RFP Guide for Fashion Carbon Accounting and LCA

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In the fashion industry, businesses are increasingly recognizing the importance of sustainability and are embarking on a journey to decarbonization, fuelling the demand for a robust environmental impact measurement platform.

With many options available in the market, navigating through the selection process can be overwhelming. This guide aims to demystify the process by providing you with comprehensive insights and practical tips on crafting a Request for Proposal (RFP) tailored to the fashion industry’s unique needs, including the key criteria to consider, a list of the top questions to ask, and the types of answers to expect.

If you are looking for a Corporate Carbon Accounting or Product Life Cycle Assessment (LCA) software provider, this RFP guide for fashion carbon accounting and LCA will provide you with a comprehensive understanding to evaluate solution providers that are tailored to the fashion and retail industry.

Key Stakeholders to be involved in the RFP process

Carbon accounting, LCA and decarbonization effort impacts a range of different teams and the RFP process should involve these stakeholders to get their buy-in. All these teams have a role to play in structuring, tracking, and leading the decarbonization journey.

CSO (Chief Sustainability Officer) and sustainability team: Have experience working with carbon management consultants and providers.  

Finance team: Provide valuable insights into the financial implications of carbon accounting and reduction projects. Also, ensure that cost estimates align with your company’s financial planning and budget.  

Sourcing team: Responsible for managing sourcing fibers, yarns, and fabrics for apparel and can provide feedback in identifying and evaluating providers that offer solutions to source sustainably. 

Product design and development team: Responsible for sustainable design of garments and footwear and can help assess whether the platform can support eco-design practices.    

IT team: Provide technical expertise when it comes to systems integration, platform security, and scalability. Provides support in extracting data via spreadsheets when system integrations are not possible.  

What approach to consider for measuring emissions

Depending on the data availability, maturity, and requirements from regulations, three approaches can be used for measuring the company’s carbon emissions.

Best Apporach to measure Scope 3 emissions in Fashion and Retail

Different approaches to measure GHG emissions varying on accuracy

If your company is still early in the carbon management journey and doesn’t have a public commitment to carbon reduction, an average estimation or hybrid approach might be sufficient, though not ideal.

However, if your company is actively pursuing carbon reductions and measuring emissions accurately, as per GHG protocol, the best approach is to leverage product-specific emissions (LCAs) for measuring corporate carbon footprint.

What to look for in a carbon accounting tool

1. Fashion and retail industry knowledge

Does the prospective provider have specialization in the apparel and footwear industry?

Providers with a deep understanding of the complexity of the fashion supply chain will help you capture industry and facility-specific emissions i.e., many tiers of suppliers with different energy and chemical mix in the production process, and variation in emissions of fibers based on country, location of farming, processing, etc.

2. Alignment with global standards and methodologies

What global standards and protocols does the provider follow?

The Platform uses methodologies that are aligned with GHG protocol and the Science-Based Targets initiative (SBTi). Capability to set new targets broken down per scope/category, e.g., absolute vs. intensity targets, or import existing targets. Ability to monitor and showcase progress towards targets, thereby demonstrating your commitment to climate action.

3. Comprehensive GHG accounting

Does the provider have capability of calculating emissions across all three scopes (Scopes 1, 2, and 3)?

GHG accounting requires granular reporting beyond Scope 1 and 2 and include all Scope 3 categories. Solutions that measure only Scope 1 & 2 aren’t sufficient as Scope 3 accounts for greater than 95% of a typical brand or retailer’s carbon emissions.

GHG Accounting categories applicable to Fashion and Retail

4. Product-related Scope 3 emissions

How does the provider calculate product-related emissions for Scope 3 accounting?

Ability to measure product-related Scope 3 emissions using product-specific LCAs at scale for the following categories:

Category 1 – Purchased goods and services

Category 4 – Upstream transportation and distribution

Category 9 – Downstream transportation and distribution

Category 11 – Use of sold products

Category 12 – End-of-life treatment of sold products

5. Data integration capabilities

How automated is data collection and integration with your prospective provider?

API integration with your internal data systems e.g., ERP (Enterprise Resource Planning), PLM (Product Life Cycle Management), Higg FEM (Facility Environmental Module), Business Travel system, Car-lease software, etc.

