“Rebuilding Trust” was the theme of the World Economic Forum’s recent annual meeting in Davos, Switzerland. It couldn’t be more pertinent. Amid ongoing economic and geopolitical turmoil, public distrust in institutions and companies is growing.

In this context, multinational companies must regain the trust of their customers. In many cases, particularly for those in the fashion sector, that starts with greater transparency around their global supply chains.

The growing awareness of consumers about environmental and social issues means they’re unlikely to align themselves with brands that are known to pollute rivers, drive up greenhouse gas emissions or fail to pay their workers properly. Companies have a responsibility to provide that assurance and to evidence it with accurate and verifiable claims.

Moreover, new sustainability regulations are mandating that companies take responsibility for their supply chains. A proposed bill in the U.S. — the New York Fashion Act — aims to hold major clothing brands accountable for their environmental and social impacts. In Canada, the Forced and Child Labour in Supply Chains Act has just come into effect. And in the EU, the new Corporate Sustainability Due Diligence Directive requires businesses to address the adverse impacts of their operations throughout their global supply chains. Other such laws are duly expected around the world.

To meet changing consumer expectations and comply with new sustainability laws, traceability in the supply chain is key. Whilst the complex global nature of the apparel industry supply chain makes this a significant challenge, it’s something we at CottonConnect have been working on for well over a decade, supporting international brands such as Mark’s, C&A and The White Company to achieve greater transparency in their cotton supply chain through our traceability platform, TraceBale.

Cotton is a useful example to highlight the challenges of supply chain transparency in apparel, as it goes through so many processes and stages before reaching the end consumer. After harvesting, cotton undergoes ginning, spinning, dyeing and garment production – typically in different locations. Considering that nearly half of all textiles are made of cotton, the result is a vast and intricate global web of producers, suppliers and intermediaries.

To untangle this web and support brands to provide the level of transparency expected and required, three core elements need to be combined.

Building Relationships

A more transparent supply chain should always start with building trusted relationships across every link in the chain. In the case of cotton, that means from farmer to garment manufacturer. Regular and open dialogue between these various stakeholders will not only strengthen relationships, but allow brands to spot potential threats or challenges in their supply chain and take action to address them.

People are also essential to ensuring that traceability technology is utilized accurately and effectively. Open conversations about the value of traceability across the supply chain are likely to create greater buy-in for the application of technology, so that data is inputted in a timely and accurate manner, and brands can trust that is happening.

Embracing Technology

Traceability platforms have been around for some time in the apparel sector, but recent advances in technology are now offering an increasing range of tools and functionality. On the digital front, they allow fashion brands and retailers access to information that enables them to undertake real-time monitoring and tracking across the supply chain. In this way, companies can gain an improved understanding of the movement of goods — from raw materials to end products — and the ability to better support their suppliers. 

There are also physical tools that can provide businesses with a secure way of identifying and authenticating all materials and products. Until fairly recently, it was particularly difficult to trace raw materials such as cotton right back to their origin at the farm, but we’re now able to employ identifiers such as holograms on cotton bales, QR codes from farmers, and even DNA-based markers. These work by giving every batch of raw material or product a unique, unalterable signature that can be traced across the supply chain, matching them to specific claims around origin, quality and sustainability criteria.

Forging Collaboration

Alongside new technology and strong supplier relationships, collaboration is the final piece of the puzzle. The problems we face in the apparel sector, as with many other sectors, are systemic. No single brand, retailer or manufacturer can solve them alone. In a disrupted world – in which misinformation is a rising threat – cooperation is the only way to create a new and more open way of doing business. Partnerships with accredited NGOs, academic bodies or membership organizations dedicated to solving sustainability issues are crucial to the urgent transformational change we need. 

As things stand, the fashion industry still has a long way to go toward being more transparent. Only a third of the top 100 clothing companies track their supply chains, according to a study from the United Nations Economic Commission. More than two-thirds (69%) find the fragmentation and complexity of the global business network a key obstacle. To rebuild consumer trust, and meet new legislative requirements, this must change. And fast.

Alison Ward is chief executive officer of CottonConnect.