Why It’s Not Enough for a Fashion Brand to Offset Its Carbon Footprint

Solar arrays being installed on the roof of Patagonia’s distribution center. Photo: Ryan Inskip for Patagonia

Global warming is real, and fashion is part of the problem. 

Scientists have suggested that a 2°C temperature increase above pre-industrial levels will make more of our planet unlivable, with extreme heatwaves and droughts, among other, more frequent, disasters. Unfortunately, there is already a 20% chance that the global temperature increase will exceed 1.5°C before 2024, according to new climate data from the World Meteorological Organization (WMO). 

We need to be reducing emissions at a global scale, and that will require international coordination and government action — hence the Paris Accord. But as large emitters, companies have an important role to play as well. As consumers become more alarmed with the immediate threat that the climate crisis poses to us all, brands are rushing to set and promote commitments around carbon. Gucci, Burberry, Fat Face, Allbirds, and Organic Basics have all recently announced or updated initiatives around ‘carbon neutrality’ or ‘climate positivity’.

But what do those terms even mean? What goes into a carbon footprint? How can brands calculate footprints when we aren’t even sure of the fashion industry’s footprint as a whole? Are offsets good or bad? 

Let’s find out.

What is a carbon footprint and how is it calculated?

A carbon footprint is the estimated quantity of greenhouse gas (GHG) emissions produced as a result of an organization’s activities, or the production of a product. It’s measured in tonnes (that’s not just the English spelling, but refers specifically to metric tons, which are slightly different than American tons, for your calculations) of carbon dioxide equivalent (CO2e). This unit includes carbon dioxide and other GHGs like methane and nitrous oxide. ‘Carbon footprint’ and ‘carbon emissions’ are widely-used terms, but experts sometimes use the more precise terms ‘greenhouse gas inventory’ and ‘GHG emissions’.

The Scopes

Companies typically break their emissions down into three categories, or “scopes.”

• Scope 1 emissions are those created directly by a company, via vehicles or power sources it owns.
• Scope 2 emissions are those resulting from electricity purchased by the company. Think electricity and gas the company pays for to power its offices and stores.
• Scope 3 emissions are those occurring as a result of a company’s activities or operations but from sources a company doesn’t not own or control. Think the electricity used at factories a company sources from but doesn’t own, or the energy required to extract and process raw materials, like cotton or polyester.

Most companies measure and take responsibility for only Scope 1 and 2 emissions. However, for many businesses — especially those that produce physical goods — the bulk of the emissions are likely to be Scope 3 emissions, which include a broader range of activities that are in the company’s supply chain but that are out of its direct control, making the emissions harder to quantify. That’s why very few fashion companies have a sense for their total carbon footprint, because they aren’t familiar with how their cotton is grown, or what kind of electricity powers the cotton mill, for example.

So, when a fashion company shares its carbon footprint, it’s important to check what exactly the footprint is accounting for. Does it include Scope 3? If not, it’s conveniently excluding its largest and most relevant emissions sources.

Product vs Company Footprints 

Companies tend to measure and report their emissions in one of two ways: a company footprint that takes into account the climate impact of all the company’s key activities in a year, or a product footprint that takes into account all the emissions resulting from the production and distribution of one unit of a particular product.

Company footprints can be broken down into product-level estimates. And product footprints can be used to calculate a company-wide estimate, by totalling up the carbon footprints of all the products it made in one year. So, companies will often choose whether to report their emissions at a company or product level based on what it thinks will make a better story for consumers. 

In general, companies that focus on offsetting Scope #1 and #2 emissions (which generally includes office and retail operations and shipping product to customers) will report their carbon footprint at a company level; and companies that go beyond that to focus on Scope #3 emissions in the supply chain will highlight this by presenting their footprint at a product level.

There isn’t yet a standard methodology for calculating and reporting carbon footprints that companies are required to use, the way there is for financial accounting. So you can’t yet compare footprints among companies. But, a brand that isn’t treating carbon footprinting as a greenwashing exercise will make clear what its calculation accounts for and outline any assumptions made when putting it together.

Can we trust the data? 

The accuracy of any carbon footprint comes down to the data underlying it. In an ideal world, a brand would collect primary data related to every emissions-emitting activity in its business. That means electricity and gas bills that show exactly how much energy and fuel was consumed at every stage of processing, manufacturing, or transport in its supply chains. In practice, that’s almost impossible — brands often don’t know where their raw materials are sourced from, let alone how much gas was used to power the farm tractors! That’s where secondary data comes in, which are average estimates of material and manufacturing footprints.

Some brands will hire a specialist consultancy with access to a life cycle assessment (LCA) database that contains very specific emissions estimates for thousands of variations of materials and components. The consultant can comb through all the estimates for cotton, for example, and choose the one that makes the most sense for the brand in question. This can lead to a more precise carbon footprint. But it can cost tens of thousands of dollars — money that might be better spent investing in offsets or reducing the footprint itself (something we’ll get to in a bit).

So, smaller fashion brands tend to use more simplified, publicly-available databases and tools to calculate carbon footprints of their products. The Higg Materials Sustainability Index (Higg MSI) is a database developed by the Sustainable Apparel Coalition (SAC) that provides global averages for 127 materials and trims commonly used for apparel and footwear, which brands can use to calculate their carbon footprints. And, a newly released 2030 Calculator by Swedish sustainability startup Doconomy provides a simple interface for apparel brands to input data they likely have — about the material makeup and manufacturing location of their product — and automatically generate a footprint based on estimates from open-source LCA reports and governments data. Hopefully the increased availability and usability for tools like the Higg MSI data or 2030 Calculator will make product carbon footprints that include Scope #3 emissions increasingly common.