6. Standardized data templates

Are you set up for success in case your data systems are not in place or not set up for API integrations?

Ability to provide standard data collection templates for Scope 1, 2, and 3 activities in case the company’s data systems are not ready for automation. The provider should have the capability to process unstructured data at scale.

7. Automated and real-time carbon accounting

Do you need to expend considerable manual effort after onboarding to the solution provider?

Automated calculations: The platform can find the most appropriate emission factors automatically for all activities while supporting manual review and intervention to change the chosen emission factors if needed.

Real-time results: Capability to provide real-time or near-real-time emission monitoring, allowing for proactive sustainability management and quick response to changes e.g., run analysis at any point of year to be as ‘live’ as possible.

8. Identify and fill in data gaps

Does the provider help you automate the identification of data gaps and provide support in filling them?

Capability to identify data gaps (using machine learning) at any time of year and create proxies to fill in those gaps e.g., when utilities are included in a store rent, proxies can be used to fill in the consumption of energy, gas, etc.

Further, the ability to provide full transparency on such data gaps and the source/assumption used in calculations for audit purposes.

9. Transparency of data sources

What level of transparency is available for data gaps, emission factors etc.?

Full traceability and transparency about emission factors, data sources, year, geography, etc. to allow understanding and auditability of each emission calculation.

10. Compliance and reporting

Which regulations does the platform help you comply with?

Capability of the platform to comply with relevant legislations such as Corporate Sustainability Reporting Directive (CSRD), GRI, CDP, etc., and make it easy for your company to measure specific KPIs (Key Performance Indicators), charts, etc. as per external reporting template.

11. Supplier data collection and integration

Does the provider help you collect supplier-specific primary data?

Capability of the platform to engage Tier-1 to Tier-3 suppliers for facility-level data collection and aggregation. Integration with third-party systems to ingest facility data collected separately.

12. Data validation and anomaly detection

Does the platform help with data validation and detection of errors?

Ability to validate the factory-level data provided by suppliers by using OCR technology over bills and other documents. AI/ML capability to identify and report anomalies e.g., accidental errors in self-reported or 3rd party verified supplier data.

13. Relevant emission factors

What emission factors and databases are used, and are they updated frequently? 

The accuracy of emissions depends on the use of primary activity data along with the latest and most appropriate emission factors.

Comprehensive emission factor database: A large database of emission factors from reputed sources such as ADEME, DEFRA, EcoInvent, eGrid, IEA, IPCC, NGA, US EPA, BEIS, etc.

Up-to-date emission factors/databases: Ability to update emission factors dynamically as new industry standards or emission factors become available, ensuring the data stays current.

Custom and local emission factors: Capability to use localized/supplier-specific emission factors, considering that emission factors can vary based on geographical locations and energy sources.

14. Automated data collection and communication

How does the platform help with the data collection effort? 

Automated data extraction: Ability to automate the data extraction from invoices or PDFs wherever possible, minimizing manual input and errors e.g., Optical Character Recognition (OCR) for utility invoices.

Data collection via surveys: Ability to send surveys to collect data across functions such as Retail, Warehouse, Logistics, etc., and automate communication via the platform e.g., The admin sends surveys via the platform and the receiver receives a notification via email to submit data within the platform with reminders/notifications.

15. Industry benchmarking

Does the platform help you compare yourself with your peers?

Benchmarking features that allow the comparison of emissions against industry averages (as defined by the European Commission, CDP, etc.) are critical in assessing how much better you’re doing compared to other companies.

16. Science-based targets

Does the platform provide help with setting science-based targets and measuring performance in achieving these goals?

Ability to support you in setting ambitious and achievable Science-Based Targets (SBTs) as per Apparel and Footwear sector guidelines. The ability to define multiple scenarios and incorporate existing targets validated by SBTi into the platform for measuring and tracking progress.

17. Decarbonization support

Does the prospective provider have the capability to go beyond measuring emissions and helping you identify reduction opportunities?

Scenario analysis and modeling: Ability to simulate the impact of decarbonization initiatives on emissions e.g., substituting materials, suppliers, production processes, energy sources, freight types, etc.

