Better Cotton Brings Together Global Fashion Brands to Ensure Cotton Traceability

New Traceability Panel invests over £1million in supply chain innovations.

Better Cotton has convened a group of leading international retailers and brands to help enable the delivery of new traceability solutions and bring greater visibility to the cotton supply chain. These include names like Marks & Spencer(M&S), Zalando and BESTSELLER.

The panel has pulled together an initial £1m tranche of funding. It will work with suppliers, NGOs and independent experts in supply chain assurance to develop an approach that meets the pressing needs of industry today.

Traceability within the cotton supply chain will soon become a market “must” with legislators on both sides of the Atlantic moving to toughen rules. New rules presented this March by the European Commission aim to better protect consumers against false environmental claims and introduce a ban on greenwashing.

For example, sellers will not be allowed to put a sustainability label on their product if there is no certification or recognition by a public authority for it. It also prohibits sellers from making generic environmental claims such as “eco-friendly” or “green” if they cannot demonstrate environmental performance.

Many fashion retailers simply don’t know where the cotton in their clothes comes from. The reasons for not knowing are numerous, and in many cases, legitimate. This traceability panel is a major step towards addressing the reasons behind this inability to trackback to the source. We intend to address sourcing and intellectual property issues head on. Higher supply chain assurance comes at a cost –- as verifying the exact origins of a garment requires more checks and controls – so the investment of additional resources will be critical.

The Better Cotton Traceability Panel will address all aspects of the cotton supply chain, from farmers in the field through production to the consumer. Better Cotton has gathered input from over 1,500 organisations so far who have made it clear that traceability is business-critical across the whole industry but also that retailers and brands need to integrate sustainability and traceability into their standard business practices. Findings from this research highlighted that 84% indicated a business ‘need to know’ where the cotton in their products was grown. In fact, 4 in 5 suppliers surveyed sought the benefit of an enhanced traceability system. Currently only 15% of apparel companies claim to have full visibility of the raw materials that go into their products according to a recent study by KPMG.

Having worked in partnership with Better Cotton for over a decade, at M&S we have been at the forefront of sourcing more responsible cotton. We met our commitment of reaching 100% responsibly sourced cotton in our clothing in 2019 – but there is still work to be done to improve traceability. We’re proud to be a part of Better Cotton’s Traceability Panel which will help to further accelerate progress within the industry.

Specifically Better Cotton and the new panel will provide substantial investment to:

  • Further develop existing farm to gin tracing arrangements to underpin physical traceability
  • Build on its existing trading platform tracking movement of a quarter of the world’s cotton through 8000 organisations to make it possible. Fully trace any of the cotton that enters the system within a few years. 
  • Use different technology solutions and credibility arrangements to clearly distinguish country of origin initially and environmental and social practices by growers eventually.
  • Create new market mechanisms that bring value for farmers, such as rewarding them for carbon sequestration.
  • Focus on farmers – both big and small – providing training, ensuring proper working conditions, helping them access preferential financing and securing their ability to enter international value chains.

Fashion consumers are increasingly demanding to know the provenance of their purchases and at Zalando, we aim to offer this deeper level of transparency to our customers. We are all aware how complex this issue is within our industry and initiatives like the Better Cotton traceability panel will help to accelerate progress – with action to support sustainable business growth for all in the supply chain. This includes setting ambitious targets and ensuring these are actioned promptly.

Better Cotton and its partners have also trained over 2.5 million farmers in 25 countries, having raised €99 million since 2010 to fund capacity building and other field-level activities. This is projected to grow to just over €125 million by the 2021- 22 season.

Learn more about Better Cotton traceability journey.

Better Cotton Members can join our upcoming traceability webinar series, kicking off on 26 May. Register here.

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Here’s Why Fashion Retailers Need to Know Where Their Cotton Comes From

By Alia Malik, Senior director, Data and Traceability, Better Cotton. This post was originally shared by World Economic Forum on 12 April 2022. Read the original post.

Ask a fashion retailer where the cotton in their clothes comes from and most throw up their hands: they simply don’t know. ‘We buy through sourcing agents’; ‘Cotton fibres get blended’; ‘The mechanisms for tracking back to individual farms simply don’t exist.’

