Untangling the Threads: Achieving Transparency and Traceability in the Cotton Supply Chain

Consumers, investors, and regulators are demanding ever greater levels of supply chain transparency and evidence of responsible sourcing, pushing brands and retailers to rethink their supply chains. This is particularly true for cotton, whose journey from farm to finished garment is incredibly complex and has lacked visibility in the past.

The Visibility Challenge: Navigating a Complex Web

Historically, the cotton supply chain and its stakeholders have been very disconnected. This is mainly a symptom of the various stages, actors and geographies cotton must pass through to reach the shop floor. From the growers who cultivate the cotton, the fiber will pass through the hands of ginners, spinners, mills and manufacturers all before brands and retailers set eyes on the final product.

These stages can span multiple countries, as can the fibers used to make the final garment, making it difficult for brands to have full visibility of the source, quality and environmental impact of the cotton products they are selling. Without collaboration across the entire value chain, any hope of meeting new regulatory requirements and consumer expectations for sustainable products is minimal.

Collaboration: The Cornerstone of Transparency

Transparency and traceability are a new necessity for the cotton supply chain. New legislation is already mandating unprecedented levels of transparency for the cotton industry, such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD), whilst others in development, like the Green Claims Directive, are set to have a significant impact on the market in 2025.

Likewise, pressure from advertising and competition regulators is necessitating more robust, authenticated environmental data to back-up any sustainability claims by brands and retailers. This means complete supply chain visibility and quantifiable, verifiable data are now a “must”, not a “nice to have” – and this requires collaboration.

This is where data-led solution platforms like the U.S. Cotton Trust Protocol, among others, play a vital role. Not only is the program one of the key platforms contributing to measurable progress, verifiable goals and measurement in six key sustainability metrics – water use, energy efficiency, land use, soil health, soil carbon and greenhouse gas emissions – but it is also a leading contributor in the sustainable cotton fiber industry offering article-level supply chain transparency.

Everything begins with the growers who provide farm-level information on the six sustainability metrics. This data undergoes both second and third- party verification to confirm best management practices and provides brands and retailers with the confidence they need about the origin and sustainability of the U.S. cotton sourced in their supply chains.

The Protocol Consumption Management Solution (PCMS) is our traceability and transparency solution that allows the tracking of U.S. Cotton and cotton specifically grown on Protocol producers’ farms. This article-level transparency, enabled by mills and manufacturers, is building a more sustainable and traceable cotton supply chain for all. The result for brand and retailer members is complete visibility of each stage of production, as well as absolute validation of the origin of the cotton fiber tracked into their finished products.

In the past year alone, the number of shipped units tracked by brands and retailers through the PCMS has tripled, underscoring the increase in demand for more transparent and sustainable cotton. Beyond simply meeting regulatory requirements, this field level data and enhanced supply chain visibility offers brands and retailers the opportunity to communicate their sustainability efforts to consumers in a credible, verified way.

Engaging the Wider Market

But it doesn’t stop there. While collaborating within the cotton supply chain is key, scaling transparency and sustainability also requires engaging other industry initiatives.

This year, the Trust Protocol has focused on fostering key partnerships to drive wider sustainability progress. These include continuing involvement in ISEAL to progress our assurance approaches and green claims, and refining regenerative agriculture in collaboration with Textile Exchange, Field to Market and the International Cotton Advisory Committee.

Further strengthening our commitment to collaborative action, we also recently announced our membership of the United Nations Fashion and Lifestyle Network which brings together a global network of stakeholders dedicated to driving positive change within the fashion and textile industries. Platforms like this are crucial for sharing information and expertise, and offer a unique space for collaboration from a local to a global scale.

The Path Forward: Embracing Transparency as a Business Opportunity

A transparent and traceable cotton supply chain has a crucial role to play in delivering a more sustainable fashion industry. It is essential for building trust with consumers, meeting regulatory requirements, and driving positive change within the industry. By embracing collaboration, leveraging technology and verified data, and prioritizing sustainably grown cotton, brands can untangle the complexities of the cotton supply chain and create a clear path forward for fashion.

Ryan Seller, senior Media Relations Manager from the  U.S. Cotton Trust Protocol

Brands face growing demand for supply chain transparency in cotton sourcing. Collaboration, data-driven platforms, and verified sustainability metrics are key to building trust and meeting regulatory requirements.
Ryan Seller
December 4, 2024
More traceability, for responsible fashion.