The U.S. ban on cotton coming from Xinjiang has shown again how important supply chain transparency and proof of origin is. But fragmented textile supply chains make it challenging for brands to maintain material transparency and traceability, from fiber production to retail. Meanwhile, supply chain disruptions caused by Covid-19 made brands aware of how important supply chain transparency beyond tier 1 is to risk assessment and mitigation.
Award-winning Swiss technology company Haelixa has developed a technology based on DNA to mark, trace and authenticate products from source to retail, working across industries like fashion and precious metals.
Gediminas Mikutis, CTO and co-founder of Haelixa, spoke with Sourcing Journal about how they solve brands’ increasing need for supply chain accountability.
What are the challenges and repercussions for brands that don’t or can’t validate their materials?
The demand for accountability across the complete value chain is quickly taking central stage both in the minds of end consumers and in the government agenda. There are new regulations on national and European levels that hold brands directly responsible for violations that happen in their supply chain. In the U.S., due to the ban on cotton coming from the Xinjiang region, multiple brands have had difficulties importing goods when they couldn’t clearly verify and prove product origin. We have also seen brand images damaged and consumer boycotts when brands have been linked to human rights violations in their supply chain.
Haelixa physically tags a garment or material. What is the advantage of that versus a more digital approach to traceability?
Digital tools such as blockchain are only as reliable as the data uploaded into them. If the textile product is blended or exchanged across complex supply chains, blockchain alone would not detect it. At Haelixa, we turn the product itself into the carrier of information about its origin and journey along the supply chain. We develop a unique DNA marker for every producer, product or batch, then directly apply it to the fiber at the beginning of the supply chain. The verification is done with a PCR test—the same used to detect Covid-19—on the final garment or intermediate product. For security, to detect the initial marker you need a unique counteragent that works as a key-lock-system. This makes the technology fraud-proof and provides reliable data.
While Haelixa’s DNA tracing works on synthetics, consumers have an additional environmental concern for natural fibers. How does Haelixa’s GOTS approval work to your advantage here?
It is imperative that adding physical markers to a textile product doesn’t compromise its quality, processability or sustainability footprint. The Haelixa DNA markers are harmless for humans and the environment, free of toxic chemicals and heavy metals, GMO-free, and compliant with Standard 100 by Oeko-Tex. The markers are also a GOTS-approved input, allowing their use in organic textiles. Some other physical traceability solutions use synthetic fibers and even heavy metals, which contradict consumer desires to buy organic textiles. Haelixa does not affect organic claims and provides forensic proof that a product is coming from an organic-certified supplier.
The United Nations Economic Commission for Europe is developing a blockchain traceability tool for the supply chain. What is Haelixa’s role in that?
On May 20, 2021, UNECE launched “The Sustainability Pledge” to promote measurable and verifiable sustainability in the garment and footwear sector. We have been on the expert panel since the beginning and contributed to the framework initiative. In a pilot project to physically verify product claims, Haelixa is now providing DNA markers to physically verify the information related to product origin, sustainability, and quality that is then uploaded on the blockchain.
How long until traceability is table stakes in the apparel industry? What will it take to make it mainstream?
As with any innovation to be accepted, the technology must solve an existing problem and provide a clear benefit. With the new supply chain regulations, it can be risky for companies without reliable data to prove where their products came from and what journey they took. Offering transparency through traceability also creates a consumer-facing benefit for brands, protecting their reputation among consumers who demand to know who made their clothes/fabric and under what circumstances. For suppliers, traceability offers a competitive advantage, allowing them to become a preferred supplier, attract new customers and ask for a premium price.
Increasingly, investors and stockholders are evaluating companies based on their ability to mitigate risk. How does a technology like yours make fashion brands more attractive?
Indeed, supply chain resilience and sustainability are becoming megatrends for investors not only to reduce risk, but also to generate competitive returns. A CSRHub study of over 1,000 large companies (over $1 billion) proves the increasing connection between sustainability performance and brand equity. Haelixa’s physical traceability technology provides forensic proof that a product is what it claims to be, thus improving supply chain resilience and supporting brand and manufacturer sustainability declarations—from fiber production (or recycling) to finished goods.
Greenwashing is rampant in the industry. How does employing a traceability technology keep every node along the supply chain accountable to each other?
To make claims about sustainability of production across the supply chain, it is necessary to have traceability first. Physically marking the product and tracing it across different processing steps allows brands to forensically link the finished product to the origin and quality of the raw material and processes used to produce it. Verifiable and traceable data is the key to avoiding greenwashing and building credible product claims.
To learn more about Haelixa’s traceability system, click here.