The reasons they give for not knowing are legion, and, in most cases, perfectly genuine. Along with ubiquitous products like crude oil, soybeans and wheat, cotton is one of the most extensively traded commodities in the world. As with these other high-volume raw materials, it is shipped in bulk, processed in bulk, and sold in bulk.

What is traceability and why is it a growing issue?

Shoppers care about the provenance of their clothes, and they are acting with their wallets. Just look at the rising sales of organic-labelled cotton. The fact that this is the only segment of the market that remains physically separated once the cotton leaves the farm, and is consequently traceable (albeit with some question marks), is no coincidence.

Legislators are also beginning to wake up. The European Commission, for instance, is currently considering a far-reaching proposal that would require corporations to dramatically tighten due diligence requirements in their supply chains. In a similar vein, customs authorities in the United States are now putting more stringent transparency conditions on cotton imports from high-risks countries.

Alia Malik

Why doesn’t the cotton sector open up about the origin of its products?

This is a question that retailers and other key actors in the industry are themselves asking. The vast majority in the cotton industry now accept that traceability is no longer a ‘nice-to-have’. Our recent survey of suppliers in the Better Cotton network found that more than 8 out of 10 (84%) see data about the origin of the cotton they purchase as a ‘business need-to-know’. And yet, at present only around 15% of apparel companies claim to have full information about the raw materials that go into their products, according to recent research by KPMG.

The sticking point is the way the market works. To reduce costs and drive efficiencies, the output of individual cotton farmers is consolidated with the output of other farmers almost as soon as it leaves the farm gate. It is not impossible to keep it segregated or to use emerging technologies to digitally mark raw cotton, but the time and costs of doing so are considerable.

Cotton doesn’t go straight from the farm to the retailer, either. There are multiple intermediary actors, from ginners, traders, and yarn spinners through to the fabric mills, garment manufacturers, and, eventually, the brands themselves. Again, introducing checks and controls at every stage may be doable, but it is costly and technically challenging.

Finally, there are legitimate questions about intellectual property to consider. Yarn and fabric producers will often draw on multiple different types of cotton to get the specific blend they are looking for. The net result is that the cotton in a garment most is likely to come from many farms, feasibly from multiple countries.

What is being done to address these challenges?

It is possible for us to address these challenges, although no-one is pretending they are easy. But nor are they insurmountable, especially given the speed of technological innovation in this space. Hence our decision at Better Cotton to bring together a group of leading industry players to consider what a workable traceability solution might look like – and how we can go about collectively creating it.

The group, which includes retailers and brands such as Bestseller, Marks & Spencer and Zalando, are looking at each stage of the procurement process, from existing chain of custody systems through to emerging methods for managing and sharing data about product origins.

A root-and-branch rethink of this kind takes time. In some instances, the potential disruptions will price many retailers out of the market. In other instances, the technological solutions aren’t yet ready to use at scale. In some cases the actors aren’t ready for change.

All these issues aside, there’s the question of physical segregation to consider. At present, Better Cotton promotes a volume tracking system akin to the green energy market. It allows retailers and brands to buy credits that guarantee licensed farmers benefit, and that the equivalent amount of Better Cotton is pulled into the supply chain, but doesn’t necessarily mean that the specific cotton they purchase comes from farms that participate in the Better Cotton programme.

To meet the level of traceability that both customers and regulators are beginning to demand, it may well be necessary to introduce mechanisms for keeping cotton from licensed farms physically separate. This will add rigidity to trading, as well as reduce opportunities for mixing and blending.

Our top priority, therefore, is to find ways to make this work in a way that delivers what consumers want (in terms of traceability) and what farmers need (in terms of a well-functioning market).

Fortunately, we are not starting from square one. Better Cotton is already tracing cotton from the farm to gin and can build on a wealth of trading and processing information already flowing through our exiting better cotton platform.

What impact could this have?

