Climate Impact Labels Are Launching in France: Is Your Brand Ready?
Update: February 1, 2023
A Quick Recap:
Starting January 1st, 2023, if a producer, importer, or distributor of waste-generating consumer products –hello fashion industry!– has an annual turnover of more than 50M€ and a volume higher than 25 000 units in France, they will be subject to AGEC. The disclosure requirements of this act are applied based on the number of products sold in the French market. The information must be provided to the consumer at the time of purchase, in a freely accessible digital format that can be reused and aggregated, either on each item's label or uploaded to the product page on the brand's website. And in just two short years, AGEC will hit brands with a turnover of 10M€ and a repertoire of 10 000 units.
The French laws are ambitious but realistic, “We are a global business, so we will apply the strictest regulations across the board anyway, but it would be nice to have this minimum standard expanded to other countries.” Marie-Claire Daveu, Kering’s Chief Sustainability Officer and Head of International Institutional Affairs, said to Vogue Business.
What is Expected
There are a few requirements such as no unsubstantiated green claims, information on waste production (stay tuned for our post on waste metrics), recyclability, and what percentage of recycled material the garment contains. But we will focus on our ‘pain et beurre’ here at Arbor: traceability. Each step in the manufacturing process, from weaving, dyeing, stitching, and finishing, needs to be accounted for, including each country these steps take place.
We spoke to Nina Marenzi, founder of the Future Fabrics Expo, the largest dedicated trade show for sourcing certified, sustainable material solutions. “AGEC advances the circular economy and reduce waste-generating products, including textiles,” says Nina, “We need the regulators to come in and create a level playing field, ideally incentivizing companies to do the right thing, including tax breaks for innovations, next-gen solutions, repairs etc. and those contributing to pollution and waste to be penalized with higher taxes.”
But none of this should come as a surprise for labels, especially in France. AGEC was first announced on February 10th, 2020, and published on April 29th, 2022, with some decrees, such as n° 2022-748, which ban unsubstantiated or vague green claims such as “biodegradable’’.
Regulations are approaching in the EU but have been slow-moving, and the industry needs to catch up regarding data disclosures. With claims that there isn’t data available or a lack of foresight, a lot is still up in the air. A source closely connected to the Ademe, the governing body around the law, told us that currently, in France, the ecological organizations responsible for providing brands with the required recyclability guarantees aren’t quite ready.
The ‘Pain et Beurre’ of the Decree & Arbor
Traceability in a supply chain is like the red string on a crime scene chart, which links all the expectations from AGEC together. Large and small brands can hit their goals with a clear view and record of their supply chain. And Arbor is like the spunky small-town detective that cracks the case; we’ve built transparent supply chain traceability into our methodology and framework from day one.
Here is what sets us apart from other environmental impact tools:
First, it’s product-to-product comparisons. Arbor's engine goes beyond that of most other tools by comparing products to products, not just materials to materials. For example, we would compare a pair of organic cotton jeans to a pair of conventional cotton jeans rather than simply materials to other materials –one of the many factors that got the Higg MSI tool in trouble with the Norwegian Consumer Authorities. This is important not just to AGEC, but to traceability in general. A brand subject to AGEC cannot be expected to accurately quantify the impact of recycled materials in their garments if the metric they are using doesn’t consider the unique attributes of a garment itself.
Country differentiation is an ominously important factor in data-based impact calculations and is often overlooked with most tools on the market. We take into account regional-specific links in the supply chain, such as transportation, energy grids, and tangible “hot spots.” If traceability is the red string in the crime scene chart, transparency is the smoking gun. Without transparent data, it is impossible to create benchmarks for disclosure, devise effective strategies, and take responsibility for enacting meaningful change.
“The main problem with using global average number is that they fail to capture local variations in resource usage and environmental impact. There are significant differences in the way cotton is grown and how much water farmers use, as well as how and if they use these inputs efficiently. For example, climate, rainfall and irrigation technology vary greatly from one farm, country and/or region to another.”
-Norwegian Consumer Authority
At the end of the day, it is not just regulators who are demanding action. Consumers, employees and investors are all sending a clear message to the business world that they want companies to prioritize sustainability. Studies show that consumers are willing to pay up to 25% more for sustainable products, and brands that jump to greener goods see an average 15% increase in their annual repurchase rates.
