As the Corporate Sustainability Reporting Directive (CSRD) begins to affect businesses operating in the European Union, our team is developing a series of resources to aid apparel and consumer goods brands in preparing for this rigorous regulation. As part of our ongoing commitment to support our customers in navigating compliance, this article tackles reporting requirements related to scope 3 value chain emissions. 

Why is Scope 3 important?

For apparel and footwear brands, the significance of value chain emissions cannot be overstated. Scope 3 value chain emissions constitute a substantial percentage, often 80% or more, of an apparel brand’s overall impacts. Whereas many businesses report solely on Scope 1 or 2 emissions today, CSRD mandates accounting for these full value chain emissions within the climate change topical standard. While sector averages may be permissible in initial reporting years, CSRD sets a clear trajectory towards the transition to primary data, which is particularly crucial for accurately tracking progress in achieving emissions reduction targets.

How can Worldly support?

The Higg Index can help your business account for these impacts. Multiple tools within the Higg Index suite support scope 3 disclosures under CSRD. 

Across multiple product inputs, the Higg Materials Sustainability Index (MSI) and Higg Product Module (PM) provide industry-average and supplier-submitted, third-party reviewed impact data, which is modeled using robust and publicly available life cycle analysis (LCA) methodologies. The outputs of these tools include material and product-specific greenhouse gas (GHG) emissions profiles that companies can use as inputs for their Scope 3 target-setting. 

Complementing the Higg MSI and PM, the Higg Facility Environmental Module (FEM) offers emissions data at a manufacturer-level. There is a public methodology from Fashion for Climate and the Sustainable Apparel Coalition that defines how Tier 1–3 primary data from Higg FEM can be used to replace process-level industry-average data (e.g. from the Higg MSI). This incorporation of primary data can increase the accuracy of their Scope 3 value chain emissions calculations. 

How should you get started?

To prepare for the Scope 3 emissions reporting requirements of CSRD, brands should begin gathering impact data from their facility partners. Within Worldly, brands can use the facility adoption tool to identify which portions of their supply chain are already reporting GHG emissions via the Higg FEM. Even better, this same tool can be used to request data from factories that are not yet reporting on emissions. 

The data these facilities share can be incorporated to improve accuracy of Scope 3 calculations. 

We’re here to help.

For a comprehensive exploration of the technical requirements involved in climate change disclosure under CSRD, our customer success team has developed a full technical white paper. 

Get in touch today to learn more about leveraging the Higg Index to enhance the accuracy of your scope 3 reporting.