Climate change is one of the most pressing challenges facing our world today, and businesses across all industries are being called upon to do their part in reducing greenhouse gas (GHG) emissions. In the fashion industry, Scope 2 emissions play a significant role in contributing to the industry's carbon footprint. The energy used to power the fashion industry's factories, offices, and retail stores is responsible for an estimated 60% of the industry's total carbon footprint (Fashion for Good). In this blog, we'll take a closer look at Scope 2 emissions, their presence in the fashion industry, the challenges, and the reduction strategies associated with them.

What are Scope 2 Emissions?

Scope 2 emissions refer to indirect GHG emissions resulting from the consumption of purchased electricity, heat, or steam. These emissions are called "indirect" because they are not generated directly by the organization, but rather are a consequence of the organization's activities. For example, a fashion brand might use electricity generated from a coal-fired power plant to power their factories, resulting in Scope 2 emissions.

The Scope 2 emissions of a company are measured using a carbon accounting methodology called the GHG Protocol. This methodology requires companies to report their Scope 2 emissions in metric tons of CO2 equivalent (CO2e), which is a standardized unit used to measure the carbon footprint of activities.

Scope 2 Emissions in the Fashion Industry

The fashion industry is one of the most polluting industries in the world, responsible for an estimated 6-10% of global GHG emissions. While much of the focus on reducing the industry's carbon footprint has been on the direct emissions from manufacturing and production processes (Scope 1 emissions), Scope 2 emissions also play a significant role in contributing to the industry's overall carbon footprint.

According to a report by the Carbon Trust, Scope 2 emissions account for an average of 24% of a fashion brand's total emissions. This is largely due to the fact that the fashion industry is highly reliant on electricity, with factories, offices, and retail stores all consuming significant amounts of energy.

The report also found that the majority of fashion brands source their electricity from the grid, which is often generated from fossil fuels such as coal and natural gas. This means that the Scope 2 emissions of the fashion industry are largely driven by the energy mix of the electricity grid in the regions where they operate.

Measuring Scope 2 Emissions in Fashion

Regardless of where a fashion company sits in the value chain, scope 2 emissions are the emissions generated by purchased electricity, heat, steam, and cooling - typically from a utility. The relative magnitude of scope 2 emissions varies depending on where a company is in the value chain; for example, scope 2 emissions are relatively small for a brand compared to scope 3, but for an apparel cut and sew facility (tier 1) or yarn spinning facility (tier 3), scope 2 emissions can be the majority.

Steps to measure Scope 2 emissions  in the fashion sector are:

1. Define the Scope: Applies to both fashion brands and manufacturers, electricity for heating, lighting, or cooling in retail, offices, or warehouses owned or operated directly by the company; District heating or cooling used in owned or operated facilities; Purchased and consumed steam.

2. Collection of data: measuring Scope 2 emissions, a corporation must be aware of the quantity of electricity, heat, steam, and cooling it has acquired. Companies can access electricity, heat, steam, and cooling consumption data from their utilities via invoices. Companies need to also acquire regional emissions factors from sources like eGRID (US) and DEFRA (UK) as well as country-level emissions electricity factors from the IEA.

3. Implementation of data: Companies should then apply relevant GHG emissions factors from the electricity grid where each facility is located grid to their inventories when the factors are released.

To illustrate, if a facility based in Berlin (Germany) purchases 100 MWh of electricity each month, the emissions would be 

100 MWh x 200 kg CO2e per MWh = 20,000 kg CO2e.

 *Keep in mind that this example is for a single facility in a single area, therefore a business would need to combine other facilities and perform comparable calculations to get its overall footprint.

The above measurement is based on the location-based approach. But if a business purchases renewable energy, such as through Power Purchase Agreements or unbundled Renewable Energy Certificates, it will also create an inventory using the market-based approach, taking into account the various renewable energy sources. The market-based method reflects the GHG emissions associated with the choices a fashion brand makes regarding its electricity supplier or product.

Reducing Scope 2 Emissions in the Fashion Industry

Reducing Scope 2 emissions in the fashion industry requires a multi-faceted approach. One of the most effective ways to reduce Scope 2 emissions is to switch to renewable energy sources such as solar and wind power. This can be achieved by investing in on-site renewable energy systems or by purchasing renewable energy certificates (RECs) from third-party providers.

In addition to switching to renewable energy sources, fashion brands can also reduce their energy consumption by implementing energy-efficient practices such as upgrading lighting systems, improving insulation, and using energy-efficient equipment.

Collaboration across the industry is also crucial for reducing Scope 2 emissions. For example, in 2020, a group of leading fashion brands, including H&M, Levi's, and Adidas, launched the Renewable Energy Buyers Alliance (REBA) to increase access to renewable energy for the fashion industry. By pooling their purchasing power, these brands aim to accelerate the transition to renewable energy sources and drive down the cost of renewable energy procurement.

Furthermore, consumers also play a role in reducing Scope 2 emissions in the fashion industry. By choosing to buy from brands that prioritize sustainability and renewable energy, consumers can signal their demand for more sustainable practices in the industry. This, in turn, can incentivize brands to invest in renewable energy and other sustainable practices to meet the demands of their customers.

Conclusion

In conclusion, Scope 2 emissions play a significant role in contributing to the fashion industry's carbon footprint. The industry is highly reliant on electricity, and the majority of brands source their electricity from the grid, which is often generated from fossil fuels. To reduce Scope 2 emissions, fashion brands need to switch to renewable energy sources, implement energy-efficient practices, and collaborate across the industry to increase access to renewable energy. Consumers also play a role in driving demand for more sustainable practices in the industry. By taking action to reduce Scope 2 emissions, the fashion industry can help to mitigate the impacts of climate change and move towards a more sustainable future.