UNDERSTANDING TRACEABILITY

The United Nations Global Compact defines traceability as ‘the ability to identify and trace the history, distribution, location, and application of products, parts, and materials to ensure the reliability of sustainability claims, in the areas of human rights, labour (including health and safety), the environment and anti-corruption’ (Sourcetrace n.d.).

Traceability is a major exercise to ensure transparency in the supply chain, that requires efficient supply chain mapping to track down various modes in the chain. If the products’ or materials’ journey along the supply chain is traceable, this helps understand aspects of both social and environmental sustainability (i.e. human rights, labour practices, and environmental footprint) associated with these products. This then assists in providing a basis to establish credible sustainability by providing reliability to the green claims by the companies (Cottonup n.d.).

Companies use different traceability models to trace their supply chain. Each model has its own advantages and limitations. The Identity Preservation model, for instance, provides traceability back to a single point of origin, from a farm to the final users, and treats certified products separately throughout the supply chain.

The model, however, is expensive and resource- extensive. Moreover, in the certificate trading model, certificates/credits are issued at the beginning of the supply chain. These are tradeable certificates that indicate responsible production. However, this model lacks effective monitoring of data against traceability through the supply chain (Cottonup n.d.).

THE NEED FOR TRACEABILITY

The demand for traceability is rising from both brands and the consumer side. While brands want to know the origin of the products, the conditions where they are manufactured, and their environmental footprint, the consumers are also prioritizing mindful purchasing, where they are expecting the products to not just meet style requirements but also social and environmental sustainability principles.

Further, responsible and ethical production – the key pillar of a transparent supply chain, is a significant requirement from global buyers. For instance, the EU’s traceability and information requirements on products’ circularity and key environmental aspects have clearly received momentum in the recent EU Strategy for Sustainable and Circular Textile.

These regulations will gradually become non-optional for the major textile exporters such as Pakistan and the survival of their export market will largely depend on how effective traceability requirements are fulfilled compared to other regional competitors.

Improvement in traceability is a competitive factor that can bring several benefits to companies. For instance, brands validate green claims of products and practices through traceability data and communicate them to the end consumers, which increases the level of trust and sales and makes the supply chain more secure.

Traceability also improves supply chain management for firms. It confirms sustainable sourcing practices and fulfilment of due diligence requirements; the responsible business conducts all businesses are expected to follow to avoid human rights violations and environmental degradation.

TEXTILE SECTOR FROM TRACEABILITY PERSPECTIVE

Traceability and disclosure of mandatory information is an integral part of sustainability in the textile industry. The textile industry is long criticized for unsustainable practices including child labour, the use of fake organic cotton, and the discharge of hazardous chemical waste.

This is caused due to the complex nature of the textile supply chain that involves numerous stakeholders at diverse levels. Therefore, a strong movement, traceability, is now in the limelight to not only promote eco-friendly practices but also avoid green washing.

The textile sector contributes directly and indirectly to the socioeconomic development of Pakistan. It employs around 45% of the country’s total labour force, contributes 8.5% to the GDP, and more than 60% to the country’s exports. Therefore, the sector’s functioning has gained the highest attention from both brands and consumers regarding whether or not its manufacturing is within the domains of social and environmental sustainability. To ensure this, traceability, as an integrated tool has been introduced and will be gradually imposed to digitally communicate and understand the holistic sustainability information.

Traceability will be a fundamental tool for Pakistan’s textile industry to achieve a competitive advantage and credibility, as it harmoniously supports all sustainability pillars: Ecological pillar, societal pillar, and economic pillar, as described by Kumar et al. (2017).

The ecological aspect of a textile product indicates that three categories, namely, the manufacturing phase, use phase, and post-use phase are associated with the ecological pillar of textile sustainability.

Each phase is linked with complex processes that result in crucial environmental damage and their communication becomes even more challenging. Thus, traceability communicates this information in a holistic manner, that can also be traced back to the original source.

This changes the perception of the consumers who prefer green products in a positive manner, which acts as a catalyst to promote sustainable growth of the textile business.

The societal aspect of textiles includes social transparency in the supply chain. This aspect usually remains hidden from the brands and consumers, who prefer getting more information about how safe textile products are for consumer use as well as whether or not the product manufacturing fulfills human and labour rights.

Therefore, experts suggest traceability as a well-established tool, that provides all information including that regarding cotton cultivation and farming practices, labour practices, and consumer safety (Kumar et al. 2017).

This successfully promotes corporate social responsibility (CSR), which benefits all stakeholders in the supply chain. For instance, as farmers’ data can be traced via traceability tools, they can easily secure contracts and get better access to markets and services such as education (Cottonup n.d.).

The third pillar of sustainability, which is the economic pillar, includes a balance between efficient resource use for economic growth and environmental safeguard for people and species.

Traceability contributes majorly to the economic sustainability of the textile supply chain. Traceability information reduces production-lead time as products can be efficiently located and traced, enhances the visibility of the supply chain to the end-consumers, and improves stakeholder responsiveness that reduces long-term costs associated with unsustainable practices (Kumar et al. 2017).

COTTON SUPPLY CHAIN TRACEABILITY

Traceability in the cotton supply chain has become a mandatory tool to assess the due diligence and sustainability efforts of the textile stakeholders in Pakistan. While some of the leading firms are concentrating their efforts to include traceability in their supply chain, many are lagging behind in adopting this newly-emerged sustainability tool.

For instance, Interloop’s newest technology Looptrace aims to provide end-to-end traceability for cotton-derived products (from the farm level throughout the production process). It is designed to support the stakeholders to trace and access raw material information that is transparent, thus helping them meet SDGs.

Interloop’s vision for transparent sustainable cotton farming via its Looptrace project aims to maximize water efficiency, and soil health, reduce chemical use and improve labour working conditions. The project involves around 8000 farmers who are in continuous engagement through training (Interloop n.d.; Sourcing Journal 2022).

Other companies such as Sapphire and Artistic Apparels have partnered with FibreTrace VERIFIED and climate-positive Good Earth Cotton to make each step of their supply chain traceable and credible (Apparel Resources 2022).

APTMA, Pakistan’s top textile association, has pledged to make Better Cotton the mainstream commodity. It is playing a crucial role in providing training and promoting research on traceability and Yarn Ethically and Sustainably Sourced (YESS) standards in collaboration with WWF, BCI, and NTU (Better Cotton Initiative n.d.).

Moreover, the export and use of high-quality cotton will become a necessary part of the industry’s supply chain traceability in the future. Therefore, APTMA has proposed to the government to support the establishment of the DNA Testing Lab by the APTMA Cotton Foundation (ACF).

This lab will play a crucial role in determining the cotton origin at any stage of the supply chain and help the industry avoid false content claims in the finished products and the associated risks to boost the export-led business.

THE WAY FORWARD

The current traceability progress in Pakistan’s textile sector portrays a blurred picture. While firms are developing their own traceability systems, integrated mandatory provisions for textile supply chain traceability must be adopted, that aim to mandate all textile firms to progress harmoniously towards achieving international standards of traceability.

It is required that the Government of Pakistan makes APTMA Cotton Foundation (ACF – A non-profit organization established by APTMA) the sole agency responsible to effectively trace and record accurate supply chain information. Successful traceability can only be established if it is made mandatory and adopted by law.

A traceability system can only properly function under a central agency from farmers to ginners to spinning mills, manufacturers, retailers and brands acquiring data and tracking with appropriate level of confidentiality to protect the commercial interests of individual exporters.

(The writers are Secretary General and Research Associate – Sustainable Development, APTMA, respectively)

Copyright Business Recorder, 2023