Credit: Fashion for Good

11 February 2025

WHY DO WE MEASURE IMPACT?

Understanding the significance of measuring impact begins with a simple truth: you can’t control or change what you can’t measure. Data provides the foundation for informed decision-making, enabling not only organisations to identify challenges, set achievable goals, and track progress toward meaningful change, but also consumers to make the right choice and create a positive feedback loop towards brands. Without it, efforts toward sustainability and responsibility often lack direction or effectiveness. 

In this article, we focus on assessing environmental impact, and there are several reasons why impact measurement is important:

• Meeting internationally agreed targets: impact measurement is critical for achieving global sustainability goals, such as the 1.5-degree Celsius target outlined in the Paris Agreement¹. Effective impact measurement allows organisations to quantify their contributions toward this goal by assessing and reducing greenhouse gas emissions across their value chains. 

• Complying with regulations: governments and regulatory bodies are increasingly requiring organisations to report on their non-financial impacts. European frameworks such as the the Corporate Sustainability Reporting Directive (CSRD), and the Sustainable Finance Disclosure Regulation (SFDR) provide guidance on what to measure and disclose. Additionally, the introduction of initiatives like the Digital Product Passport (DPP) further underscores the importance of transparency and disclosing the impact and responsibility of brands along their supply chain.

• Empowering informed decision-making: assessing impact enables organisations to take a proactive approach to sustainable practices by identifying challenges and exploring solutions. It allows them to pinpoint areas of significant negative impact, often referred to as “hotspots”, and devise strategies to reduce and mitigate these issues. They help determine whether to pursue activities or develop products that align with business goals and sustainability objectives, assess cost-benefit scenarios, while addressing customer demands for more responsible products and services, supporting companies to position themselves as attractive prospects for investment.  

Source: Scope 3 Standard

HOW IS IT MEASURED?

Environmental impact can be approached at two levels: on the corporate level and on the product level. 

At the corporate level, impact assessments typically measure Scope 1, 2, and 3 emissions, which provide a clear picture of a company’s overall greenhouse gas (GHG) emissions and enable them to set targets and track progress toward reducing emissions. 

• Scope 1² includes direct emissions from company-owned sources like facilities, fleet vehicles, and equipment, which are produced by the company’s operations.

• Scope 2 covers indirect emissions from purchased energy, such as electricity, steam, or heating. These emissions occur off-site but are attributed to the company based on its energy consumption.

• Scope 3 refers to indirect emissions across the entire value chain, both upstream (e.g., production, transportation, and waste disposal) and downstream (e.g., product use and disposal). Scope 3 often represents the largest share of a company’s carbon footprint, but that share is often outsized in fashion: in many cases, Scope 3 accounts for at least 95% of a fashion company’s total carbon footprint³.

Credit: Fashion for Good

Similarly, Life Cycle Assessment (LCA) calculates the environmental effects of a product’s lifecycle, from resource extraction (the “cradle”) to a defined boundary, such as cradle-to-gate (where the “gate” can represent different production stages depending on the innovation). LCA helps organisations identify environmental hotspots in the production process, enabling them to make informed decisions to enhance their product’s sustainability, such as selecting alternative inputs or improving process efficiency, while ensuring transparency in sustainability claims.

Both LCA and GHG accounting are crucial tools in ESG (Environmental, Social, and Governance) reporting, which is increasingly vital for companies to disclose their sustainability performance. Both of these approaches enable compliance with evolving regulations and frameworks such as the Corporate Sustainability Reporting Directive (CSRD), the Science Based Targets initiative (SBTi) and the CDP, while providing transparent, verifiable data that aligns with regulatory requirements and sustainability goals.

By integrating corporate-level assessments, with product-level evaluations, companies can capture the full scope of their environmental footprint. This holistic approach not only helps mitigate environmental impacts but also uncovers opportunities to drive meaningful, lasting improvements across their operations and the products they bring to market. 

MEASURING IMPACT BRINGS OPPORTUNITIES… AND CHALLENGES

Lack of universal standards: while industry standards provide guidance, LCA practitioners still have discretion in selecting methodologies, system boundaries, benchmark and impact assessment approaches. This flexibility can make it difficult to establish a standardised method for calculating impact even within the same business categories, and it undermines the ability to make fair, apples-to-apples comparisons between different LCA studies. In this regard, the European Union’s upcoming Product Environmental Footprint (PEF) methodology intends to mitigate these challenges by providing a standardised Life Cycle Assessment (LCA) approach.

Limited data availability for nascent technologies: innovators often struggle to collect reliable primary data for their technologies, making it challenging to represent their impact accurately. Besides, modelling this impact at scale relies on assumptions, which are inherently uncertain and can lead to reduced accuracy of their prospective LCAs.

Resource intensity: conducting thorough impact assessments requires significant time and financial resources. Depending on an organisation’s needs, options range from in-house calculations (e.g., Excel-based methods), LCA consultancies, to automated/semi-automated platforms aimed at measuring an organisation or product impact (with promising innovations already available, such as Fashion for Good alumni, Vaayu and Made2Flow). 

Expertise gaps: specialised knowledge is required to interpret results and integrate findings into actionable strategies. Smaller organisations may lack access to such expertise, making it challenging to conduct robust impact assessments. With its unique perspective within the fashion ecosystem, Fashion for Good is well-positioned to bridge the gap between innovation and implementation, as we validate technologies based on their performance, scalability, and price, with the potential to lower environmental impact against conventional baselines. By providing comparative screening LCAs, cradle-to-gate assessment of innovations, and a wide set of impact categories considered (such as Global Warming Potential, Eutrophication Potential, Blue Water Consumption, Ecotoxicity, Acidification, Land Use), we aim to provide innovators with the tools they need to understand, control and mitigate their impact.

WHAT CAN CONSUMERS DO AT THE INDIVIDUAL LEVEL 

As a conscious consumer, your choices have the power to drive change across the industry. But with brands touting their sustainability credentials, telling apart what a real commitment is and what greenwashing is can be hard. The key lies in digging a bit deeper, and here are a few easy ways you can cut through the noise and support genuine efforts: 

• Read and understand the brand’s sustainability commitments and environmental impact claims (such as carbon footprint, water usage, or waste generation). Check if these claims are backed by credible LCA studies or certifications. 

• Monitor brands’ sustainability progress throughout the year by checking any updates or reports related to their environmental performance (e.g., through annual sustainability reports or product updates).

¹United Nations Framework Convention on Climate Change. The Paris Agreement. Available here.
²McKinsey & Company. What are Scope 1, 2, and 3 emissions?. Available here.
³The Economic Times. Why it’s so hard to track the fashion industry’s emissions. Available here.