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Lavinia Muth on carbon neutrality, sustainability reporting and communication

February 15, 2022
Carbon offsetting
Green Marketing

Whether on your social media, your e-commerce or store, or your products’ or sustainability pages, it’s becoming increasingly important for sustainable fashion brands to communicate sustainability to their consumers. Green claims should be easy to understand, credible and most importantly, verifiable to avoid greenwashing.

We sat down with Lavinia Muth, a sustainability expert or provocateur, like she calls herself, because “how can I call myself an expert in a field where the biggest challenge is still a huge knowing-doing gap?”. Lavinia is former Corporate Responsibility Manager at the German sustainable fashion brand ARMEDANGELS, and we discussed sustainability communication and reporting, carbon neutrality, policy and legislation. 

What are the challenges for sustainability managers today? And how do you think these could be tackled?

There are so many challenges, but there's also so much potential. Let me break it down to three major challenges as the following.

Measure business sustainability. All companies struggle with quantifying their sustainability efforts. And, as there are no clear instructions, companies and sustainability managers need to link sustainability to a business case. One of the very few ways to tackle this is by questioning the current business model. Single ownership firms, partnership firms and the joint stock companies – all these forms of business organisations are operated with a view to making profits. However, profitability and sustainability should go hand in hand. Measuring your sustainability efforts will help you define the business processes where improvement can lead to sustainability and profitability.

Transparency. Although it is a pre-condition for assessing and improving sustainability practices, a lot of companies still lack transparency. You cannot judge without transparency, simple as that. Transparency builds on the idea that an open environment in the company, as well as with the community, will improve performance. The only way for companies and sustainability managers to execute and achieve transparency is through open communications with all key stakeholders that are built on high levels of information disclosure, clarity, and accuracy – as well as through an openness to recognising mistakes and improving practices.

Engagement. Finally and most importantly, engaging the board of management is as crucial as engaging the organisation broadly: as sustainability departments have been established in the last years, and sustainability managers have been recruited, the rest of the organisation, in some cases, feel less responsible for sustainable development and start taking less efforts in their commitment to sustainability. Transforming business culture towards sustainability is a responsibility that falls on everyone’ shoulders within an organisation. Sustainability should be considered during every decision-making process at organisations and companies. We all need to become sincere about reducing our impact.

When communicating sustainability to consumers, what is the best way to do so from your experience? What have you learned from other brands?

When it comes to communicating sustainability to consumers, the three big buzzwords are honesty, credibility and accountability.

Honesty. Not only on an operational level, but also in external communication, brands should be open and honest about their sustainability journey, which includes the good and the bad. Wanting to be a climate leader means enabling others in your industry to follow your examples – and that means learning from your mistakes as well as your successes. A good example for excellent and honest communication is Ace & Tate, the eyewear company. In 2021, they admitted they had set unrealistic climate targets, and they talked honestly about this and explained what has gone wrong, and how they are tackling it now.

Credibility. Increasingly, companies are making a lot of investments in reporting and communicating their sustainability efforts and progress. This is usually published in a format of sustainability reports with pages of numbers, graphs and charts showcasing various sustainability metrics. However, these reports are sometimes not well received due to the lack of credible evidence and accurate data to back up the claims made in the reporting. Increasing the credibility of your sustainability reporting can be rather simple. You should only communicate any activity, any effort, or any progress when you have concrete evidence, verifiable reference and measures of assurance of the quality and accuracy of information. A good example is the 2020 Responsibility Report from the Danish fashion brand Ganni. Ganni reports all relevant information with respective references, adding case studies to support the data with qualitative learning. And it is also written in a way that make you enjoy learning about the company’s successes and challenges.

Accountability. It is the extent to which brands are transparent and accountable regarding sustainability, not only to their shareholders but also to their diverse and demanding global stakeholders. I believe that accountability and sustainability are concrete and measurable concepts. Brands can make innovative commitments and deliver measurable and accountable progress, and find ways to communicate that progress even if it is imperfect and incomplete – as it almost always will be. A good example is the sustainable footwear company Allbirds and their new commitments announced in 2021. Allbirds acknowledges the significant challenge that the company’s impact has its limits. So, as it has done with product development and as a member of the Certified B Corp community, Allbirds has planned to share information about the quantitative process behind its new climate goals through open collaboration, assisting companies and growers in its supply chain to transition to clean energy or regenerative practices.