But you’ve got to mean it. “Policy is one of the only ways we can impact the behaviours of the fashion industry and meet the urgency of the issues,” says Michelle Gabriel, Graduate Program Director of Sustainable Fashion at the Glasgow Caledonian New York College, “Yet, without reliable data, newly developed policy risks being wholly ineffective, offering misguided interventions and missing more impactful opportunities for positive change.”
No other impact calculators on the market offer the scope of coverage to hit regulations like Arbor. Our data pipeline acts across supply chains, making it easier for companies to make decisions to reduce and report on their emissions.
The regulatory landscape is moving fast. The EU Strategy for Sustainable and Circular Textiles is rapidly progressing, requiring that Digital Product Passports (Digital IDs) be mandatory on textiles sold in Europe by 2030. By 2024, the EU will publish the details of this policy, including all data required on the Digital Product Passports. Brands that have already appropriately invested in traceability and collecting product data throughout the supply chain should be on the right track to comply. But if they are still using tools that rely on global averages or material rather than product comparisons, they risk failing to be regulatory compliant.
“Systemic change for the global fashion industry comes through accessible, reliable, and transparent data,” continues Michelle, “If we want to drive change for the fashion industry, we should spend our energy focusing on being good data stewards and creating viable data ecosystems focused on fashion and, in turn, use that data to develop meaningful legislative policy for the range of interventions needed to stave off the worst environmental and social effects.”
Ready to see how your brand stacks up? Try it for free here.
AGEC, the “anti-waste law for a circular economy” 2020-105 of 202 & climate resilience Law of August 2021, is the tour de force of the French government to build a new ecological model where waste-generating products are marked and identifiable with information on their environmental qualities and characteristics.
The objective of the law is an ambitious one –to break away from a linear production model that will fundamentally change companies' production methods and consumers' consumption patterns. The solution? To move to a circular model.
“At the crux of the circular model is the reduction of carbon emissions. The classic linear model on which the economy runs is “take, make, use, and toss,” whereas a circular version operates based on the regenerative flow of the natural world.”
Head to our blog on Fashion Circularity here to learn more.
Now that we have circled back to this blog, let’s get into it.
Labels keep Brands Accountable
This law aims to change the reliance and dependence on plastics, giving the consumer real-time and updated information on the impact of daily purchases.
“So wait, where in this video did they mention climate impact labels?”
Good question. This video was put together before a much-needed decree was added to the law specifying the need for consumers to have transparent and accessible information about the products they buy.
We aren’t talking about big green labels on your clothing that say “sustainably sourced cotton” or “contains recycled materials” with no further accountability or traceability. Within a single QR code, consumers will have the assurance that the product they want to buy meets the criteria of the anti-waste law.
Decree (n° 2022-748) calling on environmental labelling of waste-generating products will make it obligatory to provide information on the presence of plastic micro fibres, the overall sustainability and the percentage of incorporated recycled materials, use of renewable resources, and textile product traceability, such as where garments were woven, dyed, and finally assembled. We will dig into this more in-depth later in this post.
Bugs within Net-Zero Commitments
It’s like the recently released internal communications of oil and gas companies by the US House Committee on Oversight and Reform. ExxonMobil discusses the "Need to remove language that potentially commits members to enhanced climate-related governance, strategy, risk management, and performance metrics" and removing all references to the Paris agreement. Shell even went so far as to wish Greta Thunberg and AOC got bed bugs. And despite what Shell says here in their ‘Commitment to Net-Zero, ’ on their website, they were caught saying that they “have no immediate plans to move to a net-zero emissions portfolio” in the next 10-20 years.
Now bed bugs are annoying, but lying about emission reductions and falsifying green claims is worse. You have followed along with the investigation and legal actions against big polluting brands like H&M or Boohoo. They are making net zero commitments, but they haven't reduced any of the significant materials they use.
How are these labels going to be enforced?
By developing a mandatory methodology for environmental labelling:
“The actors in the sector will have to work with ADEME [French Environment and Energy Management Agency] to create environmental and/or social labelling for the whole sector. This will allow consumers to quickly identify the most reliable products and make an informed choice.”
When? From the enactment of the law, which is technically already in place, but will be mandatory for all products on January 1, 2023.
But this isn’t just in France. This law mirrors a European-wide push to regulate how green transitions are communicated to consumers. We have seen it in Norway, the UK, and the Netherlands. As new products and technologies are developed with sustainability in mind, rules on consumer sales are tightened and new guidelines and policy rules are introduced.
