french startup Carbonfacto believes the best carbon accounting solutions will focus on one vertical. Therefore, the company has decided to provide a carbon management and reporting tool exclusively for the fashion industry.
And Carbonfact recently raised a $15 million funding round led by alventhe French venture capital firm that already led Carbonfact’s seed round in 2022. Other investors in the round include Headline and a follow-on investment from Y Combinator.
Large companies in the fashion industry (and other industries) need to come up with a carbon accounting strategy as regulation is changing in Europe and the US with the EU’s Corporate Sustainability Reporting Directive (CSRD). , the California Climate Corporate Data Accountability Act and the New York Fashion Law. Act.
That’s why there has been a boom in carbon accounting platforms. The biggest ones like Basin, Persephone, Sweep either Greenly have an industry-independent approach. They help you track your carbon emissions and create reports in a more or less automated way.
Like carbon maps Carbonfact focuses exclusively on the food industry, while Carbonfact focuses on the fashion industry so that their product can be more granular and more specific.
“For these industries (food is a very good example, fashion is a very good example), you need to be precise in your calculations and industry-specific tools to model virtual products and improve your product offering in the future,” Carbonfact said. -founder and CEO Marc Laurent told me.
Carbon data at product level
In more practical details, Carbonfact recovers your existing data from your ERP and other internal systems. It then calculates each product’s footprints using a life cycle assessment engine designed specifically for apparel.
“[Clients] They also have data in what they call PLM. [Product Lifecycle Management software ] —That is the software in which they place all the product data. Here you will find the recipe sheets for the products. And sometimes they have data on traceability platforms, such as Retraced, Trustrace, Fairly Made in France, etc. And finally, sometimes they have data in Excel files,” Laurent said.
After centralizing and normalizing all the data on a single platform, since the fashion industry depends on a cascade of suppliers, Carbonfact wants to help you calculate your scope 1, 2 and 3 emissions; Scope 3 emissions in particular include indirect emissions from third-party suppliers. .
Going live first gives you a broad idea of your main emission hotspots with a range of uncertainty. It then helps you prioritize data collection with your suppliers to refine your data and improve your carbon reporting.
After that, Carbonfact can become your carbon footprint dashboard. You can generate broad reports and drill down to the SKU-based level to see the environmental cost of each product. The platform can then be used to run what-if scenarios to see if you should change a material, move to a new manufacturing country, or change your transportation methods.
Image credits: Carbonfacto
While many companies will focus on CO2 equivalent metrics first, Carbonfact can also be used to track other metrics, such as water consumption, French eco-labels, and other environmental indicators; In the carbon accounting industry, they call these indicators the Product Environmental Footprint. Category Rules, or PEFCR for short.
And Carbonfact has already onboarded more than 150 clothing and footwear brands, including New Balance, Columbia, Carhartt and Allbirds. “We monitor 100% of its subsidiaries, 100% of its suppliers, 100% of its products,” said Laurent.
Each customer pays tens of thousands of dollars a year to use Carbonfact. With a little rough calculation, if we consider that a client pays around $20,000 per year on average, it means that the French startup already generates at least $3 million in annual recurring revenue.
It is clear that sustainability management software is a growing segment in the world of enterprise software. But it is also a young sector. Therefore, it will be interesting to see if various industry-specific platforms can become large companies or if there will be some consolidation in the future.