Just Transition: Why It Matters for Apparel and How to Get Started

By Jesse Nishinaga

In recent years, Article One has seen growing client interest in just transition, particularly among apparel brands. This is not surprising. As companies move from setting climate and sustainability commitments to implementation, they are encountering a practical question: how can they decarbonize, build resilience, and shift to more sustainable business models without creating unintended risks for workers, suppliers, and communities?

Several external developments are driving this interest. Standards and regulations, including the EU Corporate Sustainability Due Diligence Directive (CSDDD), are increasingly pushing companies to connect climate action, human rights due diligence, and stakeholder engagement. Benchmarks and rating organizations, such as the World Benchmarking Alliance, are also raising expectations and turning just transition into a reputational issue.

There is also the growing cost of inaction. Climate risk is no longer a distant concern; it is a business continuity issue. Extreme heat and flooding already threaten workers and communities in major garment production hubs, including Bangladesh, Cambodia, Pakistan, and Vietnam, which together account for approximately 18 percent of global apparel exports. According to Cornell University research, these four countries alone could face billions of dollars in lost export earnings and nearly one million fewer jobs without adequate adaptation measures.

These risks extend beyond supply chains. Extreme and volatile weather can also affect downstream activities such as retail, warehousing, and distribution, creating worker safety risks, disrupting operations, and affecting sales.

At the same time, transition activities designed to reduce the industry’s climate footprint can create adverse human rights impacts if they are not managed responsibly. Capital-intensive decarbonization measures can be costly—in some cases running into the millions of dollars, based on anecdotal insights from our work with clients. If brands do not provide adequate support, these costs may increase financial pressure on suppliers and weaken attention to wages, working conditions, and job quality.

The same dynamics can arise with other sustainability initiatives, from water stewardship to chemical management. These initiatives are critical, but they can also increase costs for some facilities through more expensive sustainable inputs, higher testing and wastewater-treatment expenses, and the need for new skills and training to meet industry standards. Some facilities may feel pressure to comply quickly, absorb rising costs, and increase productivity demands on their workers.

The good news is that the transition will create new industries, jobs, and important opportunities for workers in areas such as textile-to-textile recycling and downcycling. At the same time, workers and communities tied to more resource-intensive and linear production models could face job loss, reduced income, or economic dislocation.

Just Transition: A Practical Tool for Due Diligence

Just transition is becoming a bridge between climate and sustainability implementation and human rights due diligence (HRDD). As companies operationalize their sustainability strategies, net-zero plans, and circularity programs, they need a credible way to understand who may be affected, who may benefit, how decisions are made, and how social and business risks are managed.

For apparel brands, just transition can help make climate and sustainability action more actionable, credible, and resilient. It can also reduce supply chain disruption and prevent the cost of transition from being shifted onto suppliers and workers. In short, just transition can help brands improve regulatory readiness, strengthen stakeholder trust, and identify risks before they become business problems.

Ready to get started on just transition? Here are three practical steps for companies.

1. Define the commitment and operating principles

Brands should first clarify what just transition means for their business and value chain. This does not need to be overly complex. A strong starting commitment can state that the company will pursue decarbonization, circularity, and climate resilience in ways that respect human rights, protect decent work, support worker voice, and avoid shifting costs onto vulnerable workers, suppliers, and communities.

Recent benchmarking by Article One found that some leading companies have made general just transition commitments, but far fewer have published principles that explain how those commitments will be operationalized across the value chain.

2. Map where climate and sustainability action may affect people

Brands should then identify the sustainability initiatives most likely to affect workers and communities. For apparel companies, this may include supplier renewable energy and energy-efficiency investments, coal boiler phase-outs, preferred materials, circularity initiatives, logistics shifts, heat exposure in manufacturing, retail, and distribution, and waste or end-of-life programs.

Our recent work has shown that transition activities can create positive environmental and human health impacts, but they can also create unintended risks for workers and communities if they are not implemented responsibly. Using a justtransition lens can help surface these unintended risks.

3. Engage workers, suppliers, and other stakeholders—and build findings into transition plans

Just transition should not be a desk exercise. Brands should engage the people most likely to be affected, including garment workers, supplier management, worker representatives, informal and recycling workers, raw material producers, and communities near high-impact sites. A credible just transition approach should be grounded in meaningful stakeholder engagement and social dialogue. It should also lead to integrated, time-bound action plans, as well as industry collaboration and advocacy where individual company action is not enough.

Ultimately, just transition is not a separate agenda from climate action. It is what makes climate action durable, credible, and fair. For apparel brands, the question is no longer whether the industry will transition, but whether that transition will be planned in a way that protects the people and communities most affected by it.

Join Article One’s Just Transition Co-Lab

We believe there is a market need for more opportunities to collaborate. With this in mind, Article One is launching the Just Transition Collaborative (“Co-Lab”) to provide apparel brands with a trusted, pre-competitive, and action-oriented learning space for apparel brands and retailers seeking to advance just transition principles in their climate, sustainability, and human rights strategies. The Co-Lab will meet four times per year, virtually, and will provide a confidential forum for companies to gain insights and tools, share knowledge, compare emerging practices, engage with expert perspectives, and identify potential opportunities for collective action.

To learn more about the Co-Lab or if you have general questions about Article One’s work on just transition, please reach out to us at hello@articleoneadvisors.com.