“If I were a big brand I would focus [my impact efforts] on Tier 4 (fibres), textile finishing, and logistics [where] there is a blind spot for brands [because] the new [LCA] scope will be cradle-to-grave.”
With integrated manufacturing from yarn to finished garment, Impetus Group spans Tier 1 and 2 of the supply chain, working with direct spinning partners in Tier 3. Tércio Pinto, Head of Innovation, explains how brands’ requirements are shifting:
“Most brands started looking at the matter [of impact data] last year… the previous actions were focused on document flow, such as certifications and test results, not really data.”
Now that brands are preparing for the next era of increased regulation, they are asking for data proactively:
“Each brand has a specific purpose [regarding data requests] – for example, some are focused more on water than energy mix – each has their own playbook which they will follow that will be better focused in some areas than others, until they really control their supply chains.”
This is starting to materialize through additional upfront questions:
“Some brands have started to say they need to have specific data before they put in the purchase order, which could include ZDHC certifications, the energy mix, water use, and sometimes the LCA (lifecycle analysis); but for the moment I am not having a big demand for this.”
“Most are still asking for answers to questions in Higg FLM and FEM, not actual data. There is still no one asking for dye house calculations or comparison of impact between different dyeing processes, for example.”
To Pinto’s mind, answering questions and providing documents is more an exercise of supply chain organization and an essential first step for compliance; gathering meaningful data is another approach and most brands aren’t there yet. Rather than reacting to brands’ requests, he says Impetus started primary impact data collection because of their own brands and the mentality of the company founders.
Currently, the group provides data at the request of brands in multiple ways: directly into the wide range of industry documentation, traceability and impact assessment software platforms, as well as manually in Excel spreadsheets.
“Data collection and management is across the back office and commercial teams, and we have a certifications and data measurement person, and sometimes a production planning person is involved, too – the function is spread.”
But since the factory processes are heavily digitalized, automated data capture reduces the manual work, and presents an opportunity via intermediary software to automate data transfer and uploads:
“We are investing in a solution to integrate it all and distribute the data to the platforms according to what’s required by brands.”
In terms of managing the relationship with brands, this is also changing:
“Brands are getting more organized – the people asking for data are more knowledgeable, and when they ask us for something they communicate with one of only two people [within Impetus] and we say what we can and can’t do…”
“There is a direct communication between them and a discussion to make sure the needs are clear, and they are speaking the same language.”
Data Strategies and Blind Spots
With rapidly shifting regulations and a lack of clarity if and when they will become mandatory, Pinto suggests a targeted approach to data priorities:
“If I were a big brand I would focus on the Tier 4 (fibres), textile finishing, and logistics and transport...”
Logistics and transport? These ordinarily represent minority impact; but this is about to change – drastically:
Today the majority of LCAs are cradle-to-gate, so there is a blind spot for brands in logistics impacts after that – the new scope will be cradle-to-grave.”
Pinto refers to the recently approved EU Product Environmental Footprint (PEF) tool for calculating product lifecycle impacts from cradle to grave. The tool is expected to be named for complying with various regulations including CSRD, ESPR (and DPP), and Green Claims.
With the incorporation of logistics to and from the warehouse, retail outlets and online sales and returns, the influence of logistics on total product impacts will surge.
“If I were a brand I wouldn’t worry about the data coming from a spinning mill for example, or the knitter or CMT (cut make trim) garment factory [by comparison].”
Data Hotspots
Through recent data collection efforts to conduct LCAs using standard ISO methodology and the new PEF tool for textiles and footwear, Impetus Group has observed key hotspots:
“The processes in the finishing mill influence the LCA impacts at least as much as the fibre does, and if it’s a recycled fibre the difference [in favour of the fibre] is huge.”
This means that low impact dyeing and finishing solutions will be a critical lever for lowering overall product impacts, and is driving investment choices:
“The major investments of major brands are related to water use and materials, which is a good thing, [not least because] the cost of water is increasing.”
Regulatory Pressures
Although brands are not yet requesting data that compares different dyeing and finishing processes, Pinto thinks this will come:
“Based on the regulations and approval of the PEF, I think the data priorities will change, for example to comply with Green Claims…”
“The Green Claims directive made a lot of customers reduce claims they weren’t sure of… nobody wants to claim anything they can’t verify.”
But despite this example, along with ESPR and corporate responsibility in the supply chain, there isn’t clarity on what will be required:
“All the other [regulations and legislation] are still changing and the industry can’t follow the same path because they don’t know how, the investment that’s needed, and they’re worried it might all go away.”
No company wants to invest in complying with a requirement that is not yet specified. But with what is clear so far, selected investments (helped by data analysis across the supply chain to determine the reduction in resource use and return on investment) are possible. Others are more about taking a position on what constitutes best practice and leadership.
Regulations and Investment
In view of Digital Product Passports and widened cradle-to-grave scope:
“We are going to make a huge investment in an automatic warehouse to permit us to distribute to customers to any part [of their business] directly, allowing them to reduce emissions in logistics.”
They are also responding to the call for lot numbers on garments:
“We are keen on tracking a piece to the lot– brands are being advised to put the lot number on the piece, but you have to have full traceability (to the yarn and the lot of fibre that was produced), with the idea of connecting a [given] problem in a piece to a certain production within a supplier...”
How Are Brands Using Data?
Pinto is a supporter of brand data gathering for additional uses, regardless of whether the reasons are known:
“Brands don’t really explain why they want the data, and it [isn’t apparent to us] how they are using it, but I see why they are asking for it – I think they are collecting data to make [strategic] decisions.”
Those decisions might include revising publicly stated targets or materials strategies, he thinks.
Referring to impact assessment and reporting:
“SBTs17 are good baselines to start from and have a strategy – it’s like doing ESG, it’s important to have clear points of information, metrics and principles to follow because it helps us organise the work to be done.”
But there are pitfalls:
“This work is going to create a demand for data… and the lack of harmonisation across countries – and I don’t believe people will follow PEF in a strict way – means we need a taxonomy... beside just the [rule of] law”
From Impetus Group in Tiers 1 and 2, we venture further upstream to a yarn spinning facility in Tier 3, where the data burden is narrower, but no less challenging or resource intensive.
This case study is part of several features of Brands and Supplier data collection case studies found in The Data Advantage Playbook. Get your copy of this and other stories from Primark, Adidas, HUGO BOSS and more.
