KE Fibertec develops, manufactures, and markets air distribution systems based on fibre technology. The principle is to create draught-free and uniform distribution of the ventilation air through tailored textile ducts.
KE Fibertec wanted to develop so-called EDP (Environmental Product Declarations) of ventilation ducts in order to make informed decisions on selecting the most environmentally friendly components and suppliers as well as to provide their customers with detailed environmental information on ventilation ducts. The EDP is based on the life cycle assessment methodology ISO 14040 and 14044 (ISO 2006a, 2006b).
Using this methodology we performed an environmental product declaration of a specific textile ventilation duct. Furthermore a proprietary database was established with environmental profiles for all production components to enable making future environmental profiles for other types of textile ducts. The results of the project are presented in a proprietary report.
The Danish apparel sector is globally recognised and economically important to the Nordic region. The textile sector for Denmark had an estimated value of DKK 38.6bn in 2012 (DMOGT, 2013), including apparel and other textiles. Like most apparel, it is associated with environmental impacts across supply chains worldwide. The Danish Environmental Protection Agency commissioned Niras, 2.-0 LCA consultants and Trucost to conduct a triple-level natural capital valuation to determine the impacts of apparel production , where they occur and what the significant impacts are in monetary terms. The analysis focuses on three levels of the apparel sector in Denmark. These are:
This helps stakeholders to understand the natural capital dependencies throughout differing levels of the apparel sector supply chain, allowing better development of sourcing policies and interventions for improvements.
Natural capital accounting in the apparel sector is receiving increased interest, with the 2014 Global Leadership Award in Sustainable Apparel (GLASA) focussing on natural capital advancement in the sector (SFA, 2014). The relevance of natural capital accounting for apparel companies is being driven by factors such as water scarcity, which is threatening crop production as demonstrated by cotton slumps and price hikes following droughts in China and the US, and reputational risk, as witnessed by campaigns over factory working conditions and hazardous chemicals. The study captures greenhouse gas (GHG) emissions, air and water pollution and water consumption, as well as the impact of indirect land use change (ILUC). The study does not capture the direct land use change or other environmental aspects.
Over 80% of Danish apparel is imported as finished product, and most of the environmental impacts are associated with activity outside of the country. The figure shows the distribution of impacts across the three key import countries (Turkey, China and India) for finished apparel, along with impacts associated with the rest of the world (RoW).
As such, influencing reduction of impacts is more difficult to control, and opportunity exists through supplier engagement and sustainable procurement policies, as well as through consumption measures. Further to this, by using the sector level natural capital account, companies operating in the industry may be able to better understand where to focus their engagement and target improvement.
The results of the sector level natural capital account show that the most material impacts are associated with raw material production in Tier 5, and the final stages of tailoring apparel, Tier 1 (though this phase includes the whole supply chains of accessories and adornments/trims), and Tier 2. Impacts are dominated by GHG emissions, air pollution and water, though water is significantly more material within Tier 5 than other tiers, due to irrigation and farming requirements. Should the sector have to internalise natural capital costs of indirect land use change, water consumption, air and water pollution and GHG emissions, a total cost of DKK 3,390 m would be apparent, equivalent to 11.7% of total revenue for the sector. When considering average profit for the sector in 2012 was less than 6% of revenue (Deloitte, 2014), if the natural capital cost remained constant, this risk would equate to almost twice the profit margin of the year, resulting in a net loss for the sector.
The E P&L accounting model has only been conducted for companies so far, and the companies that have applied the model have usually been large and resourceful. A key question of this project was “How can small and medium sized companies as well as other stakeholders take advantage of this new methodology of quantifying and valuing natural capital throughout the value chain?”
An E P&L conducted at the country consumption level could benefit a wider group of stakeholders, including trade associations, government bodies and the companies in the industry. More specifically, the E P&L for Danish apparels gives an overview and a complete picture of the environmental impacts related to suppliers throughout the value chain. The E P&L at this level also illustrates the relationship between what is emitted domestically and internationally. In addition, the E P&L provides information on how the Danish apparel industry works compared to other countries. On a company level, the E P&L contributes to understanding the environmental profile of different industries in the apparel supply chain, and provide useful insight to the companies on where the risks and opportunities are in the value chain. Finally on a product level the E P&L can provide a more precise product profile and illustrate the impact of substituting conventional materials with more sustainable alternatives.
The objective of this project was therefore to conduct an E P&L analysis across three levels:
1. Industry level (relevant for trade associations and government bodies)
2. Company/brand level (relevant for trade associations and companies)
3. Product level (relevant for trade associations and companies)
The results from the project can be found in the report: Danish apparel sector natural capital account.
Figure – Impact intensity for all countries of import (all tiers)