The European Commission has proposed stronger commitments to consumer protection to keep the continent on track to its green transition.
“We are supporting consumers who increasingly want to choose products that last longer and can be repaired. We must ensure that their commitment is not hampered by misleading information. We are giving them strong new tools to make informed choices and increase the sustainability of the products and our economy with this proposal.”
Věra Jourová, Vice-President for Values and Transparency, European Commission
‘La Pièce de Résistance’ of AGEC
This act of law contains about 50 measures for providing new tools to better control and sanction offences against the environment and support companies in their eco-design initiatives to guide consumers in new consumption practices (repairability index, information on the full scope of a product’s environmental impacts, and methodological harmonization).
Non-compliance could result in several hundred thousand euros per infraction – and not just in France.
"The message of the law is clear – it will become obligatory, so brands need to prepare, to make their products traceable, to organize the automatic collection of data. Some say the models are too simple, some say they're too complicated, but it's a sign of the maturity of the debate that no one questions the need for these calculations anymore."
Erwan Autret, coordinator at ADEME, the French Agency for Ecological Transition, and the author of the labelling decree.
How will we know brands are compliant? This information will be given in the form of a product sheet of environmental qualities and characteristics, in dematerialized form, accessible at the time of the act of purchase, i.e. the labels.
From January 1, 2023, this dematerialized product sheet will allow consumers of these products to know:
- The amount of recycled material incorporated
- The presence of hazardous substances
- Geographical traceability of the three significant manufacturing steps (weaving, dyeing, assembly/finishing)
- The presence of plastic microfibers when the proportion by mass of synthetic fibres is greater than 50%
To understand, calculate and comply with environmental laws, clothing companies will need a way to accurately and effectively combine integrations, data types like bills of materials, product lists, and data formats that give brands a story they can communicate to regulators and their consumers. With proper data collection, brands will start seeing their impact decrease.
It turns out we have a tool that does all of that.
How our Engine Works
Did we mention that Arbor automates this process? Imagine the possibilities a brand can have to make the radical systemic change that is needed at its fingertips. This enables brands to accurately communicate the necessary metrics for multiple products, all at once, and to ensure that the information is regularly updated.
Arbor's automated impact intelligence system translates all the cryptic information into different outputs depending on the unique observer. For consumers, climate labels are shown through a widget on the e-commerce platform. Reports can be generated for internal or external use. Companies can also opt-in to showcase this information to governmental organizations or consumer watchdogs.
Where Data and Labels Meet
Sustainability claims need to be communicated to consumers; simply having certifications isn’t going to cut it. And we need a standardized way to deliver accurate and realizable metrics on environmental impact. French have always been trendsetters, they are one fashionable step ahead, but over here at Arbor, we are keeping up.
One of the methodologies we use at Arbor to deliver our impact calculations is the European Commission’s Product Environmental Footprint (PEF) methodology:
“PEF is a multi-criteria measure of the environmental performance of a good or service throughout its life cycle. PEF information is produced for the overarching purpose of seeking to reduce the environmental impacts of goods and services taking into account supply chain activities (from extraction of raw materials, through production and use, to final waste management). This PEF Guide provides a method for modelling the environmental impacts of the flows of material/energy and the emissions and waste streams associated with a product throughout its life cycle.”
And this is where it comes back full circle to impact labels. Last year Ademe started the study, "Climate Law experimentation: environmental labelling method for clothing textiles and footwear”, where different manufacturers and brands submitted methodologies to assess and display textile products' environmental footprints. Nothing has been made public yet, but PEF and other methodologies have been tested and the project was set to wrap up at the end of September 2022.
What Does This Mean for The Future?
There is a need for the majority of impact measure solutions to have a standardized way to compare between industries and putting methodologies, like PEF, under the microscope brings us one step closer to a trusted source of validation.
It’s like going to a Michelin-star restaurant in Paris. Their chefs weren’t just giving accreditation without a lot of proof. They were awarded those stars through rigorous demonstration of their merit. They need to be consistent, and transparent and go through multiple steps of verification. The final product is a result of all the steps that led to it.
To be able to keep track of all the data around products is key to being able to communicate the impacts of development, not just with AGEC sufficiently, but with other regulations and the increasingly more educated consumer. If you are going for dinner at the Palais Royale in Paris, you expect that your Poisson Saint Pierre with Coco de Paimpol is consistently the best quality. It is only fair that the fashion industry is held to the same standards.