Decarbonization Priorities for Brands

Background

Under the 2015 Paris Agreement – the latest legally binding international treaty on climate change – 195 countries are committed to limit global temperature increase to well below 2.0 degrees Celsius (° C) and to strive for 1.5° C above pre-industrial levels. In 2018, the Intergovernmental Panel on Climate Change (IPCC) released a report that provides evidence that limiting warming below 1.5° C will significantly reduce climate impacts including drought, sea level rise, flooding, and extreme heat.

This level of ambition will require significant reductions in greenhouse gas (GHG) emissions across the global economy leading to net zero emissions by 2050.

According to a recent joint report of the Global Fashion Agenda and McKinsey, the fashion sector contributed with around 2.1 billion tons of CO to equal 4.0% of the global GHG emissions in 2018. More than 70% of GHG emissions of the global apparel and footwear value chain result from upstream activities such as materials production and processing, so-called Tier 2 (textile manufacturing) and Tier 3 (yarn manufacturing) supplier stages. The remaining 30% are generated during downstream activities such as logistics, packaging, retail, product use, and end-of-use.

Definitions

In the following section, the definitions for emission categories according to the GHG Protocol Corporate Accounting and Reporting Standard3 are being used.

Scope 1 GHG Emissions (direct emissions)
Scope 1 emissions are GHG emissions that occur from sources that are directly controlled or owned by the organization, i.e., emissions associated with on-site stationary fuel combustion or mobile fuel combustion (vehicle fleet).

Scope 2 GHG Emissions (indirect emissions)
Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although scope 2 emissions physically occur at the facility where they are generated, they are accounted for in an organization’s GHG inventory, because they are a result of the organization’s energy use.

Scope 3 GHG Emissions (indirect emissions)
Scope 3 emissions are the result of activities from assets and services not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Scope 3 emissions include, in total, 15 categories not within the organization’s scope 1 and 2 boundaries.

Decarbonizations Priorities

In this context, identification of decarbonization priorities and “low hanging fruits” should be in line with accurate calculated emission inventories. Measures with high leverage effects, low investments, and without big operational changes, along with reasonable assurances of cost recovery for new infrastructure, should be prioritized first. Awareness should be raised beforehand regarding any possible conflicts with stakeholders and customers. Therefore, it is worthwhile to mention that GHG emissions should not be the single criterion in decision-making.

The following subchapters provide information regarding opportunities for brands and retailers to have an influence on their Scope 1-3 emission inventories, with the focus on four key areas:

■ Brand policies and strategies

■ Product management

■ Materials selection

■ Upstream activities and supply chain management

Brand Policies and Strategies

■ Build awareness for the latest climate science and politics, e.g.:

■ Paris Agreement: limit global warming to well below 2.0° C, preferably to 1.5° C by the end of this century, compared to pre-industrial levels;
■ EU 2030 Climate Target Plan: 40% below 1990 levels by 2030; strive for 55%; and
■ UNFCCC: 50% own GHG emission reductions (Scope 1,2 and 3) by 2030 against a baseline of not earlier than 2019; net-zero GHG emissions by 2050.

■ Be in line with latest climate science and politics. Set Science-Based Targets (SBTs)5 in alignment with latest climate science for your organization against an accepted baseline. Evaluate approval of SBTs through the SBTi.

■ Break down SBTs into milestones and own targets in accordance with SMART (Specific-Measurable-Attractive-Reasonable-Time bound). Implement sustainability strategy and set appropriate ambition levels.

■ Small- and medium-sized enterprises, as a first and minimum step, should start reporting energy-related CO2 emissions from the use of fuels and electricity. Other types of emissions such as methane or PFCs can be added at a later stage.

■ For Scope 1 and 2 emissions, start by identifying responsibilities and resources for data collection and GHG inventory calculations. GHG inventory calculations should follow acknowledged standards, such as the GHG Protocol Corporate Accounting and Reporting Standard or ISO 14064-1 and should be done on an annual basis.