Consumer confidence is the big win from a cotton supply chain in which raw materials can be traced with ease and accuracy. With origin data in hand, the nearly 300 brands that currently source through Better Cotton can also speak with extra credibility about their sustainability efforts. But farmers are also set to benefit. A robust, accessible traceability system will enable those producers who are following Better Cotton standards to enter international value chains that are becoming increasingly regulated. They might risk being left behind otherwise.

Better information about individual farmers will also make it possible to better reward farmers for improving the sustainability of their farms through opportunities such as preferential financing, premiums, and other tailored forms of support. Linking Better Cotton farmers to international carbon-credit markets – in recognition of their 19% lower emission rate as indicated in a recent study across China, India, Pakistan and Tajikistan – is a case in point.

Much remains to be done, but the wheels of change are turning. We plan to begin a series of pilots in key markets this year, with a view to a full roll-out of an enhanced traceability system at the end of next year. Traceability isn’t going away. In fact, the demands for transparency throughout the cotton supply chain are only going to get tougher. We don’t have all the answers right now, but we will. Not knowing is no longer an option.

Better Cotton Members can register to join our upcoming traceability webinar series, kicking off on 8 June. Register here.

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Request for Information (RFI): Cotton Traceability Solutions

As Better Cotton enters its next strategic phase, to achieve our 2030 vision and drive change on the ground for farmers, Better Cotton will make it possible to trace Better Cotton through the global supply network. The purpose of this request is to gather additional information on the capabilities of a given traceability solution to produce a shortlist of vendors who will then be invited to participate in a Request for Proposal.

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Request for Information (RFI): Cotton Traceability Solutions

As Better Cotton enters its next strategic phase, to achieve our 2030 vision and drive change on the ground for farmers, Better Cotton will make it possible to trace Better Cotton through the global supply network. The purpose of this request is to gather additional information on the capabilities of a given traceability solution to produce a shortlist of vendors who will then be invited to participate in a Request for Proposal.

Read more

Request for Information (RFI): Cotton Traceability Solutions

As Better Cotton enters its next strategic phase, to achieve our 2030 vision and drive change on the ground for farmers, Better Cotton will make it possible to trace Better Cotton through the global supply network. The purpose of this request is to gather additional information on the capabilities of a given traceability solution to produce a shortlist of vendors who will then be invited to participate in a Request for Proposal.

Read more

Request for Information (RFI): Cotton Traceability Solutions

As Better Cotton enters its next strategic phase, to achieve our 2030 vision and drive change on the ground for farmers, Better Cotton will make it possible to trace Better Cotton through the global supply network. The purpose of this request is to gather additional information on the capabilities of a given traceability solution to produce a shortlist of vendors who will then be invited to participate in a Request for Proposal.

Read more

Better Cotton Appears in Ecotextile News Speaking on Plans for a Physical Traceability Solution

On 8 December 2021, Ecotextile News published “Better Cotton plans €25m traceability system”, speaking to Alia Malik, Senior Director of Data and Traceability, and Josh Taylor, Senior Traceability Coordinator, about our collaboration across the sector and long-term plans for developing full physical traceability in the cotton supply chain.

Innovating towards full physical traceability

While we are learning from traceability solutions that exist, we also understand that achieving full physical traceability is a hugely ambitious, very complex piece of work that will require new approaches to suit the needs along the cotton supply chain. We have estimated that the project will require €25 million in funding over four years and launch by the end of 2023 to supplement the current mass balance system.

Better Cotton will launch a digital traceability platform. So we’re going to go for the great big innovation now.

Alia Malik, Better Cotton, Senior Director of Data and Traceability

Collaborating across the sector

Better Cotton has been working closely with a panel of retailers and brands since last year to understand how we may deliver traceability in a way most meaningful for our members and to facilitate the inclusion of producers in increasingly regulated international value chains by connecting the supply chain through traceability. We understand that continued collaboration will be essential to inspire, influence and learn from our partnerships.

ISEAL are very interested in this because, with the changing regulatory landscape, a lot of different standard systems outside of apparel, as well as in it, are looking at what tweaks they need to make to support better traceability. So it’s something that we have the opportunity to lead and to help shape for the sector.

Read the full Ecotextile News article, “Better Cotton plans €25m traceability system”.

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