Exploring Traceability – What We’re Doing to Make Better Cotton Traceable

The Better Cotton Initiative was founded with a clear vision of making sustainable practices in cotton production the norm around the world. To make such a big impact, scaling our programme quickly was key. With that in mind, we created a Chain of Custody (CoC) framework that incorporates the concept of ”mass balance” – a widely-used volume-tracking system that allows Better Cotton to be substituted or mixed with conventional cotton provided equivalent volumes are sourced as Better Cotton.

Today, BCI is the largest cotton sustainability programme in the world, with more than 10,000 supply chain actors using our Better Cotton Platform. Mass balance has enabled the rapid growth of the amount of cotton sourced as Better Cotton while at the same time facilitating farmers to implement better practices to produce more sustainably. But as our world progresses, we recognise that it is time to explore going beyond this mass balance CoC model to offer full traceability and even more value to Better Cotton farmers and companies.

The Rising Demand for Traceability

What exactly do we mean by “traceability’? While there are many different models for implementation and use, essentially the principle is in the name – the “ability to trace’ something. In our case, cotton. For Better Cotton, this means that, at minimum, we seek to determine the region in which the seed cotton was produced and identify the businesses involved in its transformation to a finished good.

This has never been as important as it is now. As legislation requiring businesses to demonstrate knowledge of their supply chains is becoming more common around the world, companies are not only being asked to know more about the origins of their materials but also about the conditions under which they are produced. Increasing media and academic attention on geopolitical issues, including the treatment of Uyghur Muslims in the Xinjiang area of China, has further demonstrated that production location and sustainability are crucially interlinked.

Given this quickly changing operating environment, retailers and brands need to integrate both sustainability and traceability into their standard business practices. BCI already offers companies a powerful way to support sustainable agricultural practices and farmers’ livelihoods, and now we are focusing our attention on making cotton supply chains more traceable as well.

Benefits of Traceability

Up until now, the costs versus benefits of developing a traceability system for Better Cotton have prevented this work, but as the scales tip in the other direction, we are uniquely well-positioned to implement a global traceability system to meet member needs and support us in achieving our mission.

This is due to the shifting in significance of the benefits offered by traceability, which in all three main areas are increasing at every level of the supply chain:

  • Efficiency: contributions in stakeholder reporting, inventory and merchandise management, strategic sourcing enablement, process control and data management
  • Risk management: contributions in regulatory compliance, impact monitoring, contingency planning, forecasting
  • Innovation: contributions in consumer engagement, circular economy and resale, collaboration, process automation and improvement, community of practice and learning, market insight

Greater visibility of supply chains also means that retailers and brands can take greater responsibility and work to address any problems they may find, such as forced labour, poor agricultural practices and more.

Challenges to Implementing Traceability

Implementing traceability is no easy feat. It’s not simply a matter of adding on to existing processes – though we can use the existing participation from members on the Better Cotton Platform as a springboard, developing full traceability will require substantial investment, especially as we work to move quickly on these developments.

Main Challenges

  • Additional resources: This includes, for supply chain actors, the expense of developing internal control systems, potential cost implications from limited supply when many companies request traceable cotton at the same time, and significant associated resource requirements for BCI. A higher level of supply chain assurance also comes at a cost, as verifying the exact origins of a garment requires many more checks and controls.
  • Sourcing and intellectual property concerns: Creating just the right yarn and fabric blends often requires sourcing from several countries of origin – making the idea of “tracing back to the farm’, and it being just one farm, or even country, very unlikely. Concerns about protecting intellectual property add another layer of complexity.
  • Alignment with existing traceability systems: Many companies and other initiatives have begun developing their own traceability systems. The system we develop will need to align and eventually interface with existing traceability systems, from companies, for different technology solutions and country of origin programmes, which will require a great deal of collaboration and coordination.
  • Full member support: Last, but certainly not least, we need to ensure support from all categories of BCI members to move ahead with our traceability plans.

What We’re Doing Now

In July 2020 we had the first meeting of our newly formed multi-stakeholder Chain of Custody Advisory Group, and have begun getting input on priority requirements and key questions. We are also in the process of seeking funding for the first phase and this week have launched the recruitment for additional staff resources to deliver this work.

With the benefits and challenges of creating a Better Cotton traceability system clear, we have developed a high-level plan for moving forward in four distinct phases:

  • Set up and planning
  • Development and piloting
  • Stakeholder engagement and roll-out
  • Monitoring compliance and maintaining performance

With the right funding and resources, we anticipate a solution could be ready as early as 2022, following piloting in late 2021.

