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How Physical Traceability Protects Brands from Reputational Risks

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As the demand for sustainability increases, so does the interest in passing off goods with fake green credentials.

Last year, Global Organic Textile Standard (GOTS) revealed it had uncovered falsified organic cotton certificates in India. And within the auto industry, a U.S. federal court slapped Volkswagen with $2.8 billion criminal fines in 2017 for cheating on emissions tests.

Even if they aren’t falsifying results or certifications, companies can face accusations of greenwashing if they don’t deliver sufficient data to support their sustainability claims. In 2019, the Norwegian Consumer Authority criticized H&M’s Conscious Collection, saying the fast-fashion retailer didn’t provide enough specific information about the line’s material content and environmental benefits.

“Organizations are conscious of the consumer appetite for green solutions,” said MeiLin Wan, vice president, textile sales at Applied DNA Sciences. “The incentive and pressures to make sustainable material claims are real. The question is what information, if any, is provided by organizations to substantiate their claims.”

Fashion firms have committed to using polyester from recycled rather than virgin materials, but tracking whether synthetics are actually recycled—and what portion is recycled—can be challenging. Further, not knowing exactly from where leather, down, or feathers originated could leave brands exposed to animal rights abuse allegations.

With brands’ reputations on the line, they need more than just paper proof or a digital chain of custody to back up their claims. Enterprise resource planning (ERP) and blockchain solutions intend to create a single source of truth, but data entered into these systems can be false or error-ridden.

“A true traceability solution is only as good as the data it provides,” said Wan. “Current methods of transaction certificates and paper trails are ripe for fraud. Paper documents can be digitally manipulated and therefore are not secure instruments for product authentication.”

Providing an alternative, physically tracking materials starting from the source gives brands a clear conscience and lets them confidently share information with their customers. Applied DNA Sciences’ CertainT® platform uses DNA tags duplicated using polymerase chain reaction (PCR) to microscopically mark raw materials. In fashion, this includes inputs such as cotton, recycled polyester, leather, down and feathers, as well as thread and coatings. As materials travel through the supply chain, companies can test these molecular tags to verify the identity of inputs in a finished good, tracking authenticity from origin to retail.

Fighting fakes

Sustainability imposters are a prime concern, but counterfeit merchandise also poses a threat to brand reputation. Between the rise of e-commerce marketplaces and the growing ease of producing fakes, brands’ intellectual property risks have escalated. Counterfeits can also slip back into the commerce chain via fraudulent returns.

Europe’s Office for Harmonization in the Internal Market found the E.U.’s fashion sector loses about 26.3 billion euros each year to fake goods, representing around 10 percent of the total market size. Consumers expect brands to act; 69 percent of shoppers in an Incopro survey said it’s a company’s responsibility to protect them from fakes. Should a customer unwittingly buy a counterfeit, it could damage trust and brand loyalty.

“While branding can be a means to gain consumer loyalty, there are any number of threats that can diminish brand reputation, which may be one click away,” said Wan. “The stronger the brand, the greater the risks.”

A brand that understood the need to protect its reputation and intellectual property early on is Caverley Shoes. Founder and designer Sara Caverley, who has been in the footwear industry for more than 10 years, has been through her fair share of supply chain issues and even discovering counterfeits of her designs. She and her team decided to act by utilizing American & Efird’s INTEGRITY™ ECO100 thread powered by CertainT® in their upcoming collections.

“It is essential that Caverley Shoes can be traced throughout the supply chain so that we can ensure we are delivering the very best to our customers, which includes our raw materials such as high-quality leather,” Caverley said. “We also needed a reliable and efficient way to properly detect counterfeits, keeping our customers and our brand safe.”

Caverley Shoes

Photo Credit: Caverley/Courtesy

Aside from protecting intellectual property theft, this molecular tagging technology has been used across Europe to help protect thousands of cash-in-transit operators and ATMs from criminals. To date, there have been 147 criminals who have received sentences of more than 720 years, with many cases still being processed by the courts.

In prior years, in Sweden, German automaker BMW had also used molecular tagging to mark cars with DNA as an anti-theft measure. This traceability could assist authorities to investigate and litigate cases.

“Trust, in any consumer-brand relationship, is not just about buying and selling products but connecting with the customers through product quality, performance, and those intangible brand attributes,” said Wan. “Our CertainT® partners apply our molecular solutions in innovative ways that fit with their brand promise.”

Click here to learn more about Applied DNA Sciences.

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