Why phygital services are important for fashion brands.
How primary data affects your environmental impact assessments
When you first approach your corporate environmental impact measurements for your sustainability strategy, your first thought might be to obtain data from secondary sources.
Existing data from external institutions is readily available and requires little effort to find. But while secondary data collection takes less effort at the beginning of the process, it has important limitations.
You’re much better off collecting your own primary data from your current suppliers (or enlisting the help of a trusted third-party auditor.) Primary data will correctly inform your environmental impact assessment and give you a solid foundation to implement a sound environmental sustainability strategy.
Secondary data should only be used when there is absolutely no chance of obtaining primary data or as an early solution to build your primary data collection prioritization plan.
While the process of setting up an effective primary data collection procedure will require an investment in terms of money and time, the long-term benefits of having access to these data will quickly pay back the investment.
This is because commercially available databases often rely on outdated data, collected from a small selection of factories and in a period of time not so close. Moreover, commercial databases have a limited capacity to update their data.
On one hand, some of them rely on voluntary submission of these data, and others on the consulting services they perform. On the other hand, most of these database providers aren’t focused on a single industry and many of the industry-specific processes are less likely to be updated.
Switching from secondary to primary data will drastically change your environmental impact measurements and your ability to build a sound impact reduction plan.
That’s because primary data are specific to your supply chain, and give you an accurate picture of where the real hotspots are, which are the most virtuous suppliers, and those who should invest more in sustainable initiatives.
Why is primary data important?
Primary data is gathered for a specific purpose. When you are creating an environmental management strategy, you establish requirements and goals in accordance with your business plan and local regulations.
In this case, the primary data gathered from suppliers informs these goals by giving you a clear picture of the current situation so you know how much it needs to improve.
Secondary data won’t give you an accurate starting point. Not only can the time and situation in which it was gathered vary, but it may be too broad to be relevant to your needs.
For example, if you were to acquire secondary data on factory carbon emissions in the country your main supplier resides in, you would only have a vague estimate of your partner’s true carbon impact at best. At worst, you could take your environmental management strategy in the wrong direction.
Having a system in place to regularly collect primary data will provide you with a continuously up-to-date understanding of your supply chain impact.
If you’re using secondary data, there’s no telling when and how it was collected and there is a high chance that the changes in your inventory will only be driven by changes in production volumes and material category shift (i.e. natural to synthetic or vice versa).
You can’t be sure the numbers are applicable to your current situation and strategy when the data was gathered for another purpose. This means you can’t make accurate critical decisions for your design, purchasing, and even public relations procedures.
Additionally, without primary data, you won’t be able to track the progress of your supplier's performance. Collecting data directly from suppliers is necessary to track emissions and set credible reduction goals to further your sustainability strategy.
You also won’t be able to gather key information on the state of each supplier facility, which will leave you without insight into the emissions coming from your supply chain.
How to switch to primary data
Step 1 - Prioritization
The first step to collecting primary data is prioritization. You can use your secondary data to conduct a full initial assessment at the company or product level. This will help you identify the materials, processes, and suppliers that your specific brand should focus on in the collection of primary data.
The approach towards prioritization could be volume-based, i.e. selecting a supplier from which you buy large volumes of materials, or process impact-based, i.e. selecting those suppliers performing the 2 or 3 most impactful processes.
Another prioritization option, the easiest one, is to collect data from the most engaged suppliers. While it’s definitely a good choice in terms of minimizing the engagement effort, very often the most engaged suppliers are the manufacturers, which have the lowest impact across the supply chain.
Step 2 - Suppliers Engagement
The next step is engagement. For many brands, this is the most challenging part, because the majority of companies within the supply chain are reluctant to share their data.
This may be because a supplier doesn’t have full visibility on key data, finds it too time-consuming to collect and share it, or they are obscuring it because they have something to hide.
Some companies leverage certifications to demonstrate good practices, but environmental claims need to be verifiable to truly be transparent.
To solve this issue there are two elements to work on: One is systemic. Brands should harmonize their data collection request, at least when it comes to environmental data.
