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The Current Sourcing Model is Inherently Unsustainable

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Sustainable sourcing seems to be what most modern-minded businesses now strive for, but many won’t attain it despite their best efforts because the rules of the sourcing game nurture unsustainable practices.

In a poignant talk at the Textile Exchange Sustainability Conference Tuesday, instead of looking wide-eyed out at the horizon of glowing possibility for sustainability, NewForesight CEO Lucas Simons said plainly: the industry has it all wrong.

The apparel and textile industry—whether knowingly or not—is driving unsustainability and the sector is “stuck,” Simons said.

There are four key concepts to consider that drive unsustainability in a sector: what are the barriers to enter and succeed? What do markets reward? What is the enabling environment? And what are the alternatives?

Using the fiber sourcing end of the supply chain as an example, Simons questioned: If anyone can be a farmer, markets go for the lowest price and there are no alternatives, how likely are sustainable business practices?

Likening the supply chain to a game of Monopoly, Simons explained how, no matter what, the game always has one winner and the rest losers. And though the loser might feel a bit better if you throw them some extra money or give them a hug, they will still be the loser of the game.

The same goes for farmers.

If more retailers and their consumers want more organic cotton but they aren’t willing to pay more at the stores, which means they’re not willing to pay more to the farmers, the farmers lose whether or not they get a kickback or a subsidy here or there.

“If you claim sustainability on one side of the vale chain but the farmers are far below the poverty line, that’s not sustainability. In fact, it’s driving economic suicide,” Simons said. “There are no simple solutions when the game is set. You can only, if you want a different outcome, change the rules of the game.”

The organic cotton sector thinks that if companies buy more organic cotton, issues will be solved, but it doesn’t quite work like that.

“The demand for organic cotton is in a huge lift, congratulations,” Simons said. “But at the other side of this value chain, it is not going that well.”

Organic cotton farmers hardly make any extra money for their sustainable farming. In India, the average organic cotton farmer makes 70 cents a day, Simons explained, and it’s the second poorest sector in the world. There is no motivation to farm organic cotton.

“Farmers are doing anything but organic cotton and I don’t blame them,” Simons said, adding that many of those farmers think: “Why go through all this trouble so someone at the end of the value chain can claim organic cotton when we are living in poverty?”

It’s not just about buying more organic—the industry needs to be smarter.

Sector sustainability moves through phases of maturity, Simons explained, and right now we are in the baby phase, with massive amounts of projects around sustainability but most of us, as Simons put it, “don’t know what we are doing and are just putting stuff in our mouths.”

From all of those individual projects comes a proliferation of standards and platforms, which becomes so overwhelming that websites pop up with the goal of telling us how to understand the plethora of platforms we think are helping us create a more sustainable sector. But because each company or organization or project believes it has to show what it can do to “save” the sector, that is the teenager phase where everybody wants to “win” on sustainability.

“It’s great, it’s progress, until it becomes too many standards,” Simons said. “Everybody has their own thing and we are competing on sustainability.”

In the young-adult phase, companies and organizations start to understand the need for non-competitive collaboration, to work together.

In short, the sustainability sector has a lot of growing up to do.

“The enemy of all this are projects, everybody doing their own little things on their own little islands,” Simons said.

Organic in a vacuum means very little. What’s needed, he explained, is one truly strong roundtable representing all of the industry’s major voices, that can develop one sector vision and agenda, link their sustainability initiatives and come up with incentive mechanisms that will drive progress.

There should be a global strategy and national implementation. Standardized key performance indicators and national coalitions that can unite around what to do in each different country to advance sustainability would also help.

And lastly, the sector, as any other, needs to constantly be learning and improving, benchmarking efforts and sharing those lessons at the roundtable for feedback on the sector’s vision.

None of those tasks will be easy, and some may not even be likely, but the sector has a lot of opportunity if it can find a better way to organize itself, Simons said, adding however, “At this moment, you’re behind.”

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