There has been a significant rise in marketing sustainable products – many based on certified sustainable ingredients - to consumers in recent years. Given the importance of climate change, resource conservation and water scarcity in today’s cultures, this trend likely will not dissipate in the near future.
As with almost any differentiated product, there is often a price premium associated with certified cotton. This premium encourages fraud by unscrupulous actors selling uncertified cotton as certified. A recent study commissioned by Solidaridad, an organization that supports the expansion of organic and Fairtrade cotton production, indicated that approximately half of the products marketed as “organic cotton” could not be substantiated.
Just a few of the many issues involved to substantiate marketing claims were mentioned in a recent story of clothing mislabeled as “organic cotton” and sold by major retailers contained genetically modified cotton from India got widespread attention. One of the most challenging issues involved in many of the “green” marketing claims is the inability to substantiate – or test – the final product against a “green” standard. In some situations, testing may be possible but is not cost effective to perform at a frequency to aid in the enforcement of claims.
Existing regulations and guidelines provide a framework to help the industry ensure the authenticity, understandability and credibility of all ‘green’ claims associated with a cotton product. The following general principles are often the basis of national regulations:
• Spell out exactly what is beneficial about a product in plain language that consumers can understand.
• Link the environmental benefit to a specific part of the product or its production process.
• Ensure you have proper documentation to substantiate your claim. This is particularly important when citing a certification standard.
• Explain how a product’s characteristic is beneficial to the environment.
Import (retail) countries establish requirements and regulations pertaining to labeling the types of material and cotton used in textiles sold in their countries. Below are brief overviews of regulations governing marketing claims on or about cotton products in key consumer markets.
Most voluntary standards use the following guidance for marketing claims.
• Products made with 100% “sustainable” fiber content can be labeled as “sustainable” or “100% “sustainable”
• Products with a minimum of 95% “sustainable” fiber content can be labeled as “sustainable cotton”
• Products with a minimum of 70% “sustainable” fiber content can be labeled as “made with “sustainable cotton” [Note: Fairtrade only requires 35% content to be labeled as “made with”.]
The question remains, however, is whether or not the industry can develop processes, controls, enforcement mechanisms, and systems to enable and ensure substantiated claims and a level playing field. If a premium continues to be applied to the extraneous attribute that cannot be authenticated at the product level, systems and controls should be developed. If fraud continues, it could diminish the market value of true and certified ‘green’ products that may stymie sustainability advances as well as damage the reputation of cotton in general.
Questions:
• Does the increased level of transparency required to substantiate marketing claims and/or trace cotton from origin to product pose any risks to the manner in which the supply chain operates today (e.g. proprietary information at risk, disruption to business)?
• What role can the cotton industry associations play in reducing fraudulent claims and/or streamline documentation processes?
• Would a central clearinghouse where all certified cotton claims are registered, monitored and reconciled with marketing claims assist?
• Would processors benefit from having guidance documents to help them manage, enter data from, and retain document in accordance with best practices and industry standards?
• Do these trends create an opportunity for more vertically integrated supply chains? If so, would this present opportunities or pose additional challenges for small and medium enterprises to access the global market?