■ Identify priorities in Scope 1-3 emission inventories considering

■ >70% share of GHG emissions of sportswear, fashion or other textile brand will be allocated in Scope 3 with the vast majority in the section purchased goods and services” followed by transportation and distribution.
■ Identify most energy intensive Scope 3 operations such as Tier 2 manufacturing – dyeing and finishing (5 to >25 kWh per kg product).
■ 85% of energy used in dyeing and finishing is needed for heating purposes; 15% is electricity (mostly bought from local grid).
■ A huge lever is given for the use of different types of energy carriers -40% CO2 emission savings are estimated by switching from industrial coal to natural gas;>95% is estimated by switching to biomass (see Appendix, Table 1).
■ Aim for a high share of renewable energy for your own operations; for owned facilities with large rooftops evaluate installation of solar panels; use day light and LED bulbs whenever possible; use motion sensors in large areas like warehouses.
■ Reduce business travels to a minimum; compensate unavoidable business travels (flights) through airlines that offer carbon off set programs.
■Check company fleet for emission-saving potentials.
■ Check service providers (e.g. logistical partners and energy providers) for CO2 efficient solutions.

■ Check for compensation programs /CO2 off setting for unavoidable emissions through international standards that are in line with the 17 sustainable development goals (SDGs) such as the UN Clean Development Mechanism (CDM), the Verified Carbon Standard (VCS), the Gold Standard for Global Goals (GS4GG), ornational/regional orientated standards. In Switzerland or Germany, for example, there are projects and standards for the renaturation of peatlands.

■ Improve corporate reputation and accountability through public disclosure of decarbonization goals and achievements – according to a recent study of KPMG, disclosing of carbon reduction targets is already considered global good practice.

■ Evaluate strategies for product end-of-life such as in-shop return systems and releasing of clothes into the marketplace through second-hand sales.

■ Be informed on innovations and new technologies. Make sure that impact arising from technologies is reasonable and that technology is not used for marketing purposes mainly.

■ Elastic textile fibers made from CO2
■ Conversion of waste CO2 into polyester

Product Management

■ Consider sustainable design as best practice and “out-of-the-box-thinking” on how to design, produce, and sell sustainable clothing that lasts longer, and that can easily be repaired and reused. According to a study by the Waste and Resources Action Programme (WRAP), extending the life of clothes by nine months of active use would reduce carbon, water, and waste footprints by four to ten percent.12 Sustainable design of clothing should meet the brand’s policies, strategies, and goals and should be focused on aspects such as:

■ Design for longevity
■ Design for durability
■ Design for reusability
■ Design for recyclability
■ Design for disassembly
■ Design for energy efficiency
■ Design for sustainable behavior

■ Limit the number of color shades to a minimum. Use predefined color schemes (e.g. pantone).

■ Limit the number of materials allowing for efficient order volumes and less batch changes.

■ Check if overcritical color matching tolerances can be widened.

■ Reduce manufacturing and especially air shipments of physical samples by:

■ Digital color management and color formulation solutions (e.g. datacolor)
■ Intelligent color approval systems
■ Virtual design and digital sampling technologies for prototypes and fitting samples (from design to production ten and up to 15 samples can be necessary); according to a study done by “The fabricant”, virtual design generates the least environmental impacts, as the only environmental input is electricity consumed for data devices, networks, and servers. Based on a case study, there is a 96% decrease in carbon emissions from one physical shirt to one digital equivalent mainly by avoiding production and transport of samples)

■ Match product quality specifications to end consumer target groups (urban fashion may not always need a 20,000 mm water column).

■ Consider performing LCAs for your final products using recognized software solutions such as GaBi or Umberto LCA+. If necessary, use consultancy services. LCAs can be very time-consuming and should therefore be applied only to selected product groups as for example high-volume products.

Materials Selection

■ Prefer dope dyed fibers over conventional dyed fibers.

■ Prefer recycled materials over virgin materials. Whereas mechanical recycling of polyester (bottle-to-fiber) is already a common practice, new technologies for chemical recycling of polyester are gaining more and more momentum. Other materials such as polyamide, wool, or down are commercially available as well.

■ Prefer single substrates over mixed substrates and fiber blends that require more complicated processing steps.

