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Offsetting or reducing: What is climate neutrality and how to achieve it?

By Regina Henkel

Nov 9, 2021

Business |Interview

Photo: Markus Spiske / Pexels

Zurich-based MyClimate is a non-profit foundation that was founded in 2006 to support companies on their way to carbon neutrality. MyClimate calculates the CO2 emissions of companies and their products in order to show measures for CO2 reduction on this basis or to offer possibilities for offsetting them. But what exactly does that mean? We asked Kai Landwehr, spokesman and marketing director of MyClimate, what contribution the fashion industry can make to climate protection, how far the industry has come, what challenges it faces and the dangers of greenwashing.

Mr. Landwehr, how large is the carbon footprint of the fashion industry?

Kai Landwehr: Globally, the fashion industry is a huge emitter of CO2, much larger than air travel, for example. Current figures indicate that about ten percent of global CO2 emissions are attributable to the textile industry. The production of cotton and wool, far-reaching supply chains, all this is globally very energy-intensive. In addition, there is a short half-life. Fast fashion has an incredibly large footprint.

MyClimate helps companies reduce their footprint. How does this cooperation work?

The cooperation basically always follows the same pattern: We start with an as-is analysis and calculate the corporate carbon footprint on this basis. It is also possible to look only at the footprint of one collection or even of the individual product. So at the beginning, there is always the analysis and the determination of a data set that breaks down how many emissions are produced and where. All measures to reduce or compensate CO2 emissions are then based on this data. This means that it always starts with the calculation of CO2 emissions and then goes on to determine the savings potential.

For those who want to compensate, we offer a compensation portfolio of 145 climate protection projects in 40 countries. Companies can support projects as a whole or just individual ones - for example, if someone produces in India, they can also select climate protection projects there if they wish.

More and more companies are launching climate-neutral products and adverte them as particularly sustainable - for example, the first climate-neutral sneaker from Aldi. However, it was revealed that only a compensation was made; the CO2 emissions of the product were not reduced at all. Isn't there a great danger of greenwashing?

Of course there is a danger of that. But the fact is: One can't make a product without CO2 emissions. Of course, one has to try to optimise the processes and bring the emissions to the lowest possible level. That is also an option. But these are rather long-term measures. As a rule, it takes time before large savings can actually be made. But if you look at the overall climate situation, it makes perfect sense to compensate. Offsetting is an immediate measure that has an immediate effect and is combined with the goal that one has to offset less year-after-year because one is also working on reducing emissions. If in ten years we are still compensating and not reducing, then we have a problem.

Kai Landwehr, MyClimate

So compensation serves its purpose, even if wagging tongues call it a kind of indulgence payment?

Absolutely, but there is actually no company that only compensates and does not also want to reduce. Sooner or later they will have to do that anyway. Basically, I would also say that greenwashing is quickly decoded by society today. Companies that keep putting products on the market at a high speed that nobody needs are not perceived as credible. But it must also be said that we now have a problem with the fact that companies that do something for climate protection, of all things, are now very quickly confronted with the accusation of greenwashing. Many measures simply take time, and it is good if companies start to become active.

How do you calculate CO2 emissions in the global supply chain - where does the data come from and is it already available to a sufficient extent?

There are standardised methodologies for this. It always depends on the degree of complexity and the extent to which one wants to carry out the calculations - from Scope 1 to Scope 3, from direct to indirect emissions. For clothing, too, there are established methodologies on how to calculate this. Of course, the quality of the calculation depends on the quality of the data and how it is obtained. If a company wants to carry the label ‘climate neutral’, the conditions for this are very precisely defined. If one wants to get just a rough estimate, one does not need to go quite so in-depth.

Fashion companies in particular have a reputation for not knowing their supply chain very well. What to do in that case?

Of course, it always depends on how well you know your supply chain! But fortunately, a lot has changed in the fashion industry in the last five to six years. And of course, the complexity of the supply chain makes reduction processes quite difficult.

What stage have fashion companies reached right now? Have they recognised the need for action?

Things are moving forward, many have woken up in the meantime. Some, such as Vaude or Patagonia, have been dealing with the topic for years, others are starting now because they know that the topic of climate protection can no longer be ignored. It's not just about protecting the climate or meeting customers' expectations. Politicians and investors are now also demanding it. The pressure is now coming from many sides.

Let's take a look at the legislation: What new regulations on climate protection are companies facing now or will they soon be facing?

Many countries already have mandatory CO2 pricing, in Sweden and Scandinavia for quite a long time. In Switzerland, mandatory C02 reporting applies from now on. A lot is also happening at EU level. This has been our mantra in client meetings all these years: Legislation will demand these measures sooner or later anyway. This is now becoming more concrete.

What kind of investments does one have to expect, for example, as a fashion brand with headquarters in Germany and production in the Far East?

If I only look at the operations here, their share of C02 emissions is maybe 10 to 15 percent. It gets exciting when you break down the calculations to product level. To offset a cotton t-shirt in a climate-neutral way is a matter of cents. A down jacket might cost one or two euros if I want to label the product climate-neutral.

Can you give examples of climate-neutral products or collections?

Eterna, for example. Their shirts are climate neutral. At Vaude, too, production at the Tettnang site has been climate-neutral for many years.

You said that reductions take time. Are there measures that can be implemented quickly and that have a more immediate effect?

When it comes to employee and business mobility, companies can save quickly, for example by avoiding air travel for journeys of less than 600 kilometres, switching to smaller vehicles, promoting public transport tickets - all of which can be done quickly. Switching energy to green electricity is also relatively easy. You can achieve quite a lot at the beginning and also involve employees very well. Changing the processes in the supply chain is of course more difficult, but there, too, you can pay attention to less resource consumption, less water, fewer chemicals, solar power, up to how many collections one offers per year, in what rhythm they are delivered and the logistics to organise that. Fast-fashion suppliers will therefore have difficulties with the goal of being climate friendly per se. But here, too, they can pursue circular models, use recycled fibres and offer repair services, anything that extends the product’s life cycle. This also has a big impact on emissions.

Repair services or rental models can also be included and calculated in the as-is analysis?

Yes, it is possible, and I am sure that companies that already offer such models include the resulting CO2 savings in their calculations. It is not only logical that these services are a climate-friendly measure, they are also quantifiable.

How can one recognise serious climate protection projects? What certificates do you work with?

There are different project standards. For example, we use the Gold Standard. There are also registers in which the annual savings are documented. But there are many other standards, e.g. the Verified Carbon Standard or Plan Vivo, which we use for reforestation projects.

All the different standards, some of which are also quite unknown, do not make it easy to assess the label ‘climate neutral’ correctly. Are there efforts to standardise more?

More standardisation would be nice and will happen under the Paris Climate Agreement.

What challenges do you currently see for the fashion industry if it wants to become climate neutral?

The way the fashion industry usually works, it is actually difficult to fulfil climate neutrality. The raw materials, the number of collections, the complex supply chains - there are many challenges. On the materials level, a lot has already happened with recycled raw materials, and there is also a lot of potential in the circular economy. In the next few years, this can be a big contribution to the solution. But the fundamental understanding of trends, fast cycles, seasonality and short-lived ness is going in the wrong direction. The concept of fast fashion in particular is difficult to reconcile with the goal of climate neutrality.

This article was originally published on FashionUnited.de. Edited and translated by Simone Preuss.