As we dive into the first phase of planning, we are consulting with additional members and stakeholders to identify solution requirements, including key data elements, interfaces, operating models, funding arrangements and governance structures. We are also making a detailed budget and project plan. Based on stakeholder feedback, available funding and the likelihood of long-term success, we will then determine what course of action we will take, with the knowledge that we have explored the options in partnership with our members.

Join Us as We Build on Mass Balance to Deliver More Value

While we are working on this new, traceable CoC model, it’s important to note that we are not getting rid of our current mass balance system altogether. Mass balance has an important role to play in achieving scale in sustainability for companies and farmers across the globe. We simply want to build upon this foundation to offer our retailer and brand members greater visibility of their whole supply chain, for those that want it, which ultimately brings us closer to our vision of making sustainability in cotton the norm.

Now is the time to start this work. We will be surveying members and other stakeholders in the new year – please look out for these invitations and share your input. We are also starting recruitment this week to support this work – keep an eye on the Jobs at BCI page.

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Better Cotton Launches New Chain of Custody Advisory Group

Last month, the Better Cotton Initiative (BCI) launched its new Chain of Custody Advisory Group.

The purpose of the new Advisory Group is to provide advice on the development of the Better Cotton Chain of Custody – the key framework that connects demand with supply of Better Cotton and helps to incentivise cotton farmers to adopt more sustainable practices.

Consisting of BCI Members and non-members, the Advisory Group will ensure any new Chain of Custody developments are commercially relevant, feasible and attractive to BCI’s multi-stakeholder membership.

Chain of Custody Advisory Group Members

Retailers and Brands

  • Karen Perry | John Lewis & Partners
  • Ethan Barr | Target
  • Syed Rizwan Vajahat | IKEA
  • German Garcia | Inditex

Suppliers, Manufacturers and Traders

  • Philippe Saner | Paul Reinhart AG
  • Besim Ozek | Bossa Sanayi ve Ticaret Isletmeleri TAS
  • Fawzia Yasmeen | Pahartali Textile and Hosiery Mills

Producer Organisation

  • Todd Straley | Quarterway Cotton Growers

Civil Society

  • Melissa Ho & Anis Ragland | WWF

Non-members

  • Aminah Ang | RSPO
  • Chuck Rogers | Bureau Veritas Consumer Product Services

Though it is not a decision-making body, the group will provide strategic advice to the BCI Membership and Supply Chain Team and allow for more focused discussions on the Better Cotton Chain of Custody.

It is such a diverse group, and members have a wide range of expertise and experience. We are excited to work together to help shape the future of the Better Cotton Chain of Custody.” – Joyce Lam, Supply Chain Integrity Manager, BCI.

Find out more about the Better Cotton Chain of Custody.

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Better Cotton Publishes Revised Chain of Custody Guidelines

The Better Cotton Initiative (BCI) has launched a revised version of the Better Cotton Chain of Custody Guidelines.

Chain of Custody Guidelines V1.4

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 Guidelines incorporate two different chain of custody models: product segregation between the farm and gin and mass-balance after the gin level.

The latest CoC Guideline revisions focused predominately on removing outdated CoC requirements, clarifying and strengthening existing requirements, addressing any ambiguous language and restructuring the layout of the document. The updated CoC Guidelines V1.4 now also clearly define and distinguish between mandatory requirements and best practice guidance.

Importantly, the basic Chain of Custody requirements have not changed – BCI still requires a product segregation model in place between farm and gin level (i.e. Better Cotton must be kept segregated from conventional cotton) and a mass-balance chain of custody model is applicable after gin level. More information on these models and requirements for different supply chain organisations can be found in the the CoC Guidelines.

The revised guidelines replace the previous V1.3 and will be effective as of 1 August 2020, which is the beginning of the ICAC international cotton season.For more information, please read the FAQ and summary of the key changes documents.

Find out more about the Better Cotton Chain of Custody on the BCI website.

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Sustainable Cotton Reaches 22% of Global Production as 2.3 Million Farmers Receive Training on Improved Agricultural Practices

 
Today, the Better Cotton Initiative (BCI) launched its 2019 Annual Report. In the report, BCI shares that Better Cotton – cotton produced by licensed BCI Farmers in line with the initiative’s Better Cotton Principles and Criteria – now accounts for 22% of global cotton production*.

