When it comes to the constituent parts of our clothes, the world today demands transparency.
But what does that actually mean? Transparency is perhaps best summarized as simply as possible: a high-level openness about the materials, chemicals, manufacturing processes, people, and distribution practices that are involved in bringing a product to market. Where once brands kept that information behind closed doors, in the interests of commercial expedience or brand sensitivity, it’s now expected to be part of the public record.
When that expectation is not met, the impacts on individual brands of an actual (or just perceived) lack of transparency can be severe. And at a whole-industry level, retailers that cannot provide transparency to their consumers, or businesses that leave it under-represented in their contractual B2B relationships, are seen as operating out of lockstep with what the world expects.
But that simple definition belies a great deal of complexity. The metrics that make up the full scope of transparency are ones that fashion, as an industry, has historically either opted not to disclose or struggled to gather due to complex supply chains and the blending of fibers. This complicates what would otherwise be clear-cut opportunities to cater to changing consumer behaviors, as evidenced when we compare data from a 2021 worldwide Cotton Incorporated Lifestyle Monitor™ survey that nearly three quarters of consumers are now willing to pay more for clothes that they perceive as being environmentally friendly, against investigations suggesting that up to 80% of the industry’s emissions are going unmonitored and unreported.
This same disconnect between market expectations and the fashion’s ability to meet them with confident commitments and data-backed disclosures occurs in many other areas, too. According to independent research conducted earlier this year by Fashion Revolution, covering 250 of the world’s biggest fashion brands, the average transparency score is just 23%, leaving more than three quarters of the ideal transparency picture unpainted.
This lack of information and disclosure is not, in and of itself, new. For as long as offshore sourcing and manufacturing has operated, as well as the global supply chains and sourcing networks that contribute to it, businesses and consumers have accepted that a certain amount of that process coverage has to remain hidden and that, as a consequence, there are parts of the makeup of any given product that will not be open to scrutiny by public or partners.
This attitude appears to be changing. On environmental issues, Generation Z are dogged in their desire for improvement – to the extent that they will prefer not to buy from, or work for, organizations that are not seen to be acting on climate change. For these shoppers – who are estimated to make up 40% of the US consumer base – brands must be accountable to the values they publicly promote. And while the firmest commitments to driving change are coming from a younger demographic, armed with universal access to information and the tools to share their opinions globally in an instant, they can have the ability to move the needle for everyone.
At the same time, new regulations are simmering across Europe and in the United States that are seeking to eliminate the same blind spots that shoppers are scrutinizing, and to raise the baseline for the way the apparel industry addresses its environmental and social impact.
And sets of expectations are now, by necessity, being reflected in the way brands and retailers engage with their value chain partners. Armed with the knowledge that new disclosures, and more rigorous versions of past statements and commitments, will soon be essential for selling to conscious consumers and complying with regulations, brands will need to pass those demands up into the supply chain. Where once the provenance of a new fabric shown at a trade fair would have been a secondary consideration, that information may now need to be front and center. What percentage of this fabric is comprised of renewable materials? How much water and energy was used in treating and dyeing it? Can you, the supplier, demonstrate the origin of the fibers?
As the apparel and textiles industries enter what is set to be a landmark holiday season, with consumer spending on gifts up 15% over the 2020 holidays, it’s becoming clear that consumers, regulators, or value chain partners may not accept compromise for much longer where transparency is concerned.
Which leaves those industries with the question of how to weave a thread from clear expectation to more compelling execution. And in this respect, cotton can serve as a template for some of the tools and approaches that brands and retailers can take to replace compromise with confidence.
How traceability underpins transparency
By definition, a transparent supply chain would include the ability for the party making the disclosure to trace the origins of their materials. After all, it would be difficult for an apparel brand to advertise transparency into the parts and labor that make up a particular product without being able to track the provenance of its fabric – something that accounts for a significant part of the product’s final cost, and that has sustainability implications across farming, processing, dyeing and other processes.
Significant strides are being made to enable those disclosures to be made with confidence – especially in the U.S. cotton supply chain, where the production process, from ginning to spinning, is benefitting from significant investment in new processes and technologies that will allow brands and retailers who sell products made from cotton fabrics to have far greater confidence in the journeys their materials have taken from farm to consumer.
While transparency and traceability are often used synonymously, the reality is that traceability is a contributor to overall transparency; to become more open about how a product is made and from what materials and components, a brand must have traceability of those materials and components. This is especially important in the current commercial landscape, where the composition and sustainability profile of materials are key decision-making criteria for nearly 70% of consumers.
Similarly, the procurement of raw materials at the right price, and with the correct level of traceability, is key to developing a smart, sustainable sourcing strategy – something that The Interline and Cotton Incorporated wrote about together earlier this summer, emphasizing the need for any business that sources raw materials to understand the journey those materials take, and to have the ability (and the agility) to adjust their raw material and finished fabric purchasing practices on the fly. And as severe disruption to global supply chains has only become more pronounced in the time since that article was published, the need for brands and retailers to more precisely define the scope and shape of their supply chains has only become more pressing.
