Loss & damage funding could change lives

As COP29 wraps up, the draft proposal offers a mere $250 billion per year by 2035 from rich nations, with no dedicated grant funds for Loss and Damage and Adaptation. This falls far short of what the world’s most vulnerable communities – those least responsible for the climate crisis yet hardest hit – urgently need. Swedwatch speaks with Syeda Moontaha Ahmed from the Bangladesh Garments and Industrial Workers Federation on how garment workers are suffering from the double burden of economic exploitation and climate crisis.

Inside the COP29 negotiating rooms in Baku, where climate finance is being debated—how much is needed, who should pay, and what it should cover—many participants are likely wearing clothes made by underpaid Bangladeshi garment workers. Their lives are intricately connected to the outcomes of these high-level global discussions.  

More than 4 million Bangladeshis work in the country’s garment sector, most of them women.  Despite being one of the key apparel suppliers to major fashion brands and retailers in EU, most of these garment workers continue to be deprived of living wages, forced to go into debt and work overtime to cover basic needs, as shown in a recent Swedwatch briefing Paying the Price for Fashion. Trapped already in an exploitative economic system, now they also face worsening hardships due to the rising frequency of climate-related disasters.  

As reported in the briefing, there are signs that a growing number of people displaced by climate-related events are finding employment in the garment sector. Many are relocating to Bangladesh’s capital, Dhaka, and to surrounding areas due to loss of livelihood resulting from the overexploitation of natural resources and natural disasters in their home villages. In addition, climate-change impacts can also be linked to a rise in health issues, which further weaken workers’ resilience to crisis.

The climate breakdown threatens human rights of workers across all regions

Syeda Moontaha Ahmed, program coordinator from the Bangladesh Garments and Industrial Workers Federation (BGIWF) has been witnessing this suffering firsthand. Many garment workers, especially those from flood-prone areas like Kurigram and Sunamganj, have seen their homes completely submerged or swept away by river erosion and flash floods during the monsoon rains of 2023 and 2024, she says.  

“The floods left many families of garment workers homeless, forced to live in temporary shelters, and struggling to secure basic necessities, causing immense stress and economic insecurity,” she says, adding that the threats don’t end there. In recent years, Bangladesh has been facing intensifying heatwaves, with temperatures exceeding 40 degrees Celsius. “Garment workers get sick in their workplaces as well as in their homes. Often those who work in poorly ventilated and crowded factory spaces are more vulnerable. Many suffered from dehydration, heat exhaustion, and fainting due to the high temperatures, with limited access to medical support or air conditioning.” 

This is not just a challenge for Bangladesh; it reflects a troubling pattern of climate breakdown that threatens the safety and human rights of workers across all regions, with an estimated 2.4 billion workers at risk of serious health hazards due to severe heat.  
 
Bangladesh, one of the major manufacturing hubs for fast fashion—a sector responsible for up to 10% of global carbon emissions annually—faces severe climate impacts despite contributing minimally to the climate crisis. It is ranked as the world’s seventh most disaster-prone country, enduring frequent weather extremes each year such as tropical cyclones, floods, and heatwaves. Between 2000 and 2019, extreme weather events have caused more than 11,000 deaths and economic losses amounting to $3.72 billion.  

“Garment workers earning less than a living wage are not equipped to face such losses, leaving them to suffer the most,” Syeda Moontaha Ahmed warns. The national minimum wage for workers was recently raised from 8,000 taka to 12,500 taka (around €94) per month. But it still leaves workers earning only 38% of what would be considered a living wage.  

A matter of economic and climate justice 

The fund to respond to loss and damage (FLRD) established by the UN has brought some form of hope for Syeda Moontaha Ahmed. She sees the most recent pledges including from Sweden as a way to increase support for garment workers and their hard-hit communities. Optimistic of the changes that could be made in their lives with access to such funding, she noted: “Workers could receive direct emergency financial assistance from a portion of the loss and damage funding. They may have a more robust financial safety net if they received cash grants or short-term stipends to help them restore their homes, locate temporary housing, or pay for immediate living expenditures.”  

But as it stands, it remains uncertain how much funding will actually reach those in need. Climate-induced loss and damage is estimated to cost somewhere between $290 to $580 billion per year by 2030, while the Fund currently holds only $720 million—a tiny fraction of what is required. Even more worrying, previously promised amounts in climate finance have not been delivered, with the majority coming as loans and focused on mitigation rather than adaptation. This failure is a key reason why loss and damage have worsened, revealing the deep injustice within climate finance. 

At COP29, debates continue over whether to incorporate loss and damage—alongside adaptation and mitigation—into the new climate finance agreement known as the New Collective Quantified Goal (NCQG), with dedicated grant targets and clear tracking mechanisms to ensure accountability. A key demand is to close the funding gaps with taxes and levies on fossil fuels extraction and other polluting industries. For example, taxes on sales of luxury fashion, big technology and arms could raise $112 billion by one estimate. However, wealthy nations, including member states within the EU and Sweden, have resisted committing to the trillions of dollars needed by vulnerable countries to fight the climate crisis. Instead, they have called for more countries to contribute and emphasized reliance on private investments. 

This situation highlights the broader economic injustices that must be considered in discussions around climate finance. The garment sector is a prime example of this imbalance. According to a report from Worker Rights Consortium (WRC), garment workers producing goods for western companies have been denied $5 billion in unpaid wages and severance over the past 15 years — an amount that dwarfs current pledges to the loss and damage fund.  Swedwatch’s findings show that when companies cancel or delay their orders, the financial and social burdens of these crises are increasingly passed onto low-wage garment workers, deepening wage insecurity and social inequality. This lost income could have helped these workers improve their living conditions, become more resilient, and recover from disasters.  

Furthermore, a recent study, What Fuels Fashion? shows that nearly a quarter of major fashion brands still lack decarbonization plans. This means they continue to generate significant emissions, exacerbating the risks faced by their own workers.  Almost no fashion brand discloses how they are supporting workers and communities in their supply chains affected by the climate breakdown in places such as Bangladesh. If negotiators in Baku fail to stitch together a fair and rights-based climate finance agreement, garment workers and low-income communities — often found at the bottom of the global supply chains — will continue to bear the heaviest burden.

Workers could receive direct emergency financial assistance from a portion of the loss and damage funding. They may have a more robust financial safety net if they received cash grants or short-term stipends to help them restore their homes, locate temporary housing, or pay for immediate living expenditures. /Syeda Moontaha Ahmed 👇🏼

Learn more about the lives of garment workers in Bangladesh in Swedwatch’s briefing “Paying the Price for Fashion”

Contact at Swedwatch

For questions, please contact our climate expert:
Lubna Hawwa
+46 (0) 72 224 48 54
lubna@swedwatch.org