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Traceability Can Drive Fashion’s Transformation. Here’s a Cheat Sheet.

For the modern-day supply chain, the mandate for traceability is clear. Environmental and human-rights due-diligence policies are gushing down the legislative pipeline. In a couple of weeks, the Uyghur Forced Labor Prevention Act will bar any goods produced in whole or in part in China’s Xinjiang region from entering the United States. In the European Union, a crackdown on unsubstantiated green claims will soon be nigh.

“We’re at an inflection point as an industry, where sustainability is evolving from a ‘nice-to-have’ to a ‘must-have’ business imperative; a point at which one’s green line is becoming every bit as important as one’s bottom line,” said Shameek Ghosh, co-founder and CEO of TrusTrace, a traceability platform that counts Adidas among its high-profile clients. “However, with this evolution comes the need for knowledge—on how to most effectively manage this sustainable transformation.”

To help companies distinguish the signal from the noise, TrusTrace linked arms with innovation platform Fashion for Good and sustainability advocacy group Fashion Revolution to create an open-source playbook, one that it hopes will help build responsible supply chains “for a new era.”

Featuring case studies from boldface names like Balenciaga and Gucci, and insights from industry leaders such as the Sustainable Apparel Coalition’s Amina Razvi, Circuthon’s Paul Foulkes-Arellano and Policy Hub’s Baptiste Carriere-Pradal from Policy Hub, the guide serves as a step-by-step roadmap of how businesses can leverage traceability to hit their sustainability targets.

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“Together with some of the most knowledgeable, best-informed minds in the industry, we’ve created a resource for the fashion industry that will significantly support sustainable transformation,” Ghosh said. “Very few businesses have achieved transparency of their supply chains, a task that is infinitely more complicated for larger businesses. Our role is not to judge, but to guide and support our partners through their traceability journey.”

The industry could use all the help it can get. TrusTrace estimates that 95 percent of supply chain information is still tracked manually, meaning few companies have a “single source of truth” regarding a product, material or component’s provenance. But the value of digital traceability data cannot be underestimated, the manual said. According to Bain & Company’s Hernan Saenz, data “allows companies to make predictions, run scenarios, identify unnecessary resource consumption, respond faster to changes in demand and minimize the impact of internal and external shocks.”

There are signs businesses are starting to catch on. Since the start of 2022, TrusTrace has seen a 350 percent year-over-year spike in brand requests for traceability guidance and support. It was this surge in interest that led the firm to conceive of the playbook as an educational tool for the United Nations Economic Commission for Europe’s Sustainability Pledge, a set of policy recommendations and implementation guidelines for measuring and verifying sustainability ​​in the clothing and footwear sector.

TrusTrace estimates that 95 percent of supply chain information is still tracked manually. Courtesy

“Behind the clothes we wear, there are women and men that need to be respected, and deserts, forests and oceans that need to be protected,” said Maria Teresa Pisani, economic affairs officer and project lead at UNECE. “Traceability and transparency are key to ensure that social, human rights and environmental risks are properly identified and addressed along global and complex value chains. It is a starting point to give a face and a voice to vulnerable actors in this industry, and a right move towards responsible choices and circular business models that will drive wrong patterns ‘out of fashion.’”

Not all levels of traceability are equal, according to TrusTrace. There are at least three major routes: supplier mapping, product traceability and material or fiber traceability. But labor rights and worker well-being need to be addressed in tandem with environmental issues, not held apart from them, said Fashion Revolution, which coalesced after the 2013 Rana Plaza collapse in Bangladesh killed more than 1,130 people and injured thousands more.

“A lack of transparency costs lives and in order to achieve accountability, greater visibility is needed to drive industry transformation,” said Liv Simpliciano, the nonprofit’s policy and research manager. Like Pisani, she agreed that transparency is only the beginning, not an end. The way brands disclose how they are tackling some of the industry’s biggest pain points, including, overconsumption, overproduction, decent work, circularity and carbon emissions, however, exposes what is still needed to “catalyze change.”

Sustainable transformation doesn’t happen overnight, but the more accurate and granular the data is, the faster progress can happen, the playbook said. The systemic issues the fashion industry is battling cannot be fought by individuals or single organizations. Neither are traceability providers standalone systems. Rather, they’re part of an expanding ecosystem that incorporates other sustainability solutions and data providers—blockchain, RFID tags, forensic tracers, digital product passports—to pull disparate information into one accessible location.

“Many of us are talking about the issues in fashion’s supply chains, but there are also issues with overconsumption and circularity that we need to address,” said Madhava Venkatesh, co-founder and CTO of TrusTrace. “We all know there are problems, but until data is available and accessible to everyone, we can’t identify them or prioritize them correctly.”

In the coming years, companies will need to focus more on creating data visibility for the end-to-end impact of their choices, Venkatesh said. Brands that do this will not only get closer to understanding the impact of their business but they’ll also be empowered to change it for the better.

“We should be looking at the full cycle from fiber to end of life and back to fiber, considering not only the impact of production itself, but the length of a product’s lifespan before it’s reused or recycled,” he added. “The data about the entire value chain and its impact will be much more transparent and will help drive transformation in a focused manner.”

TrusTrace launched its manual last week as part of the Global Fashion Summit in Copenhagen, where Mulberry announced it will be adding Eon’s Digital ID to all its products by 2025. It will start with its secondhand products, which are part of its Mulberry Exchange buy-back program.

“Digital traceability is a critical enabler for the circle economy, and we believe it has an important role in achieving a just transition and distributing value fairly across all actors,” said Holly Syrett, director of impact programs and sustainability at Global Fashion Agenda, the think tank that organizes the event. “We encourage fashion leaders to work in pre-competitive and cross-sectoral collaborations to achieve this goal.”