The second is about tools & training. Excel or forms are the most used tools to collect data from suppliers. However, it takes ages to fill these files and most of the time they get easily lost in the darkness of folders stored somewhere in a laptop or in the cloud.
Equipping suppliers with user-friendly tools where they can actually input the data, knowing that they will be able to use them for all brands asking for data will definitely reduce the friction in having access to data. Effective training will be required in the early days to win the natural human resistance to change.
Step 3 - Data collection
Once you have successfully engaged with your suppliers, the next step is to collect and manage the data. The is a number of variables that have an impact on the data collection. For example, the processes performed by the company, the granularity of the data available, the technologies used for energy generation, the presence of wastewater treatment, and the chemical products used.
A practice that we see frequently adopted, is to focus only on easy-to-collect data like electricity and gas consumption. However, if you are collecting data from a dyehouse or a finishing factory, you may be missing up to 50% of the impact coming from chemicals and wastewater. Areas in which, commercial databases have huge data gaps and inaccuracies.
Another element that we see often neglected in the data collection is the info needed to calculate supplier-specific emission factors such as emission testing for energy-generating technologies and sludge/wastewater testing for water treatment plants.
Step 4 - Data Allocation
Once the collection is successfully achieved, the next step is the allocation. For a good allocation, you need to have visibility on info like production volumes and the process involved in the making of the specific material, to name a couple.
The more vertically integrated is the suppliers, meaning that they do multiple processes even within a single facility, the higher is the risk of coming up with data that can potentially be less accurate than properly modeled secondary data.
Availability and granularity of data can have a great impact on the ability to properly allocate data. If a vertically integrated textile factory is only able to provide company-level data, it will be almost impossible to differentiate the impact between a dyed cotton fabric and one that is bleached to be dyed as a garment.
More are more we see a variety of tools claiming to be collecting primary data. Too frequently, though, these tools have a superficial approach to collecting these data and only focus of providing forms to input the data leaving the burden of modelling them to the company itself.
Step 5 - Integrating primary data into product and company measurements
The next step is to utilize the primary data you’ve collected. Once your brand has the data, you will need to properly insert them in the impact assessment calculation you want to perform at the company or product level.
While this is not particularly complicated, it takes a lot of time and attention to detail to make sure you don’t expose your brand to calculation errors.
One step that we skipped, as it will require a dedicated discussion, is the verification of data. Lack of transparency across the supply chain makes brands fear that the data they receive is not trustworthy and needs to be verified.
As of today, this happens through on-site verification of bills and other documentation, often being performed during company audits (as it happens for example with the Higg FEM).
While it’s definitely key to be able to verify the credibility of data, we think that when it comes to quantitative environmental data, technology can do most of the job if these tools are properly designed.
How technology can optimize your primary data
Primary data is key to effectively performing environmental impact assessments. You will be able to plan and strategize much better with technology solutions backed by up-to-date, high-quality data insights.
We are witnessing a growing momentum that is pushing data under the spotlight as the key enabler of the sustainable transition rather than just a marketing tool. What we need to accomplish is a change of approach towards data ownership and data sharing.
As Mr. Delman Lee, Vice Chair of TAL Apparel, said during the panel Pushing the Data Pace at the GFA Summit, if a supplier has already embarked on its sustainability journey he must have already access to his data.
What is needed is a harmonization of data requests from brands and a data infrastructure that is able to collect and process suppliers' data and make them available to the other stakeholders, being their brands or other suppliers.
That’s exactly the mission we embarked on at Sustainable Brand Platform. We developed a suite of tools to support brands and suppliers in accessing and managing their sustainability performances and a data infrastructure to facilitate the exchange of data across the supply chain.
Thanks to Sustainable Brand Platform’s industrial sustainability intelligence solution, suppliers can take full control over their sustainability performances access granular KPIs, see the impact of the investments made, and leverage on data to effectively engage with their customers.
On the other hand, brands can benefit from an integrated solution that combines product and company-level calculations with a powerful and accurate data collection tool for the supply chain.
Whether you’re a brand or supplier, working with Sustainable Brand Platform is the simplest and most effective way to make sure you get the most out of your primary data.
Ready to start? Book a free demo of our solutions here.