Why does Vestiaire Collective begins to sell CO2 loans?

The reduction of environmental impacts has been a central marketing guarantee for second-hand fashion companies for years. With the announcement of the sale of CO2 credits, the French platform Vestiaire Collective is now going one step further.

Financial and marketing goals

“It is much more than a financial innovation. It is proof that circular economy has a concrete and measurable effect,” explains Dounia Wone, Chief Impact Officer at Vestiaire Collective. The expert welcomes a process unique in the second-hand model, with CO2 savings being converted into CO2 loans. These savings arise when customers buy second-hand articles instead of new products.

In other words, Vestiaire Collective issues credits that quantify the avoided emissions. These emissions are avoided when consumers are buying clothing and accessories from second -hand on the platform instead of new goods. According to the company’s environmental report, 90 percent of the environmental impacts are avoided when consumers: inside a second-hand article at Vestiaire Collective instead of a new one.

The company has two goals: First, it serves marketing and is intended to show the measurable environmental advantages of its business model. The second is financial nature, as the company offered 55,000 certified CO2 credits for sale at the beginning of October. The company states that they want to reinvest income from these sales. They are intended to “flow into activities that directly strengthen the solidity and volume of the emissions avoided by Vestiaire Collective, such as the curation of the catalog or impact marketing”.

Who are the credits of Vestiaire Collective sold?

The credits can be acquired by companies with climate strategies. The system of purchasing CO2 crutels enables companies to compensate for their own greenhouse gas emissions. However, this system has been very criticized in recent years.

As a reminder: A CO2 credit is a certificate that represents the reduction of a ton of carbon dioxide (CO2) or another equivalent greenhouse gas. A company can buy CO2 credits on the voluntary market. However, these credits can give the impression that companies have “compensated” their emissions without actually having to change their practices fundamentally. Instead of reducing their own emissions at the source, some companies only pay for emission reductions elsewhere. So you do not invest in cleaner technologies or change your business model. This can be perceived as a mere “right to pollution”.

An approach that raises questions

The French company chooses a risky approach. It is assumed that a second-hand clothing with ecological loads of zero comes onto the market; The effects of the original production are therefore not taken into account. The methodology used by Inuk, the certification company commissioned by Vestiaire Collective, indeed raises questions.

According to the notification, which describes the approach in detail, the methodology focuses on the effects of buying a second-hand article compared to a new one. The environmental impacts related to the operation of the Vestiaire Collective platform, such as the transport of the articles or the packaging, are not mentioned. In an email to fashionunited, Vestiaire Collective answered our question and explained that “all the environmental impact of Vestiaire Collective after the LCA logic was taken into account”.

The sale of CO2 credits also supports the purchase of clothing. Even if it is second-hand goods, this goal appears problematic. One could argue that the credits should not finance “classic” editions such as marketing and instead flow into funds for climate solutions.

Vestiaire Collective makes it clear on request that “the assignment of the income generated by the CO2 credits is strictly regulated by the additional. Order, for example, by stimulating to replace new goods with second-handed articles ”.

Finally, the methodology for measuring the positive effects on the assumption is based on the assumption that the purchase of a second-handed article inevitably replaces the purchase of a new article. A survey carried out by the platform shows that this is often the case with 87 percent, but this is not mandatory. Vestiaire Collective admits this, but makes it clear that it includes a substitution rate and the rebound effect in its calculations in order to better reflect the actual environmental effects.