Despite swelling regulatory pressures, the fashion sector’s emissions continue to climb.
Carbonfact, a carbon management software built for the apparel and footwear industry, believes it can help brands overcome this issue by offering them tools to measure, reduce and disclose their products’ emissions in accordance with upcoming regulations like the New York Fashion Act, the SEC Climate Disclosure Rule and the EU’s Corporate Sustainability Reporting Directive (CSRD).
Related Stories
“After meeting with hundreds of textile brands and suppliers, we realized that collecting data and reporting on all product and supply-chain information is a complex task that requires more comprehensive data management than spreadsheets allow,” Marc Laurent, Carbonfact’s co-founder and CEO, said. “We believe that fashion brands should be able to measure and report on climate progress with limited manual work.”
In the 18 months since its seed funding, Carbonfact has onboarded more than 150 customers, including brands like Armedangels, New Balance and Carhartt—perhaps a direct result of the increasing regulatory pressure on the sector to measure and disclose emissions.
Now, Carbonfact announced it has raised $15 million in a Series A funding round. European venture capital firm Alven led the round (as well as Carbonfact’s seed round in mid-2022) and was joined by global venture capital firm Headline, who is also joining the board. The round also saw a follow-on investment from Y Combinator, a technology startup accelerator whose 2021 batch the company was a part of.
“The fashion industry…emits some of the highest amounts of emissions for each dollar spent. Carbonfact is the only platform that offers a product deep enough to satisfy today’s increasingly complex supply chains,” Jonathan Userovici, general partner at Headline, said. “Carbonfact’s customers were the first ones to tell us about the incredible value the platform provides; some of them were even able to access more attractive lending rates and sustainability incentives by being able to show real sustainability efforts.”
Carbonfact said its priorities over the next year will be focused on helping retailers and manufacturers measure and build plans to reduce their emissions, as necessitated by pending parameters, and growing global onboarding teams. The Paris-based firm also recently launched a suite of modeling tools, allowing brands to understand how product design or supplier selection changes can impact carbon footprints before products are made.
Here’s how it works: a brand’s existing data is added into the Carbonfact platform. That data can come from any source in any format. To minimize the brand’s workload, Carbonfact builds a custom connector to that brand’s existing systems. The company then cleans and analyzes that data, identifying gaps and anomalies using advanced machine learning. Its algorithm matches each product to a supply chain blueprint, allowing Carbonfact to perform “immediate footprint calculations” on a SKU level, even if the data is incomplete.
Once that data is processed, the brand can explore the footprint of each step in its product’s lifecycle to identify “hotspots” and target decarbonization efforts directly at the source of impact. Users can toggle between different methodologies (like the French eco score and the European PEF score). Carbonfact also automates a brand’s corporate carbon accounting for Scope 1, 2 and 3 emissions, calculated without spend-based data. The platform then automatically formats that data for annual carbon reporting objectives, aligning with multiple frameworks to ensure compliance with new regulations.
“Carbonfact’s product-level focus ensures we can both measure our carbon footprint and actively find ways to reduce it,” said Aileen Lerch, director of sustainability at Allbirds, one of Carbonfact’s first customers. “Carbonfact has been instrumental in helping us model different scenarios and make informed decisions that align with our sustainability goals.”
Users can “dive deep” into their data through the Trends dashboard to pinpoint what’s impacting increases or decreases in their footprint. Powered by live data from a brand’s purchase orders, Carbonfact can predict year-end footprints and suggest where a brand stands on a 2050 net-zero path. “What if” tools allow users to run scenarios to build out concrete decarbonization plans as well.
“If you take all of the mandatory reporting into account, at the end of the day, each brand will have to report on five different frameworks to be compliant,” Laurent said. “It’s super complicated, but nothing that the software cannot do.”