AI-led carbon reduction recommendations: Ability to leverage AI to process data across the business lines, product types, and supply chain to automatically recommend decarbonization initiatives. Teams with no prior industry experience can use the platform to understand emission hotspots in the product supply chain and take necessary action.

Consulting support for implementation: The capability to identify providers and help you implement a range of carbon reduction initiatives in the supply chain such as energy efficiency improvements, renewable energy projects, sourcing alternate fibers, suppliers, logistics partners, etc.

18. Managing organizational complexity

Can the platform manage the nuances of having multiple business units?

Capability to manage emissions for an organization with many entities e.g., an organizational group with multiple subsidiaries. Each subsidiary can manage its carbon footprint while the group admin can overview the entire group-level footprint.

19. Audit trails and document storage

How does the platform help with 3rd party audits?

Ability to provide an audit trail so that each activity and emission calculation can be audited by 3rd party assurers such as consultants, auditors, and controllers. Store documents such as utility bills with relevant activities to simplify audits.

20. Internal carbon pricing

Does the platform support with setting internal carbon prices and targets?

Ability to integrate with carbon pricing mechanisms or tools to estimate the financial cost associated with emissions, aiding in financial planning and decision-making. By creating a carbon contribution budget based on an internal carbon price, the company can invest in decarbonizing its products.

Internal carbon fee: a fixed price must be paid internally for each tonne of carbon emitted.

Shadow fee: an assumed fee for carbon that’s considered in investment decisions as a risk assessment tool and is not paid out internally in reality.

What to look for in a life cycle assessment (LCA) tool

1. LCAs at scale

Can the provider conduct LCAs for your entire product collection?

Capability to conduct product life cycle assessments of thousands of products using AI to automate each manual task involved. This approach processes hundreds of parameters at once, cutting time and cost to a fraction vs. traditional LCAs.

2. Product information collection

Does the prospective provider take accountability for product-level data collection, clean-up, and validation?

Support for collecting product or fabric level data from suppliers via surveys and automated validation to identify errors. This data includes technologies of manufacturing processes, yarn sizes, printed surface area, etc.

3. Facility and process-specific emission factors

Are you looking for LCAs that reflect your actual product emissions and account for supply chain level interventions e.g., renewable energy, low chemical dyeing, etc.?

Capability to leverage primary energy and chemical use at a factory and process level to capture the actual emissions in a product supply chain. LCAs using primary data help brands measure and track emissions reduction in the supply chain (scope 3 emissions), meet strict requirements on green claims, and differentiate the product on environmental performance vs. benchmark.

4. Real-time LCAs

Does the solution provider have the capability to update LCAs in real time based on changes in the supply chain?

Capability to update product life cycle assessments based on any changes in the supply chain or product data and versioning reach result to track history. Unlike traditional LCAs that go stale over time, real-time LCAs ensure that the results always reflect the true environmental impact of products.

5. Align with global standards

What methodology does the provider use while conducting LCAs?

Ability to conduct life cycle assessments as per global standards like ISO 14067 and PEFCR (Product Environmental Footprint Category Rules) for Apparel and Footwear which is becoming the de-facto standard for the industry.

6. Transparency on data gaps and assumptions

Does the platform offer transparency on how the data gaps are filled and what assumptions are used?

Ability of the platform to classify and disclose each data gap in the product LCA for full transparency and share how each data gap is filled with heuristics or industry-based assumptions.

7. 3rd Party review and certification

How simple is the audit process once LCAs have been calculated?

Capability to provide audit-ready data (primary data, proxies used, LCA datasets) for any 3rd party to review the LCA results and certify the results comply with ISO and PEF (Product Environmental Footprint) standards for customer communication and green claims.

8. Data Quality Rating (DQR)

How does the provider handle uncertainty in the data used to calculate the LCA?

Ability to measure the uncertainty or DQR of each activity and LCA dataset to help understand how representative the calculated footprint is and which data gaps need resolution to improve the DQR scores.

9. Eco-design and simulations

Does the provider offer solutions that assist in designing lower-impact products?

Capability to simulate and compare the life cycle assessment of multiple products at once to empower product design and development teams with ideas to eco-design future collections.

