Due-Diligence: The Cotton Supply Chain - Be prepared!

Due-Diligence: The Cotton Supply Chain - Be prepared!

There is increased pressure from governments and regulators to ensure products are compliant with both social and environmental standards. Within specific jurisdictions globally, legislation governing supply chains is continually emerging and being revised, many of which follow a similar pattern regarding supply chain traceability:

 

  • Understanding and mapping the origins of materials and chemicals used in a product
  • Once identified, undertaking risk assessments of suppliers and materials within the supply chain
  • Implementing appropriate corrective actions and governance practices, as part of an ongoing due diligence process

 

The Cotton Industry

Cotton is a high value commodity in the textile and personal care sector. It is reported that 26 million tonnes of cotton is produced globally each year, with the market valuing a total of $38.54bn at the end of 2020.  In regions where it can be grown, cotton farming and the associated production processes are a significant contributor to global economies. Reported figures suggest there are as many as 100 million households that rely on cotton production to make an income, and it is estimated that around 350 million people are involved in the cotton sector in some capacity.

Cotton production has faced enhanced scrutiny as society becomes increasingly aware of the various social and environmental challenges associated with its production, therefore, the need for responsible and sustainable sourcing is in greater demand. 

 

Cotton Traceability

Understanding the origin of cotton holds significant commercial value, as it enables brands to assess the potential risks to which they may be exposed.

Transparency in your cotton supply chain can help you to understand, address, and mitigate risks associated with the industry including (but not limited to):

 

  • Drought
  • Pollution
  • Greenhouse gas emissions
  • Soil degradation
  • Labour and local communities

 

Many initiatives within the fashion industry are seeking to improve supply chain visibility which promotes sustainable production for apparel, footwear, and home textile industry. Therefore, action needs to be taken at every step of the supply chain and to follow the information from source to store.

Particularly for cotton, visibility and management of the supply chain down to raw material sourcing is becoming increasingly important within the context of legislation compliance, non-government organisation (NGO) scrutiny, product quality, and brand reputation.

 

How to Implement Cotton Due Diligence

Whilst specific customs and border protection authorities demand slightly different documentation, a cotton due diligence program will typically require evidence of a mapped supply chain, supported by cotton testing, and where appropriate, engagement with supply chain through on-site audits.

Eurofins l BLC have created a 4-stage Cotton Due Diligence Program to support brands to meet the new and upcoming legislation, and to highlight, address, and mitigate risks associated with the cotton industry.

 

Stage 1: Supply Chain Mapping

Eurofins | BLC’s Risk-Mapped Supply Chain service enhances upstream visibility over a supply chain back to raw material origin. Working directly with brands, retailers and their suppliers, Eurofins | BLC collect, validate, and plot information, forming visual connections between suppliers using market leading geographic mapping software.

 

Stage 2: Risk Assessment

Through the use of recognised global indices, the environmental, social, and governmental (ESG) risk locations are assessed. Additionally, environmental and social compliance certifications held by suppliers are investigated. This approach helps identify potential risks, and what suppliers may be doing to mitigate these risks. Recommendations are provided to manage risks where sensitivities are identified and corrective actions are highlighted.

 

Stage 3: Cotton Isotope Testing

Cotton isotope testing is used to validate the suppliers' claimed cotton origin (from a responsibly sourced region) as identified in the supply chain mapping exercise. Cotton isotope testing is a method used to verify the origin of cotton fibres by testing a sample from a supplier against a reference sample taken from a known geographical location. The testing involves analysing the isotopic composition of the cotton fibres through a series of tests, which can reveal information about the environmental conditions in which the cotton was grown.

 

Stage 4: Audit Inconsistency

In the absence of positively validated claimed origin via isotope testing, for example in instances where inconsistencies between supply chain mapping and isotope testing are identified, on-site audits are recommended. A recognised social compliance audit at the production site should be undertaken which can be done either by the supplier arranging their own independent third-party social compliance audit from a reputable and recognised provider, the brand performing their own audit, or Eurofins supporting with on-site audits.

 

Contact Us

 

To find out more email [email protected] or telephone +44 (0)1604 679999 and one of our experts will be happy to help.

8 August 2023

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