Image: The Story of Silk, from Eileen Fisher's "Ampersand"
Learning how to Differentiate
This month we launch the next topic in our Collaborative Learning Series. This topic introduces the idea of Holistic Value Chains and explores how to go from supply chain anonymity towards more transparency and visibility. We will look into the opportunities this sort of "knowledge" provides and how apparel / footwear brands and retailers can benefit.
Will Fiber follow Food?
Many of us in industrialised society are seeking a greater connection to the food we eat, and prioritising locally grown, organic, and fairtrade products. After decades of enjoying conveniently processed and packaged food we are starting to question the compromise we are making, our loss of knowledge about where our food comes from, and the diversity of varieties and flavours we once so much enjoyed. The odd scare along the way, such as the recent horse meat scandal in the UK, only adds to our conviction.
These days more of us want to know where our food comes from, who is growing it, and what is being done to protect the environment.
The big question is - will our clothing follow suit?
The origins of our textiles and improved livelihoods of farmers are definitely climbing higher up the agenda. Some companies are beginning to use these narratives as a mark of reputational differentiation. Think: the recent PUMA and Diesel/EDUN collections from Africa, Eileen Fisher's Ampersand insights from their sourcing countries around the world, Vega's partnerships built on solidarity with small scale organic cotton farmers and rubber tappers in Brazil, and Icebreaker's clever "baa" coding. To name but a few.
Whether or not the consumer makes the same connection with their clothes as they do with food is yet to be confirmed. However, in an age of globalisation, the internet, and wifi, there really is no excuse for brands and retailers to draw a line round their own operations and first tier suppliers. The scope of impact has got to be considered right back to the raw material production. If work to improve company sustainability is going to genuinely succeed all operators along the chain will need to be open to increased transparency, and shared responsibility.
"There is no doubt that companies need to know who they are working with and deepen their identity from the shop front to take in the entire chain including the farmers or raw material suppliers’ right back at the start." Simon Cooper, Chair, TE Europe
Ignorance Is Bliss - But Enlightenment Is Upon Us
As apparel and footwear brands and retailers, you are faced with a barrage of sustainability agendas and options. Until recently, companies were able to compartmentalise, and channel this part of their operations via some kind of social investment or CSR budget dedicated to good causes.
These days it’s nearly impossible to operate without some sort of sustainability policy for your entire business, and more increasingly these policies are being integrated into business strategy - successful sustainability means a successful business.
Further, corporate sustainability policies need to reach out deeper into the supply chain. It’s not only the garments you procure and sell, but what about the cattle and cotton you indirectly farm or the rubber you inadvertently tap? Following the threads back to the rainforest, grazing plains, or cotton fields of your finished products is certainly a tricky business - especially for big companies sourcing a myriad of products; and especially for those with no systems inplace to track their products through their supply chain. And let’s face it, this is still the norm.
There is of course an element of “ignorance is bliss” here but this won’t last forever. As the leaders already know, it’s not enough to talk about your sustainability credentials if 99 percent of your affairs are unknown to you. Neither will a brand or retailer be able to separate their practices from those of their supply chain operators.
“The idea that sustainability augurs a lesser world is true in the sense that it calls for less waste, pollution, harm, devastation, depleted soils, poisoned workers, dying bodies of water, etc. But it does not portend a monochromatic world of brown smocks and rice. Sustainability is the forerunner of greater diversity and choice, not less.” Paul Hawken, environmentalist, entrepreneur, and author
The Sustainable Apparel Coalition (SAC) and its new Higg Index that measures the environmental performance (later social will be included) of apparel products will provide a “north star” for companies from all links in the supply chain, and from any stage of their sustainability journey.
Aspire to be Differentiated
Ultimately, civil society, increasingly in the guise of the consumer, will be the voice of approval or that of distrust. It appears to me that there are three very broad positions or stages of progression:
- The Deniers Why? Sustainability is not overtly on your customer’s radar, and not affecting their product choice or your business profits. Action: Do nothing - Apart from complying with the rules, maybe supporting the odd good cause through philanthropy, there is no proactive attempt to look for the business opportunity. These companies keep their head down, don’t say too much, show just enough interest in addressing issues of sustainability in case it does start to impinge on business;
- The Undifferentiated Mainstream Why? Aware of your impact on the environment and supply chain concerns, and feel a sense of responsibility. You also sense your customer is beginning to show interest too. Action: Do something - This usually involves finding ways to address concerns about sustainability which do not radically impinge on ‘business as usual’ or appear too costly or risky to implement. You can certainly see a financial benefit in sustainability initiatives which use fewer natural resources, and the positive press this can attract. This group is open to innovation but tends to keep change within the current models of doing business;
- First-mover Differentiated Why? This group want to 'be' the change; boldly exploring the boundaries of a new business frontier. They are open to the potentiality of concepts such as economist Tim Jackson's "prosperity without growth". Action: Do everything - Early movers see the future as now and work actively to make it a reality. They take on significant risk but are calculated and intelligent in their actions. There are usually visionaries at the helm and they fully accept that business as usual cannot go on like it is. First-movers are radically changing the way their company operates, gearing to achieve radical business transformation.