What is the role of sustainability data in a brand’s sustainable journey?

Data and data-driven approaches have been adopted across every facet of modern society, from recruitment to choosing a venue for date night – data is everywhere. Society’s increasing reliance on data is often criticised – those bemoaning experiences being boiled down to star ratings or attaching financial values to entire ecosystems clearly have a point. However, in the push to fight climate change and global inequality, I believe that data accessibility (I prefer to talk about data accessibility) is one of our greatest tools. The benefits of data accessibility are seen throughout the quest for environmental as well as social sustainability. Data is key for scientists researching the issues, key for governments needing to know what actions to take and when, key for businesses and end-consumers seeking to understand their impact on the planet and is also key for the current and future actions to answer the climate crises.

But, I believe that governments do too little to invest and incentivise science to get more reliable data and following measures. I do see a lot of potential when governments incentivise environmental action, because then it becomes easier for businesses to take advantage of these incentives. It also becomes easier for companies and end-consumers to know their individual environmental and social impacts when trying to reduce them. The availability of data in general does not only make it easier to cut emissions but also easier to cut costs. For example, energy efficiency is one of the first and most cost-effective methods of reducing both environmental impacts and electricity and heating bills, with data not just helping to save the planet but also community wallets for example.

For brands that measure, reduce and offset their carbon footprint, how can they best communicate their efforts? Some sustainability experts have argued that communicating the carbon impact of an item is useless to consumers “who don’t know what is good or bad”.

First of all, I would never underestimate the consumer and the access consumers have nowadays to data. But I would actually doubt so-called sustainability experts who judge consumer-opinions or engagement by defining them as good and/or bad. On a scientific level I believe that almost everybody has understood that the negative impacts of global warming on agriculture, health and environment far outweigh any positives. It anyways is a pretty complex topic, and I only know very few experts who have a clear picture on the whole topic.

I think all of this is a process. As there will be diverse carbon taxes in the near future, it will be the new normal to communicate the carbon impact of each and every product. And while communicating the impact, we also need to make sure that reduction measures and offset or capture projects are reliable and actually make sense. Here, honesty, credibility and accountability apply again.

When it comes to carbon neutrality claims, what are the do’s and don’ts?

As for every reporting of every parameter which is not defined by law, you need to define and explain what carbon neutrality means for you and your business and how this is achieved. I would define achieving carbon neutrality by means that any CO2 equivalent released into the atmosphere from a company’s activities is balanced by an equivalent amount being removed, which can happen by actions like active reduction and carbon offsetting. Companies may buy carbon offsets , and thereby fund a project that reduces greenhouse-gas emissions elsewhere by, for example, increasing energy efficiency, developing renewable energy, restoring forests, or sequestering carbon in the soil.

There is no big NO for me when it comes to carbon neutrality claims. But, climate claims and data must be explained properly. There is only a generic NO-GO-communication for me, which is if you equal the carbon neutrality of your company or your operations to something outstanding. It is the minimum we all need to do, because we are in a state of emergency. 

Carbon Neutral, Carbon Positive or Carbon Negative. What do these terms mean?

Carbon neutrality exists when a carbon footprint has been measured, reduced and offset. The result is a balance between emissions caused on the one hand, and emissions avoided on the other – in other words, neutrality. The United Nations uses the term “climate neutrality” as an official designation, which ensures that all applicable greenhouse gases are included. These are referred to as CO2 equivalents, which converts all designated greenhouse gases into one measure. As I understand it, in English “carbon neutrality” has woven its way into our language, instead of “climate neutrality”.

When you want to achieve carbon neutrality, there are three categories of emissions that must be accounted for:

Scope 1 emissions: direct emissions from a company, for example the CO2 equivalent emitted by the company’s vehicle fleet;
Scope 2 emissions: indirect emissions, for example the energy supply of the company building, which already causes emissions when it is produced;
Scope 3 emissions: indirect emissions that are not within the direct control of the company, such as the supply chain or products produced and shipped and sold and returned, and so on.