The high-level calculations these tools provide might not result in a number as accurate as a commissioned LCA. But that probably doesn’t matter, because how accurate the carbon footprint needs to be depends on what a brand plans to do with the calculation. Which leads us to…

What brands do with their carbon footprint

Offset Emissions

Calculating a carbon footprint is a necessary starting point for brands planning to take climate action, but it is just a starting point. The first step after it — and in fact, the only step a lot of brands take — is to ‘offset’ emissions. That means investing in projects that capture or reduce greenhouse gas emissions. If a brand offsets the exact amount of emissions it produces, it is ‘carbon-neutral’. If it offsets more than the amount it produces, it might claim to be ‘climate positive’ (though brands that are truly climate positive are those that capture or reduce their own emissions rather than buy offsets, through regenerative fashion practices, for example). 

Most offset projects fall into one of the following categories: renewable energy projects, land use projects that restore grasslands or forests, projects that destroy methane (a very potent GHG), or projects that distribute water filters or cookstoves to communities in the Global South that tend to burn wood for heat. Offset projects should be additional (which means the positive impact would not happen without that project), permanent (which means the GhG emissions avoided won’t be immediately released once the project is done), and independently verified. 

If a brand’s main plan is to offset emissions, it’s carbon footprint doesn’t need to be hyper-accurate as long the estimate takes into account all key emissions sources and is in roughly the right ballpark. In almost all cases, the cost of an LCA will be much larger than buying extra offsets to cover emissions that might have been undercounted.

That’s because offsets are cheap. One offset reduces one tonne of carbon emissions for between $3 to $15. Once you know how much offsetting costs, some brand commitments become a little less impressive. If we assume a $10 offset price, offsetting a pair of Allbirds Wool Runners with a carbon footprint of 7kg CO2e could cost as little as 7 cents. Offsetting a t-shirt with a carbon footprint of 12kg CO2e would be 12 cents. Etsy is open about the fact that offsetting shipping emissions costs the company ‘less than one penny per package’. 

Now, this doesn’t mean that brands shouldn’t offset their footprints. In fact, given how cheap offsets are, there isn’t really an excuse for not offsetting emissions, especially since they do translate into concrete support for projects that reduce emissions. But we should consider calculating and offsetting carbon footprints to be the bare minimum. The brands that have something to talk about when it comes to their climate impact are the ones that don’t stop at offsetting footprints, and instead focus on reducing them.

Reduce Emissions

Commitments around offsets aren’t ambitious enough at the rate we are heating up our planet. The goal needs to be reductions. Unfortunately, even brands that are very specific about the makeup of their carbon footprints have a lot less to say when it comes to how they plan to make reductions.

There are two different types of reductions that brands can achieve when it comes to their carbon footprints. First is reducing emissions intensity, which means reducing emissions relative to output. For example, Kering, owner of Gucci and other luxury brands, committed to reduce its total carbon intensity per dollar of revenue, and recently announced a 24% reduction in carbon intensity compared to 2015. (However, its overall emissions went up because of the sales growth of its brands.) 

If a brand reduces the carbon footprint for one of its products, then it’s achieved a reduction in emissions intensity. It might be able to do this by switching to a different material with a slightly lower footprint, for example, or helping finance energy efficiency in a key supplier factory. For a brand looking to achieve reductions via these small tweaks, having a very accurate footprint based on data for its exact production processes could help it identify opportunities to generate some carbon savings. 

A reduction in emissions intensity is good, but a reduction in absolute emissions is better. This means the brand brings down its total emissions, at a company level, even as the business grows. Achieving absolute reductions requires major investments in alternative materials, production methods, transportation methods or facility construction and operations. The brands that are most serious about their climate impacts set ambitious absolute reduction targets and clearly communicate their progress against them. Nike, for example, has committed to an absolute reduction of Scope 1 and 2 emissions by 65% and Scope 3 emissions by 30% by 2030 and outlines changes it is making to its supply chain to get there — though it has not announced any achieved absolute reductions yet. 

Nike’s targets were set in alignment with the Science Based Targets initiative, a partnership between the UN Global Compact (UNGC) and the World Resources Institute (WRI) that helps major companies set greenhouse gas reduction targets that are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement. Commitments like these will be the ones worth celebrating, once they have been achieved.

What consumers should do with a carbon footprint

So, now we know there isn’t an exact science to calculating a carbon footprint and that the real value is not in adding up emissions but reducing them, what can we do?

Well, we can start by not getting too excited about a brand announcing that it is carbon neutral or has labeled its products with a carbon footprint, and instead check to see what that actually means. At the moment, it’s down to the consumer to check what a brand has factored into the footprint it is communicating — and what it hasn’t — and whether it has set or made progress against any reduction targets. You can do this by digging through a brand’s website or impact reports, or by checking Good On You for any information about carbon-related commitments or actions.

Ultimately though, a lot of this is out of consumers’ hands and on brands. Businesses are unlikely to commit to the emissions reductions we need of their own accord, so we need legislation that mandates a common reporting structure for carbon footprints and requirements for swift and significant absolute reductions. 

Europe is probably the farthest along in this regard. In the UK, large companies are required to include their carbon emissions in their annual reports. And the European Union is working on an ambitious plan that aims to achieve net-zero carbon emissions across the bloc by 2050. This ‘European Green Deal‘ will impose emissions taxes on imports to incentivize purchases from carbon-efficient companies – which should in turn encourage companies to reduce emissions. So, if you’re in an EU country, add supporting the European Green Deal to your list of climate actions! And if you’re elsewhere, keep your eyes peeled for carbon-related legislation you can advocate for. Our planet depends on it.