French startup Carbonfact believes that the best carbon accounting solutions will focus on a single vertical sector. This is why the company decided to offer a carbon management and reporting tool exclusively intended for the fashion industry.
And Carbonfact recently raised a $15 million seed round led by Alven, the French venture capital firm that previously led Carbonfact’s 2022 funding round. Other investors in the round include Headline and an investment from followed by Y Combinator.
Large companies in fashion (and other sectors) must develop a carbon accounting strategy as regulations evolve in Europe and the United States with the EU Sustainability Reporting Directive (CSRD), the California Climate Corporate Data Accountability Act and NY Fashion. Act.
This is why carbon accounting platforms have seen considerable growth. The biggest ones like Watershed, Persefoni, Sweep or Greenly have an independent approach to the sector. They help you track your carbon emissions and create reports in a more or less automated way.
Just as Carbon Maps focuses exclusively on the food industry, Carbonfact focuses on the fashion industry so its product can be more granular 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 and you need industry-specific tools to model virtual products and improve your offering of products in the future,” Carbonfact co-founder and CEO Marc Laurent told me.
Product-level carbon data
More conveniently, Carbonfact retrieves your existing data from your ERP and other internal systems. It then calculates the footprint of each product using a life cycle assessment engine specifically designed for clothing.
“(Customers) also have data in what they call PLM (Product Lifecycle Management Software), which is the software in which they store all product data. This is where you will find the product recipe sheets. And they sometimes have data in traceability platforms, such as Retraced, Trustrace, Fairly Made in France, etc. And finally, they sometimes have data in Excel files,” explains Laurent.
After centralizing and standardizing all data on a single platform, the fashion industry relying on a cascade of suppliers, Carbonfact wants to help you calculate your scope 1, 2 and 3 emissions – scope 3 emissions in particular includes indirect emissions from third-party suppliers. .
The startup first gives you a general idea of your main emission hotspots with an uncertainty range. It then helps you prioritize data collection from your suppliers to refine your data and improve your carbon reporting.
After that, Carbonfact can become your carbon footprint dashboard. You can generate general reports and drill down by SKU to find out the environmental cost of each product. The platform can then be used to run what-if scenarios to determine whether you need to change a material, move to a new manufacturing country, or change your transportation methods.
Image credits: Carbonfact
While many companies focus first on CO2 equivalent measurements, Carbonfact can also be used to track other metrics, such as water consumption, French ecolabels and other environmental indicators. In the carbon accounting industry, they call these indicators the environmental footprint of the product. Category Rules, or PEFCR for short.
And Carbonfact has already integrated more than 150 clothing 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 customer pays tens of thousands of dollars per year to use Carbonfact. With a little roundabout math, if we consider that a customer pays around $20,000 per year on average, that means the French startup is already generating at least $3 million in annual recurring revenue.
It’s clear that sustainability management software is a growing segment in the world of enterprise software. But it is also a young sector. So it will be interesting to see if several industry platforms can become large companies or if there will be some consolidation in the future.
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