Clearly positions 1 and 3 are the most risky. That’s why we are seeing the majority of businesses aspire to operate in the “Undifferentiated Mainstream”. This path will no doubt take us slowly in the right direction, and we will hopefully see some companies jump from position 2 to position 3.
Thankfully a growing number of companies are positioning themselves as 3 - “Differentiators”. Many of them are small to medium in size (arguably the most sustainable size to be), including the likes of Dibella, Nudie Jeans, and Loomstate, but others are our big multinationals such as PUMA, C&A, and H&M.
(Note: The above three positions have been defined to illustrate a point, and of course few companies fit neatly into just one position.)
It's a Journey not a Destination
Getting one’s own house in order takes time, getting the whole extended family on the same page even longer. Tracking supply chains right back to the producer of your raw materials may be unfathomable for many large companies – let alone influencing them. It will probably take many carrots and sticks, determination and patience... and a far-sighted unwavering commitment to our planet and its future generations of inhabitants.
Join the discussion – Share your story
This month we will be learning more about being a Differentiator through our Collaborative Learning Series Rethinking and Reshaping Sustainable Sourcing. We will take a look at holistic value chains; because it’s here where we can learn from the companies who have managed to connect to tier 4, work up and down their supply chain in an attempt to ensure each last farmer is part of the chain, that value is shared, and environmental standards are resulting in improved livelihoods and ecosystem protection. On top of that, the client and consumer is rewarded with a value-added product, in terms of sustainability and integrity.
If you are aspiring to work holistically, have an integrated supply chain/business, or otherwise working closely with supply chain partners – and have a sustainability story to tell - we want to hear from you! Simply write to firstname.lastname@example.org and tell us your story or post an abridged story directly here online (in the comments box below). Any advice you have for others would be a great contribution! At the end of the topic we will include your company / organisation story in the Collaborative Learning Series topic summary – distributed to CLS subscribers and all TE members, and featured at our conference in Istanbul later this year.
More about this month’s webinar
What can we learn about product traceability, stories of origin, and farmer livelihoods from integrated organic cotton value chain operators?
In our topic webinar we hear from two businessmen Shreyaskar Chaudhary from Pratibha Syntex, India and Orlando Rivera from Bergman Rivera, Peru – both undoubtedly pioneers in supply chain integration and embedding sustainability benefits in their businesses.
Help us make this Series truly interactive -send in your comments, questions, and any examples you have on this topic via this blog. Don’t forget to register for the webinar either the 13th May or 14th May depending on the time that suits you best.
We look forward to hearing from you!
Our Webinar Topic 2 Guest Speakers
Orlando Rivera, Bergman Rivera http://www.bergmanrivera.com/our_partners.php
Shreyaskar Chaudhary, Pratibha Syntex http://www.pratibhasyntex.com/vasudha.swf
Links to a few companies tracing products and telling stories of origin
Send in your story of origin or product identity and we will add to our collection!
This year is International Year of Co-operatives
In 2009 the United Nations General Assembly declared 2012 the UN International Year of Co-operatives. The UN recognises the diversity of co-operatives around the world and encourages governments to create a supportive environment for their development.
The International Year of Co-operatives (IYC) celebrates a different way of doing business, where the members, who own and govern a business, collectively enjoy the benefits instead of all profits going just to shareholders.
Having an International Year of Co-operatives provides an opportunity to captivate the attention of national governments, the business community and, importantly, the general public on the advantages provided by the co-operative model.
The co-operative model is on track to become the fastest growing business model by 2020.
Co-operatives operate in a range of sectors – ranging from banking, credit, housing, health, retail, food, utilities and agriculture.
Co-operatives are owned by nearly one billion people across the globe.
Co-operatives employ nearly 100 million people – 20 percent more than multinational enterprises. For example: In Kenya, 63% of the population derive their livelihoods from co-operatives. Approximately 250,000 Kenyans are employed or gain most of their income from co-operatives. (Source: ILO, 2009). In the United States, 30,000 co-operatives provide more than 2 million jobs. (Source: National Co-operative Business Association).
Co-operatives promote the fullest possible participation in the economic and social development of all people, including women, youth, older persons, persons with disabilities and indigenous peoples.
Co-operatives innovate to meet the needs of their members, and may offer new products or services—ahead of competing businesses—because members ask for it.
Organic cotton co-operatives can be found in almost all organic cotton producing countries. A significant amount of organic cotton is produced within the co-operative business model.
