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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Closing the loop on traceability

BCI is now implementing the final step to establish end-to-end online traceability for Better Cotton products.

In January 2016, BCI added garment manufacturers to its traceability system, the Better Cotton Tracer. This addition marked the completion of ”end-to-end” traceability, allowing BCI to verify the volumes of Better Cotton being sourced by our retailers and brands through products and suppliers from field to store.

The development of the Better Cotton Tracer started in 2013. Initially, ginners, traders, spinners, and retailers and brands were the only supply chain actors to have access to the Tracer. Over a period of less than three years, the system has been developed to include fabric mills, import-export companies, traders of yarns and fabrics, and finally garment manufacturers – so that all actors in the supply chain can now record their transactions.

”The Better Cotton Tracer is the most widely-used and the only end-to-end traceability system of its kind in the cotton industry. Any ginner, merchant, supplier, agent or retailer can use our system no matter where they are located in the world for any Better Cotton-related raw material or finished product: from seed cotton to t-shirts. It is simple, lean and user-friendly, which are the keys for developing a system that could be used by a ginner in Africa, a supplier in Turkey or a retailer in San Francisco with equal ease,” says BCI Supply Chain Manager, Kerem Saral.

End-to-end traceability simplifies the administrative process for Better Cotton sourcing, particularly for retailer and brand members who drive Better Cotton uptake. Having an end-to-end traceability system allows BCI retailer and brand members to receive documentation and information about the volume of Better Cotton they source electronically. Added simplicity for BCI’s members helps to supportourmission ofestablishingBetter Cotton as a responsiblemainstream solution.

The Better Cotton Tracer records how much Better Cotton is sourced by any user in the supply chain. Actors in the supply chain record the number of Better Cotton Claim Units (BCCUs) they received with a product, such as yarn, and allocate these units to the product sold the next actor, such as fabric, so that the amount ”allocated” does not exceed the amount ”received.” Although BCI’s current system does not physically trace Better Cotton through the supply chain, end-to-end traceability strengthens the credibility of Better Cotton claims made by our retailer and brand members.

To learn more about BCI’s Chain of Custody, watch our shortvideo.

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H&M ‘making sustainability fashionable’

BCI Pioneer Member, H&M, have released their latest sustainability report for 2014. Highlights of the report include:

  • Almosttripling their procurement of more sustainable cotton in three years.
  • 2% of the cotton they use being certified Better Cotton, Organic or Recycled.
  • Adding fabric and yarn suppliers to their supply base, taking a major step forwards increating supply chain transparency.
  • More sustainable materials now representing 14% of products’ total material use.

The report shows H&M’s dedication to finding more sustainable solutions for the fashion industry. It details their progress to date on a journey towards “making fashion sustainable and sustainability fashionable.’

The report features and interview with H&M CEO Karl-Johan Persson, in which he talks about the transparency and partnerships necessary to drive real change in creating a more sustainable company for the long-term.

As a BCI Pioneer member, H&M have committed to sourcing all of their cotton from “more sustainable sources’ (including Better Cotton, Organic and Recycled) by 2020. To read the online report, including a highlights video and downloadable pdf, click here.

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Better Cotton Introduce Fabric Mills to Traceability System

In our effort to continuously drive increased traceability for Better Cotton, we are introducinguser accounts for fabric mills to the Better Cotton Tracer. Initially, this will be run as a pilot. The change will mean that for the first time fabric mills will bepart of the Better Cotton chain of traceability, allowing BCI retailers and brands to trace their cotton purchases more accurately and transparently.

In 2013, BCI, in partnership with ChainPoint, introduced an online traceability platform for use by ginners, spinners and retailers to record purchases and sales of Better Cotton – the Better Cotton Tracer.

The new pilot category gives fabric mills access to the Better Cotton Tracer for one year. This access will allow retailer members of BCI to track the use of Better Cotton more easily as it moves through the supply chain, increasing transparency. In some cases, retailers will have full visibility from field to fabric for the first time. The updates to the system will not yet give the option of “Better Cotton Products,’ but do take BCI one step closer to the possibility of full physical traceability becoming an option for Retailer and Brand Members in 2016.

Ruchira Joshi, BCI Director of Programmes – Demand, says: ”BCI aims to recruit 250 fabric mills as users in 2015, before assessing the success of the fabric millpilot category. We hope that by extending the use of the Better CottonTracer across different actors, BCI will contribute to more trusting relationships between these actors and a more transparent cotton sector as a whole.”

 

More details are available from BCI’s Membership Team by contacting [email protected]

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Increased traceability for Brazilian cotton

BCI Partner the Brazilian Cotton Growers Association (ABRAPA) have announced that they willimplement a National Cotton Quality Database: as part of the existing Standard Cotton HVI Program developed by ABRAPA, this database will make Brazil only the second country in the world, along with the United States, to provide such levels of transparency and quality assurancein cotton production. The database will provide real-time analytics on the production and quality of cotton bales produced in Brazil each year,dramatically increasing the traceability and quality assurance of Brazil’s cotton supply chain.

The creation of a national cotton quality database is an important step toward achieving our goal of 100% transparency of HVI quality results for cotton produced in Brazil.” said ABRAPA President Gilson Pinesso. “The ability to provide buyers with accurate and timely cotton quality data will directly increase market confidence in the fibre that our members produce, while the greater transparency and traceability will benefit every member of the value chain – from the farm to the retailer.

The National Cotton Database is one of the three main components of the Standard Cotton HVI Program, along with the construction of a central reference laboratory and the implementation of the International Laboratory Certification program run by ICA Bremen, an international centre of excellence for cotton testing, research and quality training.

ABRAPA has been BCI’s Partner in Brazil since 2010. They became a Strategic Partner in 2014 after completing a benchmarking exercise which aligned ABRAPA’s own ABR (Responsible Brazilian Cotton) programme, with the Better Cotton Standard. This means that cotton produced under the ABR standard can be sold as Better Cotton, increasing global supply. To read more about BCI’s work in Brazil, click here.

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