The Challenge of Scope 3 Emissions and Product Footprints

The fashion industry faces significant challenges in addressing Scope 3 emissions, which represent the bulk of environmental impact across the value chain. From raw material sourcing to end-of-life product disposal, understanding and reducing these emissions require overcoming a complex web of data gaps and supply chain hurdles.

What Are Scope 3 Emissions and Why Are They Important?

Scope 3 emissions refer to indirect emissions that occur across a company’s entire value chain, including suppliers, logistics, product usage, and disposal. For fashion brands, these emissions can account for up to 90% of their total carbon footprint, making their management critical for achieving meaningful sustainability goals.

However, addressing Scope 3 data is particularly challenging due to:

• Lack of standardized reporting across global suppliers.
• Difficulty accessing reliable primary data for materials and manufacturing.
• Limited integration of existing tools with emission calculation frameworks.

The Patchwork Data Problem

1. Supplier Data Collection Challenges

David, a sustainability director at a leading footwear brand, understands the frustration of collecting data from Tier-1 and Tier-2 suppliers. Despite rollouts of frameworks like Higg FEM, suppliers often fail to provide accurate or timely data. One retailer summarized the issue:

“Not getting enough primary data from suppliers; even the rollout of Higg FEM is slow.”

The inconsistent engagement levels from suppliers, compounded by diverse global standards, leave sustainability managers scrambling to map even 50% of their supply chains.

Collecting data from Tier-1, Tier-2, and Tier-3 suppliers is quite challenging

2. Data Accuracy and Reliability

Even when data is available, brands often question its reliability. For example, one brand revealed:

“45% of the supply chain is mapped, but the rest is still a work in progress, especially for material-level data.”

Materials like cotton, recycled polyester, and other raw inputs frequently have fragmented origins, making accurate accounting nearly impossible. You can read more about the challenges in Scope 3 accounting in fashion in our other blog here.

The Complexity of Product Footprints

1. The Challenge of Calculating Carbon Footprints for Complex Products

Assessing product-level footprints adds another dimension of difficulty. Products often consist of diverse materials and multiple layers of suppliers. One brand representative aptly noted:

“The big challenge is incorporating Higg FEM data into carbon calculations, particularly for complex products with multiple fabrics and supply chain nodes.”

2. Lack of Integration with Current Tools

Existing tools are often inadequate for Scope 3 emissions accounting. A common sentiment from brands is that solutions:

• Fail to automate data integration from multiple sources.
• Lack granular insights into material and production-level impacts.
• Don’t support the full value chain accounting, such as cradle-to-grave or cradle-to-cradle approaches.

Addressing Scope 3 Challenges in Fashion

To effectively tackle the complexities of Scope 3 emissions, the fashion industry needs to adopt tailored strategies that improve data management and decision-making.

Key Areas for Improvement

1. Efficient Data Collection Across Supply Chains

   Brands need to invest in systems that:

   • Engage suppliers at all tiers to provide primary data.
   • Offer standardized reporting templates to ease the data submission process.
2. Robust Product-Level Footprinting Tools
   Developing advanced methodologies that integrate frameworks like Higg FEM into product-level carbon accounting can enable brands to calculate footprints for even the most complex products.
3. Moving Beyond Data Collection to Insight Generation

   Tools powered by AI in fashion can help brands:

   • Analyze Scope 3 data for actionable insights.
   • Benchmark performance and identify hotspots for improvement.
   • Model the impact of strategic interventions, such as material substitution or supply chain optimization.
4. AI Tools in Fashion Sustainability

AI-powered tools have the potential to transform Scope 3 data collection and analysis. By automating data workflows and providing predictive analytics, these tools can help brands:

• • Simplify the process of supplier engagement and data submission.
  • Generate real-time insights into material and production impacts.
  • Optimize supply chain decisions to reduce carbon footprints.

Conclusion: Unlocking the Potential of Scope 3 Data

Addressing Scope 3 emissions is one of the fashion industry’s most pressing challenges, but it also represents a massive opportunity to drive meaningful change. By leveraging innovative technologies, adopting robust methodologies, and fostering collaboration, brands can turn fragmented data into actionable insights.