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H&M Transparency Lead Says Traceability Could Boil Down to Blockchain

With great size comes great responsibility, and H&M has been taking that to heart as it tries to lead the apparel industry toward a more sustainable and transparent future.

Speaking during a recording for the Fashion Is Your Business podcast at the Retail Innovation Lounge at SXSW, H&M’s transparency and Higg Index project manager Nina Shariati said the company has mapped out all of its tier one suppliers and has gotten through roughly 60 percent of tier two. H&M works with between 2,200 and 2,500 suppliers altogether, including primary and secondary.

Despite H&M being the first fashion company to make its supplier network fully public and receiving top marks in transparency by Fashion Revolution, apparel companies overall haven’t been quick to follow this lead, and Shariati suspects there are two factors at play. While some companies may be hesitant to expose their business intelligence to the public and competitors, Shariati said that most likely don’t want to face the kind of scrutiny that H&M now has to deal with, though she noted that being in the spotlight “keeps you on your toes and pushes you to be better.”

Still, that kind of overt examination can be detrimental in a sense. “If you constantly scrutinize the same companies who are trying to make a change and being open, it sends a signal that it’s better to hide in the shadows,” she said. “It doesn’t send a very positive message to other companies thinking of being transparent, that they’ll face the same time of scrutiny.”

Combating the idea of doing “transparency for the sake of transparency,” Shariati said H&M made its supply chain public to serve consumers. “You don’t want to drown consumers with a lot of information without creating that impact,” she explained. To that end, H&M is working on the traceability factor so consumers can follow each product as it evolves from, say, a boll of cotton to a thread to a fabric and finally into a finished garment. Documenting these complex networks and processes is where the real challenge lies, Shariati said, though technology—blockchain and RFID in particular— likely could help to solve some of these pressing industry needs.

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What makes traceability so taxing is the enormous task of securing all of the data involved, and ensuring that only trustworthy, accurate data is being gathered in the first place. “You need a lot of support from your suppliers and theirs, and that’s an area where blockchain could potentially support,” Shariati said. “That said, blockchain is still a technology, and normally with technology you need a lot of process and understanding of how you need to change behavior and incentivize information [being input.]”

The need for fashion to wake up to the reality of its environmental and social impact grows more urgent by the day. By 2030—which is “just around the corner,” Shariati said—the UN predicts the global population will swell to 8.5 billion, with another 3 billion added to the middle class, for a total of 5 billion. So in 12 years will we have shifted behavior in the sense that we wouldn’t want to feel good, look good, dress well, travel? [The new middle class] wants to spend,” she explained.

In short, fashion cannot afford to remain linear when a circular future beckons. “No business can survive if they don’t start looking into these [issues] and realize that something needs to be changed for them to survive and thrive and expand,” Shariati said. “A lot of innovation is needed to help this equation come together.”

Garment and textile recycling has been a big push for H&M. Not only has the company partnered with Worn Again to tackle the challenge of separating polyester and cotton fiber from fabric blends, by H&M Foundation innovation lead Erik Bang spearheaded a similar project with the Hong Kong Research Institute of Textiles and Apparel (HKRITA) to develop a similar poly-cotton separation technique. One year later, HKRITA has a viable solution and is looking to scale as it sets up a factory and plans to make its approach open source by 2020, Shariati said. “This is the impact of innovation when it’s focused and backed by will and budget and money.”

By 2030, H&M plans to source only sustainably produced materials, and it’s on track to meet its 2020 goal of using all sustainably sourced cotton, Shariati said. It takes a concerted group effort, especially in a company of H&M’s size, to make transparency a reality. “The amount of support I get within the organization to make the changes needed is amazing,” she said. “It’s not being done by sustainability people, it’s actual business people coming up with solutions.”