Cooperation has always been a fundamental principle of the Fair Trade movement. This means almost all Fairtrade certified cotton comes from farmer co-operatives.
For more facts visit Co-operative facts & figures
Sustainability, Community and Co-operatives
Co-operatives are values based businesses owned by their members. Co-operatives provide a sustainable business model that supports the social and economic development of economies, communities, and individuals around the world.
Sustainability and co-operatives go hand-in-hand. In the video below Philippe Cousteau calls for a new economic model, necessary in a resource constrained world, to be rooted in co-operatives.
Philippe Cousteau, Keynote Speaker at the 2011 International Cooperative Alliance General Assembly in Cancun, Mexico on Friday, November 18, 2011
Coop Stories and Textile Exchange
Stories.coop is a section of the IYC website dedicated to storytelling. It aims at sharing the diversity of the co-operative enterprise model and to telling stories of successful co-operatives around the world. This global digital campaign provides an insight into a large cross-section of co-operative stories from around the globe. During each day of 2012 the IYC will feature a Story of the Day on their Homepage.
Textile Exchange will also be bringing you inspiring and personalised stories from the organic cotton cooperatives we work with. What better way to open than to share news from the Republic of Tajikistan, where the newly formalised ‘Bio Kishovarz Co-operative’ celebrates its new official ‘co-operative’ status.
Tajikistan, officially the Republic of Tajikistan, claimed independence in 1997. Since then the country has grown in stability and is building a trade economy, partly with the help of foreign aid. Mr Sherzod Abdurakhmano, Helvetas Swiss Intercooperation, tells us how a group of organic farmers have undergone their own ‘independence’ and moved from NGO dependency (and donor funding) in their early days to establishing their own stand-alone co-operative.
We will be regularly posting our stories in the Textile Exchange Farm Hub and at Stories.coop
By Liesl Truscott
Farm Engagement Director
We are delighted to welcome our first ‘guest blogger,’ Graham Burden, to the Farm Blog. Graham gives a Cotton Specialists perspective on the triggers behind the cotton market and how the whole value chain needs to better understand what’s required to support organic cotton production.
Cotton agriculture is a vital cash crop for many millions of farmers worldwide. The small holder farmer may grow cotton on no more than two hectares and income from cotton is an essential contributor to the livelihoods of farmers and their families.
It is these smallholder farmers and the larger farms in more developed countries that turn cotton into the largest single textile fibre and the largest non food crop commodity in the world.
As a commodity, fibre pricing is dependent on supply and demand. 2010/11 and 2011/12 has seen an extreme rise and fall in cotton prices impacting throughout the value chain from farm to retail, resulting in uncertainty in product pricing at retail and uncertainty in future planning for farmers.
As in any cyclical agricultural commodity in a rising market farmers plant more and yet a one crop per year harvest such as cotton can result in large increases in production coinciding with a decline in demand feeding straight back to lower prices for farmers.
This is the normal “way of the world.”
Those farmers, brands and retailers that have made a commitment to organic cotton have been faced with difficult decisions in these uncertain economic times, the difficult economies of Europe and USA directly impacting the farmers in the lesser developed nations.
The organic farmers and brands who have continued their commitment to organic cotton are to be congratulated. At the brand level there must be difficult decisions surrounding continued support for organic cotton, knowing that customer’s availability of income to spend on clothing has been hit hard. At the farm level it is not difficult to see that farmers could see any decline in organic cotton as a justified reason to switch to conventional cotton, if they have seen the previous financial benefits of growing organically diminish. It is hoped that organic farmers will remain committed to the cause, as it is their efforts, hopefully rewarded with a fair price that is providing “added value” through their endeavours to benefit the environment and their communities.
It is essential therefore that the entire supply chain involved in organic cotton has an understanding of the nature of cotton trade and that decisions to support organic cotton at retail is having the intended benefits – economically, socially, and environmentally at the farm level and at the same time ensuring their customers in the high street feel they are getting good value for money.
It is with this last point in mind that Textile Exchange is committed in 2012 to produce a cotton trade guide outlining the intricacies of cotton trade and providing guidance for retailers and brands to determine that the farmer groups involved in their organic programmes are receiving a fair and reasonable reward for their commitment to the environment and the social and economic benefits to their families and communities. As a member of the working group on this Guide I believe this will be an invaluable tool.
Consultant at Sustainable Textile Solutions UK Ltd
Coming next, Carl Pepper gives us a West Texas Grower’s perspective of the challenges he faces as in organic cotton producer. Carls reveals the secret to his success and the recipe for a good night’s sleep!
By: Liesl Truscott - Farm Engagement Director, Textile Exchange
As I sit back at my desk, breathe in, and think about “what next?” “What now for 2012? And “What do we want to be able to look back on this time next year and feel a sense of satisfaction... of purpose... of really making a difference?”