Although strictly speaking only Scope 1 and Scope 2 emissions need to be offset for a company to claim carbon neutrality by certificate, it is now generally agreed that this does not go far enough. Most climate crises solution providers, therefore, require companies to include multiple Scope 3 emission categories. They require that all related emissions along a company’s supply chain, including raw materials, production, logistics and packaging, are included in the calculations.

It is important to note that it has been difficult in the past to define and verify carbon reduction metrics across sectors and products. That means to become carbon-neutral, a company can only measure its Scope 1 and Scope 2 emissions, set up a loose and short-term reduction plan and simply offset the rest to be climate neutral. This is a positive first step, but a small one at best. What should be desirable for all, on the other hand, is net zero in emissions – a term which I would like to additionally invite to the conversation.

What is Net Zero? Zero seeks to raise the standard and bridge the gap that carbon neutrality still leaves open by setting a minimum CO2 equivalent reduction target that addresses the majority of Scope 3 emissions within a defined timeframe, and gradual further development from climate protection projects that offset CO2 emissions to projects that remove CO2 (carbon removal). Setting a Net Zero commitment starts with companies taking more direct responsibility for their emissions. This usually means that they should include at least certain percent of Scope 3 emissions in their calculations and targets.

What is Carbon Negative then? Basically, it means nothing other than going beyond Net Zero and offsetting a greater amount of CO2 equivalent than emitted. However, the devil is in the details. For example, ethical wool brand Sheep Inc. claims to be the first fashion company in the world to be naturally carbon-negative, but has not set a public CO2 reduction target nor showing actual numbers from the farms where they claim to sequester carbon through regenerative farming practices.

And what is Carbon Positive? Carbon-, CO2- or climate-positive is a phrase that should actually be avoided in my opinion, as it can easily lead to the assumption that the climate can be “positively” affected by buying more products or services. Claims that call for more consumption which shall lead to a more positive impact sound suspicious to me. Every physical or digital product has an impact on the planet, so part of the solution must be a significant reduction in overall consumption. Having said that, I have not talked to any climate scientist who has confirmed that carbon-positivity is a thing.

What about carbon offsetting vs insetting?

Offsetting is what most of us do. Planting trees for carbon offsets, in many people’s eyes, is at least better than greenwashing. Turning that sustainability cliche around a little and trees are planted to support agroforestry within a business’s direct supply chain, then we’re talking about insetting. Insetting by contrast to offsetting sounds like a lot of work. Offsetting is traditionally known around carbon, but insetting can extend into other areas like sustainable livelihoods as well. That sounds pretty inclusive. I think insetting can help companies to regenerate the ecosystem that they depend upon by making the climate strategy more legitimate, more linked with the business. Insetting is also more in line with the polluter-pays-principle which we should all apply to.

When it comes to communication, it might not be as sexy to communicate. For example, your supply chain is 70% established in Portugal, and the insetting projects would focus on Portugal. Your story around this might be more difficult to “sell” than having insetting projects in the Brazilian Amazonas. But, I also see potential because if insetting projects help communicate the benefit of businesses working with their own supply chains in a more holistic, sustainable way, then that can only be a very positive thing.

What is coming in the future that can make sustainable fashion available to more people and that can bring ethical worker treatment to the fashion mainstream? Do policy and legislation have a role to play?

I believe that policy and legislation and the corresponding implemented infrastructure – meaning the right incentives from governments – is everything!!! As I said before, I believe that governments do too little to invest and incentivize for example science to get more reliable data and following measures. I do see a lot of potential when governments incentivise environmental and social action, because then it becomes easier for businesses to take advantage of these incentives. I really, really hope that international and national supply chain laws will change labor conditions and salaries around the globe. I see a lot of potential, but as I stated in the beginning we urgently need to seriously rethink our existing business models. Sole profit goals will not buy us out of this mess.

Finally, I see a lot of potential in the combination of on-demand production and digital fashion, which means better data, less abuse, less waste, less resources, less pressure, more adequate planning, and more resilience and security. I also see a lot of potential in alternative business models like renting clothes, repairing clothes, and creating new communities.