Chain of Custody
The Better Cotton Chain of Custody (CoC) is the key framework that connects demand with supply of Better Cotton and helps to incentivise cotton farmers to adopt more sustainable practices.
The CoC refers to the chronological documentation, paper trail and electronic evidence that relates to the movement of Better Cotton products through the supply chain. This ensures the volume of Better Cotton claimed by BCI Retailer and Brand Members does not exceed the volume of Better Cotton produced by licensed BCI Farmers in any given time period, accounting for conversion rates.
The CoC Guidelines incorporate two different chain of custody models: product segregation and mass-balance. Each model is applicable at a different stage in the supply chain.
Between the farm and the gin, BCI requires a product segregation CoC model. This means that farmers and ginners need to store, transport and process Better Cotton (seed cotton and lint cotton bales) separately from any conventional cotton. This ensures that all Better Cotton bales produced by participating gins are 100% Better Cotton and can be traced back to licensed BCI Farmers.
After gin level, BCI requires a mass balance CoC model to be implemented. Mass balance is a volume-tracking system that allows Better Cotton to be substituted or mixed with conventional cotton. However, it ensures that the quantity of physical cotton sold with a Better Cotton claim cannot exceed the quantity of cotton purchased with a Better Cotton claim (accounting for relevant conversion rates).
BCI’s mass balance model uses Better Cotton Claim Units (BCCUs) as a designated unit to track the volumes of physical cotton or cotton-containing products associated with a Better Cotton claim. 1 BCCU represents 1 KG of physical Better Cotton lint procured from a gin processing Better Cotton by a merchant or a spinning mill, as a result of an order for Better Cotton products.
Importantly, the post-gin mass-balance system doesnot require that the BCCUs remain associated with the original physical Better Cotton from licensed BCI Farmers. This means that cotton products can be sold with a Better Cotton claim (and BCCUs associated) but may not contain any physical Better Cotton.
The Better Cotton Chain of Custody Guidelines were revised in early 2018 and v1.3 was released on 1 May 2018, to be effective by 1 August 2018. This revision focused on restructuring the document to remove duplicative and outdated requirements, provide key clarifications, and further clarify responsibilities for control of Better Cotton between farm and gin level. This version also included new mandatory timelines for entering data into the Better Cotton Platform (BCP, formerly the Better Cotton Tracer) and expanded mandatory use of the BCP in the future.
Chain of Custody Guidelines
The updated Better Cotton Chain of Custody Guidelines are available below, along with a summary of changes document and updated training materials.
- Better Cotton Chain of Custody Guidelines V1.3
- Better Cotton Chain of Custody Guidelines V1.3 Mandarin 良好棉花供应链监管原则第1.3版本(中文版).pdf
- Better Cotton Chain of Custody: Overview (1 pager)
- Better Cotton Chain of Custody: Summary of Changes (PPT)
- Better Cotton Chain of Custody: Summary of Changes (PPT) Mandarin 良好棉花供应链监管原则第1.3版本修订提要
- Better Cotton Chain of Custody: Video
- Archived Better Cotton Chain of Custody Guidelines V1.2
What is the Better Cotton Platform?
The Better Cotton Platform (BCP) was previously known as the Better Cotton Tracer. It is BCI’s online system for tracking purchases and sales of Better Cotton and associated Better Cotton Claim Units (BCCUs). The BCP is a trademarked online system used only by BCI and registered supply chain organisations that are buying, selling, or sourcing Better Cotton. It enables suppliers and manufacturers to report to their customers how much Better Cotton lint was sourced through the sale of a physical product.
What is Mass Balance Chain of Custody?
Mass balance is a chain of custody model based on volume reconciliation. This model allows mixing of certified and non-certified inputs, provided the total volumes are controlled and the amount of certified outputs does not exceed inputs (accounting for conversion rates). The Better Cotton Chain of Custody Guidelines uses a mass balance model for all purchases of Better Cotton after gin level. This allows suppliers and manufacturers to mix equivalent amounts of conventional cotton and Better Cotton, as long as the total volumes are controlled and the total amount of cotton in products sold with a Better Cotton claim is less than or equal to the amount purchased (accounting for conversation rates). In addition, all purchases and sales of Better Cotton must be recorded in the BCP with a corresponding number of BCCUs allocated.
One of the primary functions of the Better Cotton Platform (BCP, formerly Better Cotton Tracer) is to allow retailers and brands to make credible claims about the volume of Better Cotton sourced into their supply chains as a percentage of their total cotton footprint. The cotton footprint for a specific order or a collection of product orders is the volume of total cotton lint consumed by the spinner who made the yarns which were used to make the fabrics that went into an end-product. Cotton footprint always refers to a volume (in KG) of cotton lint consumed by spinners.
To calculate the cotton footprint for each sale entry made in the BCP and to allow suppliers and manufacturers to report this volume accurately to their customers, BCI uses two average rates to calculate the volume of cotton lint required for each product: one rate if combed yarn is used, and one rate if carded yarn is used.
To calculate the cotton lint consumed to make combed yarns, the BCP adds 28% to the net weight of the yarn sold. To calculate the cotton lint consumed to make carded yarns, the BCP adds 10% to the net weight of the yarn sold. As a result of this automated calculation, the correct number of BCCUs are allocated to a yarn sale entry, representing the volume of Better Cotton sourced through each BCI yarn order by a fabric mill.
Note that standard conversion rates in the BCP are being reviewed currently and may change later in 2018.
For example, if a spinner has produced 100 KG of 100% cotton combed yarns and the order indicates “100% BCI yarn”, the BCP will allocate 128 BCCUs to this sale entry. This calculation is based on the average rate as explained above.
When a fabric sale is entered into the BCP, the same calculation method (and same rates) are used to calculate the cotton footprint of each fabric order. For fabric sale entries, the BCP takes the net weight and the type of yarn used in the manufacturing of the fabric as basis to allocate the correct number of BCCUs.
Once BCCUs are allocated to fabrics, they are carried over and recorded in end-product manufacturers’ accounts in terms of fabric stocks. A fabric stock represents fabric shipments from a fabric mill to an end-product manufacturer with allocated BCCUs. Each stock could represent fabrics in a single purchase order or multiple purchase orders.
End-product manufacturers simply indicate the percentage of each fabric used to make their end-products. The BCP allocates the corresponding number of BCCUs to each end-product shipment, based on this percentage indicated by the end-product manufacturer.
The above methodology of calculating, allocating and transferring BCCUs allows BCI to use only two average rates (rather than multiple rates at each manufacturing stage) to calculate the cotton footprint for each order, or bundle of orders, placed by retailers and brands.