■ Prefer organic grown raw materials over conventional grown raw materials (organic cotton, for example).

■ Prefer responsibly sourced biobased polyester (such as PET but also other polyesters such as PLA or biobased PTT) over conventional polyester.

■ Print materials with digital printing technologies instead with conventional printing technologies.

■ Prefer materials that can be dyed and finished in energy efficient operations.

■ Reduce packaging materials. Prefer sustainable packaging solutions such as lightweight, recycled/recyclable or compostable.

■ In general prefer materials (including chemicals) with a ready available, calculated CO2e footprint in accordance with acknowledged standards such as the GHG Protocol or ISO.

Supply Chain Management (Scope 3 Emissions)

■ Know your Tier 1 and at best Tier 2 and Tier 3 suppliers and all relevant production units.

■ Check to see if suppliers have a continuous improvement program (CIP) in place with concrete targets and measures to mitigate environmental impacts.

■ Know the type of primary and secondary energy used in energy intensive operations (e.g., in Tier 2 production units).

■ Know the purchased electricity mix from all of your suppliers (percent share of renewables, fossil and nuclear). Be aware that, depending on the country and the regional grid-mix, the national grid emission factors may vary a lot.

■ Ask for a calculated CO2 footprint for your purchased materials. Identify and set ranges that are in alignment with your short- and long-term GHG reduction goals.

■ Ask for specific energy consumption (electricity and heating) per kg of production volume. Enforce/strengthen long-term partnership with energy efficient Tier 2bsuppliers (see Appendix; Table 2).

■ A huge lever is given for the on-site energy generation. Check boiler house efficiencies of suppliers. Efficiencies may vary a lot depending on applied technologies such as economizers for feedwater preheating or condensing boiler technology, maintenance of installations, burners and thermal insulations. Large boiler houses utilizing power heat coupling (co-generation) can achieve over 90% efficiency.

■ Enforce/strengthen long-term partnerships with engaging, pro-active and GHG efficient suppliers using a high share of energy carriers from on-site renewable sources.

■ Check awareness of suppliers for Best Available Techniques (BAT) reference documents, the so-called BREFs that have been adopted under both the IPPC Directive(2008/1/EC) and the IED.

■ Check supply-chain for the of funding support in order to lower financial barriers.

■ Promote non-conventional technologies such as CO2 dyeing or plasma finishing, if reasonable.

■ Aim for a high share of sea transport and avoid air shipments, whenever possible, by intelligent production planning and control.

■ Check for solutions to reduce ton kilometers (tkm) of freights. Bundle shipments whenever possible. Optimize material flow within the supply chain (at best countryA-to-countryA instead of countryA-to-countryB-to-countryC).

■ Check for logistical partners offering CO2 -low or CO2 -neutral transport solutions (mainly through CO2 compensation certificates).

■ Document all information in a database and use it for annual monitoring and benchmarking of your supply chain and your Scope 3 emissions.

Conclusions

Upstream operations such as Tier 2 manufacturers and Tier 3 raw materials producers are identified as the most energy intensive upstream activities of brands, followed by transportation and logistics. Improvements in energy efficiency, phasing out of coal, and/or transitions from fossil fuels to renewable energy sources are the big levers to decarbonize on-site energy generation and use, material production and processing, minimize production and manufacturing waste, and decarbonize garment manufacturing.

A brand’s supplier evaluation and selection system should comprise, along with conventional parameters like financials, lead times, capacities, reliabilities, or qualities, environmental parameters including energy efficiencies and GHG emissions (as already mentioned but not as exclusive criteria).

In this context streamlined collection of relevant information from upstream activities in a suitable database is the key for decision making. Close contacts and good partnerships with suppliers, who are willing to change for the good and have CIPs in place, will facilitate the process.
The major, direct contributions brands could make to emission reductions are to find new ways to utilize sustainable designs, increase circular business models promoting garment rental, resale, or repair; improve their materials mix; select preferred materials with lower CO2 footprints; increase the use of sustainable transport; improve packaging (with recycled and lighter materials); decarbonize retail operations; minimize returns; and reduce overproduction.

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