I would like to revisit the topic of voluntary standards. In my August 17th blog, I discussed the proliferation of voluntary standards and shared a bit of insight into cotton standards.
Voluntary standards aim to promote and reward behaviors that have positive social, environmental and economic impacts. These standards can be created to address limited compliance where government enforcement is inadequate or bolster the minimum standards established in more robust regulations and, in some cases, they eventually become incorporated into law, sanctions or subsidy eligibility requirements established by governmental bodies (e.g. EU's REACH).
As brands increasingly attempt to advance their corporate social responsibility programs, sustainability leaders are using voluntary standards as a stipulation for doing business with them. These market-based drivers can have a powerful impact on the global cotton industry.
I believe in what the standards aim to achieve and feel this change will benefit the cotton industry but the scale to which they can be applied is still in question. I have worked with voluntary standards in a multitude of capacities: leading sustainability functions for Gap Inc., chairing the Better Cotton Initiative (BCI), designing and evaluating supply chain systems, consulting on the practical application of voluntary standards, and linking government efforts with standard expansion. Based on input from cotton industry members, I am not convinced that certification and full traceability throughout the supply chain is the only - or the best - approach. Existing traceability systems in particular are cumbersome, costly and can disturb or distract from normal business operations.
With this said, the voluntary standards have created a new expectation of businesses and industries -understand your impact and act responsibly. I value this and other contributions of voluntary standards (e.g. transparency and credibility) and feel production and processing practices must be improved for the sustained health of the industry. I simply want to help the industry move further faster than what I think can be done under voluntary standards with full traceability. In a period when cotton prices are at an all time high, the industry cannot afford to invest in any measures that don't result in direct improvements to their business and bottom line. Direct investments that improve profitability or the production of cotton - e.g. farming practices or processing efficiencies -would be of greater benefit to the industry and ensure funds are directly linked with measurable change (rather than indirect expenses related to certification and traceability efforts). Once the connection between these efforts and business benefits is made, the industry will likely take it upon itself to expand efforts that align with the voluntary standards and in a manner that is efficient, impactful and aligns with their current business and supply chain models.
One model that provides an option valuing verification of practices and improved impacts over strict certification and allows for less than full traceability is BCI. BCI appeals to brands because it allows them to trace Better Cotton into their supply chains. Spinners appreciate BCI's promotion of contamination reductions. Ginners benefit from higher yields. These benefits must be realized - and if they are, the industry will lead the charge.
Are voluntary standards necessary or benefiical to the industry?
Are there different approaches that would work best in the cotton supply chain?