French startup Carbonfact believes that the best carbon accounting solutions are those that focus on one area. Therefore, the company decided to offer its carbon management and reporting tools exclusively to the fashion industry.
And Carbon Fact recently raised $15 million in a round led by Alven, the French venture capital firm that already led Carbon Fact's seed round in 2022. Other investors in this round include follow-on investments from Headline and Y Combinator.
Changing regulations in Europe and the US, such as the EU's Corporate Sustainability Reporting Directive (CSRD), California's Climate Change Corporate Data Responsibility Act, and New York's Fashion Act, are driving the fashion industry (and other industries) forward. Companies need to develop a carbon accounting strategy. Activities.
This is why carbon accounting platforms are booming. Leading companies like Watershed, Persefoni, Sweep, and Greenly are taking an industry-agnostic approach. These help you track your carbon emissions and generate reports in a more or less automated way.
Just like Carbon Maps focuses only on the food industry, Carbonfact focuses on the fashion industry to make products more detailed and specific.
“For these industries, food is a very good example, fashion is a very good example. You need to be precise in your calculations, you need industry-specific tools to model virtual products and improve future product offerings. ” says Carbonfact co. – Founder and CEO Marc Laurent told me:
Product-level carbon data
For more practical details, Carbonfact pulls existing data from your ERP and other internal systems. We then calculate each product's footprint using a lifecycle assessment engine designed specifically for clothing.
“[Clients] There is also data in something called PLM [Product Lifecycle Management software ] — It is the software that puts all the product data. Here is the recipe sheet for the product. Your data may also be stored on traceability platforms such as Retraced, Trustrace, and Fairly Made in France. Finally, the data may be stored in an Excel file,” Laurent said.
The fashion industry relies on a series of suppliers, so after centralizing and normalizing all data into a single platform, CarbonFact wants to help calculate Scope 1, 2 and 3 emissions. Masu. In particular, Scope 3 emissions include indirect emissions from third-party suppliers. .
The startup will first provide a rough idea of the main emission hotspots with a range of uncertainty. This allows us to prioritize data collection with suppliers, refine data, and improve carbon reporting.
Carbonfact then becomes your carbon emissions dashboard. Generate extensive reports and drill down to a SKU-based level to see the environmental costs of each product. You can use this platform to run what-if scenarios and see if you need to change materials, move to a new country of manufacture, or change shipping methods.
Image credit: Carbon Facts
While many companies focus first on CO2-equivalent metrics, Carbonfact can also be used to track other metrics such as water consumption, the French ecolabel, and other environmental indicators. In the carbon accounting industry, these metrics are referred to as product environmental footprints. Category Rules, PFCR for short.
Additionally, CarbonFact already has over 150 apparel and footwear brands including New Balance, Columbia, Carhartt, and Allbirds. “We track 100% of their subsidiaries, 100% of their suppliers, 100% of their products,” Laurent said.
Each client pays tens of thousands of dollars per year to use Carbonfact. To do a little flip-side math, and considering that clients pay on average around $20,000 a year, the French startup is already generating at least $3 million in recurring revenue per year.
It's clear that sustainability management software is a growing area of the enterprise software world. But it's also a young field. So it will be interesting to see if some industry-specific platforms can become big players or if there will be consolidation in the future.