10. Modularity and flexibility

How does the platform support LCAs for different system boundaries and product components? 

Support for Cradle-To-Gate or Cradle-To-Grave LCAs along with the flexibility to conduct LCAs of either fabrics, garments, or entire products.

11. Comprehensive environmental impact assessment

Does the provider measure impact indicators like water and energy used along with carbon?

Capability to cover the PEF-recommended 16 environmental impact indicators and include additional impact indicators such as water consumption (liters) and energy consumption.

LCA Environmental Impact Indicators

12. PEF and Eco-Score

Is the solution aligned with the PEF methodology?

Ability to combine the impact of all impact categories to a single PEF score (Eco-Score as per AGEC) to rate each fashion product and compare against the industry benchmark.

13. Digital Product Passport (DPP)

Does the platform support the creation of digital product passports for transparent disclosure of traceability and sustainability information?

Ability to create a digital product passport that can showcase information about the product (such as product traceability, recyclability, etc.) as per emerging standards such as AGEC (in France). Also, support integration with other DPP providers via APIs to facilitate seamless exchange of product data if required.

14. Certification validation and storage

What support does the platform offer to collect, store and validate certifications?

Storage and validation of product (or fabric/fiber) certification documents such as Global Organic Textile Standard (GOTS) that can then be used to support claims in Digital Product Passports.

15. AI Copilot

Does the solution provider have the capability to leverage generative AI for automation and insights?

State-of-the-art solutions have incorporated Generative AI which gives users a conversational interface to:

i. Dive deeper into the footprint of individual products, identify hotspots and impact reduction opportunities, and create custom charts to visualize the data for other stakeholders.

ii. Compare and visualize the footprint of two products.

iii. Ask for the change in impact made based on any tweaks made to existing products e.g. “What would be the change in the footprint of this product if I were to swap conventional cotton with organic cotton?”

Enterprise readiness attributes to look for in each solution

1. Customer onboarding and support

Does the prospective solution provider offer white-glove onboarding?

The most critical step in evaluating a provider is that there is a dedicated customer service team to reach out to for support if needed. This can increase product adoption rate across stakeholders and ensure everyone in the company is contributing towards your decarbonization journey.

2. User-friendly dashboards

Does the platform provide flexibility to build customer charts and dashboards?

A user-friendly interface that’s intuitive and easy to navigate can accelerate software adoption and value realization. Such dashboards allow anyone to comprehend the data and generate insights for easy decision-making. The ability to filter data for different time periods, company subsidiaries, scopes, etc. is critical for measuring and understanding the company’s carbon footprint and progress towards climate targets.

3. Role-based access control

Does the platform support access control based on user type?

Ability to define and assign user roles such as administrator, general, or guest, and manage their privileges to protect sensitive information. Support for multi-factor authentication and SSO (single-sign-on), with existing identity providers like Microsoft Azure Active Directory, to ensure that user access is secure and protected.

4. Data privacy and security controls

Does the platform comply with internationally recognized security & privacy standards such as SOC 2 and ISO 27001?

Given the sensitive nature of data being shared with the platform, the data must be kept confidential and protected from unauthorized access or breaches.

5. PACT Pathfinder Framework

Does the solution allow seamless exchange of product footprints in conformance with the PACT framework?

Alignment with the PACT Pathfinder Framework created by WBCSD allows integration of Product LCAs into 3rd party carbon accounting tools (if required) while also providing the most secure method of exchanging product footprint data between value chain partners.


Conclusion

This RFP document for Fashion and Retail industry lays out the blueprint for impactful climate action to decarbonize product manufacturing, supply chain, and company operations. It is critical to spend some time upfront to understand the company’s decarbonization targets and establish unique requirements for a solution provider based on these goals.

We hope our guide will serve you in crafting a comprehensive RFP that clearly outlines your requirements, filters the right providers, and ultimately helps your company select the best solution partner for meeting your carbon reduction targets.

As discussed earlier, including all key stakeholders in this process is imperative. Supported by the right solution provider, you have a strong toolset to become a sustainable fashion company.

Expertise in LCA, supply chain traceability, decarbonization strategy & implementation with prior experience in developing a net-zero roadmap for fashion and retail customers.

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