Today, the price of raw materials – both natural and synthetic – is approaching a ten-year high, creating a combined environmental and commercial argument for transparency strategies that are built on traceability. With the essential components of the world’s most popular fabrics (including the winter and work-from-home favorite, cotton) being priced at a premium, traceability under the umbrella of transparency becomes a way to establish the key stages of a product’s journey and a tool for monitoring and controlling its costs.
Providing brands and retailers with traceability into the origins of their materials (for both sustainability and profitability reasons) is an area where the U.S. cotton industry is forging ahead, deploying various different technologies to benchmark the lifecycle of cotton fibers and the fabrics that incorporate them. From GPS tracking at the point of harvesting, which provides reliable data on sourcing location and yield, to Permanent Bale Identification tags that allow each individual bale of cotton to be properly classified and tracked from the gin to the mill, the cotton industry is paving the way for setting traceability benchmarks at all the vital stages of a raw material’s journey.
If other material types are able and willing to follow suit, this level of traceability can go a long way to enabling brand and retail businesses to provide the level of transparency that’s being asked of them. But crucially, those demands are not staying static, and the same efforts to make the composition and the journey of cotton products as clear as possible today, is also preparing the industry for the heightened expectations of tomorrow.
Preparing for enhanced expectations
While transparency has very quickly become one of the primary metrics upon which the fashion industry is being measured and has assumed a pivotal importance in both brand communications and operations, this is not the end of the road.
Already, one in three shoppers is choosing not to purchase from a brand about which they have transparency concerns, and nearly half of shoppers want more information about the origins of their products. Combine this with recent data that close to 90% of brands do not currently disclose their raw material suppliers, and the discrepancy between expectation and execution is growing. And while the fashion world has uncovered one humanitarian crisis with direct hooks into the fabric supply chain this year, there are certain to be others, and as we’ve established, consumers and regulators are not likely to accept a lack of visibility as an excuse – underlining the importance of being able to chart the journey of the constituent parts of any given product, to make transparency possible.
And this is only for first-generation products. The same survey revealed that fully half of all consumers want greater clarity on what to do with used garments – something that is likely to have a significant impact on the fast-growing secondary market, where the environmental profile of a garment may be difficult to trace back within a single brand ecosystem, and all but impossible for a multi-brand circular retailer. This underlines the importance of being able to trace the origins of the materials used in first generation products, improving the odds that the inputs to the secondary market will have the right sustainability credentials built in. And for garments that are disposed of, reused, or recycled, the work that has been put in to build a concrete circularity journey for cotton products may give brands and retailers confidence that their products have the best possible chance of a successful second life.
At the same time, new technologies and processes are changing the way we think about sourcing and transparency. The example cited earlier in this article of a material supplier visiting a trade fair could soon be consigned to the history books, as more and more brands look to source through digital material catalogues rather than visiting and engaging with suppliers on an infrequent basis. In that scenario, is the responsibility for ensuring the origins of a fabric on the brand, the supplier, or the digital material sourcing platform that sits between them? Here, the cotton industry is again ahead of the curve, with cotton becoming the first fiber to digitize at the source, and with upcoming announcements that will help to further bridge the gap between digital materials and the journey of physical fabrics.
By the same token, blockchain (which The Interline wrote a primer for in 2020) is often held up as a solution to many of the challenges of transparency, but successful deployments have so far been confined to narrow use-cases, and the promise of a brand building a complete ledger of all the moving parts of a product’s supply chain will be constrained by limitations in visibility at the point of origin. Blockchain has the potential to become a powerful tool for securing and communicating traceability, but it will not build a picture of fabric or product origins by itself – something that remains better suited to smart interventions at the harvesting, processing, and warehousing stages – and beyond.
The word “blockchain” will also potentially give brands pause, as it raises the question of just how transparent they need to be. While regulators and consumers are holding brands and retailers (and, by extension, their suppliers) to account, meeting their expectations does not necessarily have to mean a brand maintaining a fully open book. Certain commercial considerations, negotiations, competitive pricing structures, and other sensitive information will need to remain under wraps.
Broadly speaking then, the question is not whether the fashion industry needs to be more transparent. New baselines are being set by consumers, governments, and business partners on a regular basis, and the transparency trend line only goes one way. Instead, the issue at hand is whether fashion can meet those transparency expectations through its own traditional processes, or whether the industry should embrace new technologies and opportunities.
The cotton industry has already put a great deal of effort into answering this question, bridging the longstanding and widespread utilization of cotton fabric with evolving transparency expectations. That thread between what the world wants to see and what the fashion industry is able to deliver is, The Interline believes, one of the most important there is for empowering brands and retailers with the ability to execute on their visions for a more sustainable, more transparent industry.
About our partner: CottonWorks™ is your go-to textile tool for discovering what’s possible with cotton. From fiber and manufacturing education to sustainability facts to fabric inspiration and trend forecasting, cottonworks.com has the information you need to stay in motion. Questions? Contact cottonworks@cottoninc.com.
