Last week, Carbon Trail became one of the first few lifecycle assessment solutions to be declared as PACT conformant. This implies that we adhere to the technical specifications published by the Partnership for Carbon Transparency, PACT which is the global standard for calculating and exchanging Scope 3 data across entire value chains. It has been developed by the World Business Council for Sustainable Development (WBCSD) with leading stakeholders from across the entire carbon ecosystem - leveraging its role as co-convenor of the Greenhouse Gas Protocol. This declaration of conformance acknowledges that Carbon Trail’s solution meets all technical specifications outlined by PACT's Pathfinder framework and has been independently tested by at least two other PACT conformant solution providers.
We are proud to join the PACT vision with our mutual goal to enable our clients and their entire value chain to make smart, carbon-informed business decisions to deliver on climate commitments and reach net zero.
Why is PACT important for fashion?
The fashion industry is under increasing pressure to decarbonize but struggles to get access to primary data and create transparency on emissions across the value chain (Scope 3). PACT is resolving this challenge by developing the global methodological and technological infrastructure needed for product-level emission accounting and exchange. The Pathfinder framework establishes clear guidance for carbon accounting along value chains, supporting organizations in securely sharing their emissions data with their downstream partners.
Amongst all sustainability-related information, Product Carbon Footprints (PCFs) are emerging as the most important in the fashion industry. In an earlier blog, we covered several use cases including how Product Carbon Footprints (PCFs) can solve Scope 3 accounting in Fashion Industry. The capability to interconnect with other solutions and exchange product footprint data, in a standardized format, is essential for helping stakeholders in the fashion value chain exchange and use sustainability data for GHG accounting.
Major issues with environmental footprinting in fashion today
Lack of standardization in data exchange between parties: A common concern in the fashion industry has been the lack of standardization in the emission data exchange format between stakeholders, leading to the proliferation of several company-specific data collection spreadsheets. These quickly become unwieldy as the number of suppliers increases.
Inaccurate allocation of primary facility data leading to overcounting or undercounting of Scope 3 emissions: Today, brands allocate emissions from their supplier's facilities purely based on the amount of volume they purchased during that year without considering the diversity in products produced by the facility during the same period. This leads to severe over or undercounting of emissions. Some brands inaccurately allocate the aggregated Scope 1 and 2 emissions of their suppliers to their own Scope 3 emissions accounting which further exacerbates the problem as suppliers have facilities creating different products using different sets of processes. We covered this issue with examples in another post earlier.
Data confidentiality concerns among suppliers: There's a growing concern among textile manufacturers and export houses that are supplying multiple global brands and retailers about the amount of information they're sharing about their operations with buyers. Information about the facility's total production quantity, resource consumption, and man-hours can potentially disclose the entire facility cost structure, enabling brands and retailers to negotiate and further squeeze margins in the fashion supply chain.
How is PACT solving these issues?
The Pathfinder framework leverages and builds on existing methods and standards for the calculation and allocation of product-level emissions, including:
ISO standards for lifecycle assessment (LCA) (14044/40, 14067)
Product Environmental Footprint (PEF) and Product Environmental Footprint Category Rules (PEFCRs) by the European Commission
Data standardization: PACT helps companies exchange PCF information using the same standardized technical language with the aim of simplifying the collection and use of shared data. The technical specifications of the Pathfinder framework include:
A data model to exchange PCF information between systems, which defines which data elements must be shared and in what format.
The data quality or primary data share of footprints, bringing transparency to the accuracy of the emissions information provided.
Information related to the assurance and verification of the PCF, providing the necessary confidence to trust the data.
Though the Pathfinder framework specification is industry-agnostic, its data model can be extended to include any data that is unique to the fashion industry or product type. A PACT conformant solution can standardize the fashion sustainability data exchange across different parties, enabling data transparency and collaboration.
Allocation: PACT recommends avoiding allocation by disaggregating the textile manufacturing processes into sub-processes specific to the studied product and using primary emissions data specific to those processes. When avoiding allocation is not possible, PACT recommends using allocation methods as per industry-specific Product Category Rules (PCRs) such as the upcoming PEFCR for Apparel and Footwear.
Data confidentiality and sovereignty: The Pathfinder framework allows data owners the flexibility to exchange data at different levels of granularity with access rights controls and the ability to approve each PCF exchange.
How Carbon Trail conforms to PACT
Carbon Trail works with each player in the fashion supply chain (i.e., retailer, brand, trader/supplier, and manufacturer) to help them automatically measure their environmental footprint. Carbon Trail’s platform seamlessly integrates with any ERP data system like SAP, PLM software like Centric, facility energy data collection tools like Enablon, e-commerce platforms like Shopify, and even Excel spreadsheets, and then applies machine learning algorithms to automatically extract useful information for measuring environmental footprints.
Carbon Trail’s platform creates PCFs that can be automatically shared with any other 3rd party tool, or internal tools, that fashion companies use through standardized APIs. This could be from manufacturer to brand or brand to retailer or between different tiers of manufacturers.
Finally, for companies lacking technical talent, Carbon Trail can also help align their existing GHG accounting systems to receive PCF data from Carbon Trail's platform thus making onboarding simpler and eliminating the need for any customized spreadsheets.
By becoming a PACT conformant solution, Carbon Trail becomes the only fashion-specific lifecycle assessment and carbon accounting solution so far with the capability to interconnect with other solutions in a standardized and secure manner. By onboarding to the Carbon Trail platform, fashion companies can now save the valuable time they spend in collecting and standardizing data from manufacturers and focus on what's important - cutting down carbon and getting to net zero.
Figure 3: Focus of the Pathfinder Framework