Lucy King of the Beyond Sustainable Retail Group presented research on Australia’s cotton traceability system at the Australian Cotton Conference earlier this month. Photo: Cotton Australia

PRELIMINARY findings from a research project into the system for tracing Australian cotton through the supply chain has identified gaps which could be hindering growers and brands from fully benefiting from sustainable practices.

Beyond Sustainable Retail Group strategic advisor Lucy King gave an update on the project at the Australian Cotton Conference held at the Gold Coast last week.

She said the project was launched in June, and coordinated by Cotton Australia with support from the Cotton Research and Development Corporation and the Queensland Government.

The aim of the project is to investigate and trial at least one traceability solution for the Australian cotton market.

It is hoped that a solution identified following the initial research will be trialed during the upcoming cotton season.

Ms King said work to date has involved visiting growers and ginners and interviewing representatives from across the supply chain, including merchants, spinners, brands, retailers, and industry groups, as well as reviewing relevant legislation.

“Those interviews were about understanding the existing processes and systems that are used in the industry to trace Australian cotton and understand what the pain points are,” Ms King said.

“We also asked stakeholders to share with us what they thought the minimum requirements should be of a future traceability solution.”

Ms King said compared to global competitors, Australia was “in a strong position” regarding traceability.

“We’ve got a good foundation in place for tracing Australian cotton right down to the GPS location on farm using the RFID technology that’s attached to the round modules during the picking season.

“We’re then using the bale ID numbers to trace the cotton from gin to export.”

She said while the current system was a good starting point, there was “still room for error” in correlating data due to “a number of inconsistent and manual processes for sharing and uploading of data”.

Ms King said there was a gap when it came to growers and merchants seeing a return on investment in traceability technology and practices.

“We were hearing stories on our field trip where gins and merchants had invested in offering traceable and sustainable cotton through the adoption of physical traces, that was a significant investment…and…they’re actually in many cases ended up selling the cotton as conventional cotton.”

The research also uncovered the issues with tracking the cotton once it arrived at the spinners, and that was were current systems “lost control” of the lint.

She said on top of these concerns, stakeholders expressed concerns with the paper-based Cotton Australia licensing system, and many were turning to alternative digital systems to ensure accurate verification.

“We heard loud and clear from again a number of stakeholders across the chain that the existing processes for verifying Australian cotton are highly resource intensive and they’re not nearly robust enough.”

Possible traceability options

Cotton Australia currently has a barcode-based traceability system. Photo: Lucy King

As part of the interview process, stakeholders gave suggestions on minimal needs for a future traceability solution.

Ms King said they included that a system should: apply to all Australian cotton; be digital and easy to use; and should work with or incorporate existing programs.

“We heard that there’s a real opportunity here in efficiency gains through digitising a number of the processes that are already in place for tracing Australian cotton.

“There’s an opportunity here to protect the premium in addition to managing risks around market access.”

Cotton Australia system

Cotton Australia currently has a framework for tracing cotton from farm to the spinning mill using unique identifiable barcodes attached to each bale.

This barcode identifies where the bale was ginned and the area it was grown.

However, this system ends when the cotton is spun, with the onus placed on brands to trace the fibre to the garment stage.

Knowing the exact origin of the garment is further complicated as the fibre is often blended with cotton from other countries.

This issue has proved a major problem for many traceability systems around the world that are attached to a single bale.

Recently this has led to claims of “greenwashing”, resulting in the anomaly that ten times more organic cotton is sold than grown.

Importance of traceability

Alongside the marketing benefits of having a robust traceability system, several speakers at the Australian Cotton Conference highlighted the impending legislative requirements which necessitated a reliable, data-driven framework.

Debra Guo (right) presenting at the Australian Cotton Conference. Cotton Australia’s Brooke Summers (left) facilitated the session. Photo: Cotton Australia

Textile Exchange Cotton and Crops Lead Debra Guo told the Australian Cotton Conference that the European Union was leading the charge when it came to legislating sustainability standards for brands, and reducing greenwashing.

She said policies such as the EU Commission’s 2030 Vision for Textiles, the EU Corporate Sustainability Due Diligence Directive and the Green Claims Directive will impact brands globally.

She said they will require brands to collect data on supply chains, environmental impacts, human rights as well as ensure sustainability claims are specific and backed by evidence.

Ms Guo said consumers were also increasingly scrutinising sustainability claims of brands.

“Companies must be able to verify the source of the materials that they are using,” Ms Guo said.

“[T]raceability is ever more important, not just for compliance but for meaningful target-setting, and also for customers to have confidence in the products they’re buying.”

She said the industry was now asking for more data from growers, “such as soil health, biodiversity and human rights”.

“We are also seeing more collaborative sourcing models approach emerging with brands wanting to work directly with farmers understanding the challenges and needs and finding other ways to financially support transitions or adoption of more sustainable practices.”

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