Blockchain technology has been used to help track Mongolian cashmere from origin (shearing at herder household) to destination (a processing facility in Ulaanbaatar) in a bid to increase transparency and create a more sustainable supply chain.
The effort is part of the United Nations Development Programme’s Sustainable Cashmere Project, and uses Convergence.tech’s Ethereum blockchain solution, Backbone.
Mongolia was selected as herders face income instability and uncertainty and are often indebted to intermediaries for cash advances; there’s a lack of agreement on sustainability and chain of custody processes; and grazing lands are rapidly degrading, threatening the viability of the entire industry.
In addition, the sector requires more sustainability and traceability due to several factors including the decreasing quality of cashmere in Mongolia, due in part to climate change; a rise in demand for ethical and sustainable sourcing from both consumers and businesses; and for proof of sustainability claims.
The Mongolian pilot employed easy-to-use technology to allow farmers to track their cashmere. Convergence developed an intuitive mobile application for Android devices, which enabled farmers to register their cashmere bales and subsequently see a ‘pin’ on the map showing exactly where the cashmere was sourced. “The origin cannot then get questioned, which is of enormous benefit to both the herders and the consumers,” Convergence says. The bales and packing slips also had high-frequency RFID tags attached to them.
This technology helped to mitigate risks by eradicating the traditional manual processes that were time-consuming and prone to human error.
The Backbone blockchain provides a number of benefits, including complete visibility of the critical path through the deployment of trusted and accurate data, allowing buyers to identify the source of their cashmere. Connecting sustainability and environmental impact data also enables ethical raw cashmere sourcing decisions, it can help to connect buyers with sellers who follow sustainable practices, and also creates a channel for targeted incentivisation schemes to reward herders for following sustainable practices.
The project resulted in significant quantities of cashmere getting tracked across three provinces in northeastern Mongolia, from origin to processing. The pilot has now been extended to enable the training of more local partners who will track 150 bales of cashmere totalling over five tonnes.
The data produced by the cashmere project will be invaluable, especially for luxury apparel companies keen on sourcing sustainable cashmere.
“Chami Akmeemana, CEO of Convergence.tech, says: “The nomadic community is one of immense pride but one with a volatile and unstable income. Leveraging blockchain technology within the transformation of the cashmere industry can provide numerous benefits for Mongolian herders, buyers, and sellers alike.”