, arguing that climate investment is no longer a corporate social responsibility issue but a material financial risk. While most brands have been slow to fund emissions reductions for suppliers, companies such as H&M Group and German brand Armedangels say they are embedding climate mitigation into their financial strategies to protect long-term margins and secure competitive advantage. The report concludes that failure to act on climate risks could erode profitability across the industry, turning sustainability from a moral argument into a pressing financial imperative.