In the 2018-19 cotton season, together with expert on-the-ground Implementing Partners and with support from more than 1,800 members, BCI provided training on more sustainable agricultural practices to 2.3 million cotton farmers – 2.1 million gained a license to sell Better Cotton. This drove the volume of more sustainably produced cotton available on the global market to a new level.

At the opposite end of the supply chain, BCI’s Retailer and Brand Members passed a significant milestoneat the end of 2019, sourcing more than 1.5 million metric tonnes of Better Cotton ¬≠– a record for BCI. That’s a 40% increase on 2018 and sends a clear signal to the market that Better Cotton is becoming a sustainable mainstream commodity. Better Cotton uptake now accounts for 6% of global cotton production.

It is particularly pleasing to share the progress BCI is making, thanks to the concerted efforts of our members, partners and other stakeholders, towards our 2020 targets. With two more cotton seasons (2019-20 and 2020-21) within which to make further advances at field level, we are committed to not only continuing to deliver beneficial change at field level, but also to learning from the experience and adapting to become more effective. We do not yet know how close we will come to our 2020 targets, and we are still assessing how the current Covid-19 pandemic will impact our efforts. But one thing is certain, we have made significant and undeniable progress over the past 10 years, and there are many successes to celebrate.” – Alan McClay, CEO, BCI.

2019 Report Highlights

  • Better Cotton was grown in 23 countries in the 2018-19 cotton season.
  • Licensed BCI Farmers produced 5.6 million metric tonnes of Better Cotton. That is enough cotton to make approximately 8 billion pairs of jeans, a pair each for every person in the world.
  • Better Cotton now accounts for 22% of global cotton production.
  • BCI and its 76 field-level partners delivered training and support to a total of 2.3 million farmers.
  • 2.1 million cotton farmers received a BCI license to sell their cotton as Better Cotton – 99% are smallholders farming on less than 20 hectares.
  • BCI Retailer and Brand Members sourced 1.5 million metric tonnes of cotton as Better Cotton in 2019 – a record volume.
  • Uptake of Better Cotton now accounts for 6% of global cotton production.
  • BCI welcomed more than 400 new members in 2019.
  • By the end of the year, BCI had 1,842 members across five membership categories, a 29% increase on 2018.

Access the interactive BCI 2019 Annual Report to learn more about our successes, challenges and the progress we are making towards our 2020 targets.

*The percentage has been calculated using ICAC’s 2019 global production figures.

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Better Cotton Creates New Chain of Custody Advisory Group: Apply Now

 
As BCI develops its 2030 strategy and targets for the next decade, in addition to deepening BCI’s impact at field level, the focus remains on scaling the sustainable production and sourcing of Better Cotton – the cotton grown by licensed BCI Farmers in line with the Better Cotton Principles and Criteria.

Under this target area, BCI will consider the existing Better Cotton Chain of Custody (CoC), which constitutes the key framework that connects supply with demand of Better Cotton and helps to incentivise cotton farmers to adopt more sustainable practices.

The Better Cotton CoC currently incorporates two different chain of custody models: product segregation at the beginning of the supply chain (farm to gin) and mass-balance after the gin stage*. Going forward, BCI will consider whether it can provide a wider range ofchain of custodyoptions for all Better Cotton supply chain players, both BCI Members and non-members.

The purpose of BCI’s new member-based Chain of Custody Advisory Group is to provide advice on the development of the Better Cotton CoC, including projects and activities such asgin monitoring visits and supply chain audits in key Better Cotton producing countries.

Consisting of BCI Members and non-members, the Advisory Group will ensure any new chain of custody developments are commercially relevant, feasible and attractive to BCI’s multi-stakeholder membership. Though it is not a decision-making body for the organisation, the group will provide strategic advice and allow for more focused discussions on the Better Cotton CoC.

BCI would like to invite interested stakeholders to join the new Chain of Custody Advisory Group to help shape the future of BCI.

Download the application form.

You can find further background information, details on the Advisory Group scope of work, and the Terms of Reference here.

The deadline to apply for the Chain of Custody Advisory Group is Friday 8 May 2020.

Please contact BCI Supply Chain Integrity Manager Joyce Lam at [email protected] if you would like to participate, or if you require further information.

*In the segregation method, the purpose is to ensure that Better Cotton is not mixed or substituted with conventional cotton between the farm and gin. In the mass balance approach, the objective is to ensure that the quantity of Better Cotton purchased does not exceed the quantity of Better Cotton sold. Find out more about the Better Cotton Chain of Custody here.

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