India, Feb. 23 -- The global fashion industry faces a serious financial risk if it fails to accelerate its response to climate change, according to a report released by Apparel Impact Institute, a nonprofit organisation.

The report, The cost of inaction, delivers a stark warning to the global fashion sector.

It estimates that by 2030, failure to act on emissions reductions could result in a 3 per cent loss in operating margins, with 34 per cent profit cuts. The outlook becomes even more severe by 2040, when projected losses could reach as high as 67 per cent.

These estimates highlight the growing financial exposure brands and manufacturers face as climate-related pressures intensify.

The analysis identifies three primary drivers behin...