CMiA cotton grown in Uganda

CMiA cotton grown in Uganda

Sourcing cotton more sustainably is increasingly moving up the agenda of global apparel brands and retailers as the environmental and social impacts become ever clearer. However, while many are already working to address these issues, it seems there is much more still to be done.

The supply and demand equation is at the heart of the debate when it comes to sourcing more sustainable cotton. There is global demand for the fibre from brands and retailers, and a desire from farmers to grow it, but production, however, is in decline

At present, around 5-6% of cotton produced globally is from sustainable sources, attendees at a 'Sustainable and ethical cotton sourcing' event in London were told this week. The Better Cotton Initiative (BCI) hopes to raise this to 30% by 2020. But one of the challenges it, and the industry, needs to overcome is the current pick-up rate by brands and retailers, which is currently around 10-15%.

So while retailers are setting some clear standards and commitments, based partially on what they believe consumers want, the industry still requires an investment from them to create that supply and live up to their buying promises.

This could accelerate the pick-up rate, and alongside more education and investment to help farmers realise the benefits of growing more sustainable cotton, could ultimately balance demand with supply.

That, at least, was the message from the UK assembly, organised by Innovation Forum and sponsored by CottonConnect. 

A representative from a non-profit organisation speaking at the event highlighted six current trends:

  • A rise in cotton sustainability initiatives. Companies are starting to set targets, and while the number is still small, it is growing.
  • The use of impact data. While standards are still hugely important for sustainability, there is a growing interest in using data, through lifecycle assessments or footprinting, ie measuring the water and energy usage in producing cotton. This trend is starting to drive procurement.
  • Leading brands are starting to go deeper into their supply chains, tracking down to more transparency, and working to improve social situations. 
  • A rise in pre-competitive collaboration. Brands are looking at how they can aggregate their demand and find solutions.
  • Sustainability standards are working more collaboratively. For example, BCI, Cotton made in Africa (CmiA), and more traditional ones such as Fair Trade.
  • There is an increased interest in closed loop technology and recycling.

Barriers to implementation
So while changes are starting to seep through, ultimately there also has to be a business case for farmers to want to grow more sustainable cotton.

The supply chain doesn't start at the mill, and with cotton treated as a commodity, the people behind the product can often get forgotten. 

In most countries, farmers have a choice every year over whether to grow cotton. But in China it is more profitable to grow sunflower seeds. Likewise, in India, the world's largest organic cotton growing country, erratic monsoons mean a lot of farmers won't plant cotton this year. 

On top of this, farmers are grappling with a range of economic and social challenges, including rising labour costs, access to good quality, non-genetically modified seed, a lack of access to credit, and financial literacy. 

And with only 10-15% of the world's 5-6% of sustainably produced cotton being used, what happens to the rest?

The industry needs to ensure that everything farmers produce is shipped out or used for their own consumption during the dry, unprofitable season, a leading consultant told delegates. More logical thinking is required before we demand more organic cotton.

Forced labour also has to be taken into account. Uzbekistan is an exceptional scenario, but the country's cotton production is controlled by the Government, which issues annual quotas that have to be met. The public service sector is required to play its part in picking the cotton, from doctors to teachers. The alternative? Pay someone else to do it for you, risk being dismissed from your job, or receive a fine from the Government, one NGO suggested. The speaker told delegates the Uzbek Government is in denial that it uses forced labour.

A a different issue plays out in China, the world's second largest organic cotton producing country. Here it is a case of stock manipulation, where a government stockpiling programme has removed much of the excess cotton from the world market, contributing to high prices. Inevitably, this raises the question: why should brands be buying cotton from China?

Dynamic shifts
There are also dynamic shifts at the manufacturing en of the supply chain. Brands have a choice of which fabrics to use, and there has been a switch to a greater use of polyester following a spike in international cotton prices.

However, that doesn't mean consumers don't want to purchase clothing produced using more sustainable fabrics. Shoppers expect more ethical options from retailers and brands, but don't want to pay more.

But this greater expectation on retailers and manufacturers is not translating through to increased revenue. Add to that the "mass balance" approach as a way of saving money, and the challenge is to ensure the consumer buys into the product.

Despite the risks and barriers to sourcing more sustainable cotton for retailers and brands, many have succeeded successfully. A growing number are signing up to the Better Cotton Initiative (BCI), designed to address negative social and environmental impacts of mainstream cotton farming. And among the top ten users of organic cotton, by volume globally, are Hennes & Mauritz, C&A and Puma.

Many retailers are also using technology to connect directly with their suppliers, such as mobile phone monitoring programmes, cutting through the many layers in the supply chain.

Recent research, however, revealed that while a number of companies are addressing issues in their supply chains, many are reluctant to disclose their policies or detail information about their suppliers.

As one leading industry expert told delegates, one of the mistakes many brands make is to assume consumers don't care about how or where their clothes are made. There is no hiding, and social media allows consumers to tell brands where they're going wrong. Brands can therefore be clever about how they highlight the sustainability of their supply chain through story telling.

A need for change
But while gradual change is happening, more work is needed if a larger proportion of the industry is to commit to using sustainably grown cotton. And ultimately, this comes down to traceability, harmonisation, pre-competitive collaboration, and marketing.

A consultant and the founder of a UK-based organic clothing firm explained that organisations need to be louder in advocating the benefits of sourcing organic cotton. Instead, their voices are being drowned out by the conversations around Rana Plaza and climate change. 

Indeed, a representative from a large UK retailer pointed out that the story is important and will get a brand through most campaigns. It is also a good way to get buyers engaged. And if you don’t tell the story, NGOs will tell it for you.

One speaker suggested that attaching more data to clothing might increase the levels of awareness among customers about sustainably grown cotton - and may prompt them to look at what they buy and who makes the most sustainable clothes?

Engaging with, and pressuring, governments is also key. It has worked well in other sectors, but it is crucial to get governments involved in cotton growing countries. The flipside to this, however, is that in some developing countries governments have little capacity and independence, with money often received through aid and donors.

The market can also be a driver of change. The eventual phasing out of BPA in baby bottles in the US was not through legislation, but through market pressure. The market can demand that products are not made using cotton from Uzbekistan, for example.

And then of course, it comes back to traceability and transparency. Ensuring you know your fabric mills and who grows your cotton. Tied in with that is aligning the conversation with your procurement teams, and forming strategic partnerships in order to support more sustainable cotton production. 

One NGO believes there needs to be less hesitation from brands and manufacturers when admitting there is a problem in the supply chain, so organisations can engage with them and help resolve the issue. This is where multi-stakeholder initiatives can come in to play.

Key lessons learned
Lack of information, lack of knowledge, and not having a proactive plan of engagement with the supplier base can all result in chaos across a supply chain, one speaker concluded. 

Key learnings therefore fall into five categories:

  • Scale versus impact: consider whether you're trying to achieve either, or both;
  • Consumer demand, knowing what information millennials want;
  • Integrating sustainability into business as usual;
  • Pre-competitive collaboration: knowing there is no one standard that is right for every brand; and
  • Engaging with your supply chain, knowing who your mills and farmers are. 

It is clear that good things are indeed happening, and commitments are being made. But no one standard will create sector-wide change; this will take time and effort from all sides. Demand for organic cotton continues to outweigh supply but, if a balance can be struck, the significant social and environmental impacts across the supply chain could potentially be minimised.