Supply Chain Emissions for Fashion SMEs: What to Disclose

Fashion supply chains are long, global, and complex — from fibre farming to fabric finishing and retail sales. Most of a clothing brand’s environmental impact occurs outside its direct operations, in what’s known as Scope 3 emissions.

Under the Corporate Sustainability Reporting Directive (CSRD) and VSME Standard, even small and medium-sized fashion companies are encouraged to understand and disclose their value chain emissions.

This FAQ explains what you need to know — and how to disclose it effectively without excessive burden. For background on emissions categories, see what counts as Scope 1 vs Scope 2 and the broader CSRD guide for fashion boutiques.

🧵 What are supply chain (Scope 3) emissions?

Supply chain or Scope 3 emissions are all indirect greenhouse gas emissions that occur in your value chain — both upstream (suppliers) and downstream (customers).

For fashion SMEs, this often includes:

Under the VSME Comprehensive Module (C3), reporting Scope 3 data is voluntary but recommended for transparency if your business model depends on external suppliers.

🪡 Do small fashion businesses have to calculate Scope 3 emissions?

Not yet — most SMEs are not legally required under the CSRD to disclose Scope 3 emissions.

However, if you are:

• A listed SME (on an EU-regulated market), reporting becomes mandatory from FY 2026.
• A supplier to a large company, your buyer will likely ask for this data to complete their own CSRD report.

That’s why even small brands and boutiques should start preparing now, using the VSME Basic Module and adding voluntary Scope 3 data when possible.

👗 What should fashion SMEs disclose?

At minimum, disclose what is relevant and measurable for your activities. The VSME allows flexibility:

If you use the Comprehensive Module, you can also disclose:

• Reduction targets (e.g. “Cut transport emissions 30% by 2027”)
• Supplier engagement programmes
• Offsetting or circular design initiatives

🌍 How can I estimate my Scope 3 emissions without complex tools?

You don’t need a full carbon audit. The GHG Protocol provides a simple starting point: multiply your purchases or transport data by standard emission factors.

Example: A fashion SME buys 10 tonnes of cotton fabric. Using a standard emission factor of 6.9 kg CO₂e/kg fabric → Total = 69,000 kg CO₂e (69 tCO₂e)

You can find reliable factors from:

• UK DEFRA or ADEME (France) databases
• EEA (European Environment Agency) guidance
• National environmental agencies

For transport, multiply tonnes shipped × kilometres × mode-specific factors (air, sea, road).

🧵 What are the key Scope 3 categories for fashion?

Focus on high-impact stages that represent most of your footprint:

You can start with top 2–3 categories, then expand as data improves.

🧮 Do I need supplier data?

Ideally, yes — especially for textile manufacturing partners. Ask suppliers to provide:

• Energy use per product type
• Certifications (e.g. ISO 14064, Higg Index, or VSME Basic Module)
• Emission intensity (kg CO₂e/kg fabric)

If suppliers cannot provide data, use averages from LCA (life-cycle assessment) databases such as:

• ecoinvent
• Textile Exchange Material Snapshots
• Higg MSI

Include a note in your report clarifying that industry averages were used where primary data wasn’t available.

🧥 How do I report Scope 3 data under the VSME Standard?

Follow Comprehensive Module Guidance C3–C4:

1. Identify significant emission categories (fabric production, logistics, etc.).
2. Quantify using supplier data or emission factors.
3. Disclose:
   • Total Scope 3 emissions (tCO₂e)
   • Method used (estimates, invoices, LCA)
   • Key actions or reduction plans
4. Add context (e.g. “80% of materials sourced from Europe to cut transport emissions”).

Example disclosure:

“Our estimated Scope 3 emissions were 480 tCO₂e in 2024, mainly from cotton fabric production (65%) and transport (25%). We plan to reduce emissions by sourcing 50% recycled textiles by 2027.”

📦 How can I reduce supply chain emissions?

Simple actions make future CSRD reporting easier — and attract sustainability-conscious customers.

🧾 How should I present this in my sustainability report?

Include a concise “Value Chain Emissions” section with:

• A short description of main emission sources
• A table of Scope 1–3 emissions (if available)
• A paragraph on reduction efforts

Example table:

🧩 Does this align with CSRD and ESRS?

Yes. Scope 3 disclosures align with:

• CSRD Article 19a – requires reporting on value chain impacts for large and listed companies
• ESRS E1 – Climate change standard requiring GHG data across all scopes
• VSME Comprehensive Module C3 – recommends reporting Scope 3 for transparency

Using the VSME format ensures proportionality and consistency with your future CSRD obligations.

Key Terms

• CSRD – Corporate Sustainability Reporting Directive (EU 2022/2464).
• VSME – Voluntary Sustainability Reporting Standard for SMEs (EFRAG, 2024).
• Scope 1–3 emissions – Categories of GHG emissions defined by the GHG Protocol.
• Comprehensive Module – Optional VSME disclosures for advanced topics like Scope 3.
• ESRS – European Sustainability Reporting Standards.
• LCA – Life Cycle Assessment, a method for calculating product-level impacts.
• tCO₂e – Metric tonnes of carbon dioxide equivalent (standard emission unit).
• Turnover – Total sales revenue for the reporting year.

To determine which Scope 3 categories are most relevant for your fashion business, use our interactive selector:

This tool will help you identify which supply chain emissions categories you should focus on reporting based on your fashion business operations and value chain.