The Case for Climate-Responsive Worker Insurance.
Climate extremes—ranging from heat waves to torrential rains and droughts—are increasingly severe occupational hazards for workers in global garment supply chains. Among the many responses fashion brands can explore is the concept of ‘a climate-responsive worker insurance.’ While strengthening government social security schemes remains essential, a private insurance program developed by fashion brands and suppliers, with the support of grassroots worker organizations, could play a critical role in safeguarding workers and advancing a just transition.
Make no mistake: climate change is a human catastrophe showing its face now. Rising temperatures, intensified rainfall, and prolonged droughts are creating dangerous working conditions and eroding garment workers’ already meager wages, especially when extreme weather coincides with strict delivery schedules and inadequate infrastructure. Women—who make up 60% to 80% of the garment workforce, often from marginalized communities—are particularly vulnerable. These crises exacerbate threats to their health, livelihoods, and well-being, further deepening gender disparities.
In addition to its human toll, climate extremes pose serious business risks, with weather-related factory closures significantly disrupting productivity and operations. Addressing this challenge requires innovative, worker-centered solutions that combine immediate protections with long-term resilience strategies across supply chains.
Climate-Responsive Insurance for Resilience
A climate-responsive insurance program that integrates worker well-being, income security, and addresses climate-specific risks offers a promising solution. Proven systems such as India’s Employee State Insurance Scheme (ESIS) highlight the effectiveness of cost-sharing among workers, employers, and governments in providing critical safety nets. Similarly, SEWA’s pilot extreme heat wave insurance in India provides valuable insights; this parametric model compensates women workers for income lost during extreme summer heat, delivering immediate relief to those disproportionately affected. This approach could be adapted to address other climate risks, such as flooding or drought, where the parametric insurance can trigger payouts when extreme rainfall or water shortages surpass predefined thresholds.
Beyond Basic Healthcare: A Comprehensive Framework
Such an insurance plan should address a broader spectrum of climate impacts. Key features could include:
- Climate-Specific Health Coverage: Treatment for illnesses caused by heat, flooding, or water scarcity, such as heatstroke, waterborne diseases, and dehydration.
- Preventive Healthcare Services: Health screenings and protective equipment, among other essential measures.
- Livelihood Protection: Compensation for lost wages when extreme weather disrupts factory operations or transportation networks.
- Reproductive and Mental Health Support: Tailored services for women focusing on reproductive health issues and mental health impacts of recurring climate shocks.
Making Insurance Affordable: A Shared Responsibility
To ensure affordability, an industry-wide risk-pooling model could distribute costs among fashion brands, suppliers, and workers:
- Fashion Brands: Given their financial capacity and central role in supply chains, brands should bear the largest share, aligning with their broader sustainability commitments.
- Suppliers: Contributions from suppliers should reflect their narrower profit margins.
- Workers: Workers would contribute the smallest share, given their low wages, which in some regions have stagnated for years.
Pooling resources among stakeholders minimizes administrative costs, fosters shared best practices, and ensures uniform implementation. While this requires upfront investment, long-term benefits—such as supply chain resilience and compliance with human rights due diligence (HRDD) frameworks—outweigh the costs.
Ensuring Accessibility
For insurance to work, it must be accessible to all workers. Simplifying processes, providing multilingual support, and ensuring workers can access both public and private health facilities are essential. Worker organizations, including trade unions must play an active role in design and oversight, ensuring the system delivers on its promises.
One approach could be integrating climate-specific insurance into existing national healthcare systems, with employers, including brands, contributing to supplementary coverage for occupational risks associated with various climate extremes.
A Call to Action
With the 2025 OECD Forum on Due Diligence in the Garment and Footwear Sector approaching, we must seize this opportunity to bring diverse voices together and ensure that climate transition plans meaningfully align with worker rights in global garment supply chains.
Climate strategies of fashion brands cannot stop at carbon offsets or abstract goals; they must center the people most vulnerable to the crisis—workers in the Global South. As trade unions have long advocated, living wages represent a transformative pathway, strengthening workers’ agency to build resilience against climate crises. If living wages remain a challenge to achieve in the short run, brands must begin with actionable measures like a climate-responsive worker insurance program. Well-designed pilots can test this approach, potentially strengthening healthcare, advancing gender equity, and providing financial security for workers during climate disruptions.
As Josevine, a young garment worker from Tamil Nadu, powerfully stated: “During the COVID-19 crisis, we were abandoned by fashion brands—left to fend for ourselves with no payments even for completed orders, only hunger and debt. We don’t ask for luxury—we ask for dignity. A fair wage, safe conditions, and protection when disasters strike. That’s all we are asking.”
The fashion industry now stands at a pivotal moment to correct past failures and demonstrate true leadership—where sustainability and just transition are not just about the planet but also about the people whose labor drives the industry.
This article is written by Nandita Shivakumar, Shreya Murali and David Wofford who are part of United Nations Foundation’s Accountability Platform, a multi-stakeholder initiative dedicated to advancing the health and well-being of women workers in global supply chains. Manisha Bhise, with the Family Planning Association of India also contributed to the article. All views expressed are of the authors and do not necessarily represent those of the organisations they work for.
