Increasingly, end buyers and consumers want assurances that their products were produced and manufactured under equitable, and environmentally and ethically responsible conditions. This has led to a push for more transparency and tracking of cotton through the supply chain.
Transparency is the ability to have free and easy access to critical information. Traceability is the ability to track something as it moves along the supply chain—usually from origin to final product.
However, this shift could have negative impacts on the cotton industry and may create opportunities for supply chain actors to benefit from operating fraudulently. Implementing new systems and processes will require additional systems, trainings, and resource commitment –complicating business transactions and creating distractions from core business functions. In addition, industry members may not support such a system because they may not want to reveal all of the information requested by end buyers. For example, in highly competitive markets identification of a supplier—information often requested in tracking systems—could be considered proprietary.
In order to scale up transparency and traceability in supply chains, the industry needs to develop a system that collects needed information in a way that appeals to all parties. With the proper level of transparency, and proper assurance by a third party (e.g., tracking system provider, auditor, certifier), it is possible to set up a system that enables the end buyer to identify the source of a raw material without revealing each supplier’s proprietary information. This may require that some information remain hidden from all but a few restricted and accredited entities. The system must provide assurances to industry actors that their proprietary information will be protected, and to end buyers that the outcomes of the system are reliable and credible. Existing systems (e.g., Seam , String ) that can be models for such a system – or possibly modified to enable necessary capabilities.
Governance is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. Any efforts to develop such systems is being driven by sustainability initiatives but must be implemented by cotton supply chain actors. Representatives from all members of the cotton industry should have the opportunity to participate in the design and development of such a system that could have a widespread impact on the industry.
Questions:
Would the cotton industry support the development and implementation of a traceability system? Would additional benefits be reaped?
Should the cotton industry get more involved in the design of such a system – or even manage all aspects of its development? If so, what organizations should be involved and how?
[1] The Seam is transparent marketplace for cotton. It allows growers to market cotton directly to the merchant and mill, and merchants and textile mills can utilize the exchange to market cotton to each other anonymously.
[2] String is a secure, online service allowing product information to be shared easily throughout the supply-chain, linking cotton origin with final product.