We saw 2010 begin to send ripples of uncertainty down many people’s spine. Organic cotton production and markets had been increasing beyond our wildest dreams, despite the economic crisis a few years back, the on-going value chain transparency problems, and the patchy investment in capacity building on the ground. Production continued to grow, particularly in India, with the farmers taking pretty much all the risks.
Come 2011, some might say our bubble had burst. We saw prices spike for raw materials having a knock-on effect for organic cotton, and an on-going conservativeness in the market (despite the strong placement of ‘ethical’ products and the increased interest in ‘sustainability’). We also saw confusion and competition, rather than seamless collaboration amongst the ‘more sustainable’ cotton initiators. And possibly worst of all (in my opinion) a relentless message to get prices for sustainable options down to the same price as ‘conventional’; all well and good if the conventional price reflects a ‘fair price’ but stressful for all – except perhaps the more naive of the world’s shoppers – if it doesn’t.
So what now for organic cotton?
I see 2012 as a year for maturation and stabilisation of the organic cotton sector, ensuring the positive impacts are reaching each and every farmer, and that all organic cotton projects are excelling. Our pioneers and innovators must take a strong leadership role. We need their expertise, experience, and quite frankly their conviction to guide the industry to the place we know it can be.
Below are my top five ambitions, some personal, but mostly aspirations I know I share with my colleagues, and hopefully the industry at large.
1. Seed security: Farmers having easy access to good quality, non-genetically modified seed that performs well in ‘low input’ organic growing conditions.
Photo: Chetna Organic - Seedling nursery, India
Why this is a priority: Over the past few years we have seen a push to increase the use of genetically modified (GM) seed in cotton production and expressions of interest by countries not yet legally allowed to use it. Non-GM seed has gotten scarce and been neglected by the agrichemical companies. Organic (and Fairtrade) certification does not allow the use of GM seed (which generally-speaking requires higher inputs of agrichemicals and water). Regardless of the pros and cons, farmers (and consumers) of any crop should be allowed the choice. Seed ‘sovereignty’ similar to food sovereignty states that people should have the right to certain things, such as saving seed for their own reuse.
What we plan to do about it... This year, funding permitting, Textile Exchange hopes to better support the fantastic work going on in a number of countries by dedicated experts, and other ‘seed stakeholders’. Our role will focus on joining up individual efforts to help systemise a collaborative network/movement, thus helping raise awareness of concerns and achievements, helping exchange knowledge and formulas of successful initiatives to other areas less developed, co-ordinate policy recommendations, and provide an access point for TE members to get involved.
2. Responsible business practice and investment in organic cotton: Farmers and their supply chain ‘partners’ working together to find ways to improve security of business that benefit all involved, and ultimately agreeing to long-term trade arrangements.
Photo: Bothling, Remei AG – Farmer training academy, Tanzania
Why this is a priority: There simply still isn’t enough investment in capacity building on the ground. This leads to insecurity in business development and an increased risk to business security for all. Ultimately suspicion, opportunism, and all the worst aspects of self-preservation come to play. The best way to achieve stable prices, improved product quality, reliable supply, etc. is through working more closely within supply chains, not by keeping a guarded distance. Yes it’s terrifying to rely on trust rather than an anonymous market to feel ‘safe’ but there are now plenty of examples of where ‘relationships’ are working, many of them built on a growing recognition of needing to look after a secure supply of raw material. It’s an ideal time for the more courageous (or the more evolved) businesses to test the waters and take a calculated risk! Plus, let’s remember why we are all doing this in the first place: to use trade as a vehicle for improving lives.
What we plan to do about it... Alongside our continuous messaging on the subject and support to our members, this year we are working collaboratively with a select group of early adopters and change agents to produce a Guide to responsible trade. The Guide will be aimed at brands and retailers to help them pave the way to better ways of doing business, either through direct engagement with producer groups, or with supply chain partners, through developing a deeper understanding of trade at the farm gate and how they can best support more responsible and transparent trade.
3. Further establishment of organic as the ‘Gold Standard’ in cotton production sustainability: Organic cotton farmers being clearly recognised and rewarded for their contribution to sustainable development.
Photo: Kings Group – primary schooling, Pakistan
Why this is a priority: There is an ever-increasing pool of evidence, based on reliable research, to confirm that organic agriculture is a successful way to future-proof our food and fiber production. We need to embrace this reality and increase our support in mainstreaming organic cotton production. We now know that organic agriculture offers less contaminated environments and workplaces, less burden on water ways, more fertile / less erosive soils, less demand on fossil fuels, greater potential for maintaining biodiversity, and better adaptation characteristics to climate change. Agricultural production systems offer a greater potential for food security and income diversity, particularly for producers in developing countries, due to the number of crops grown within the organic ‘system’. It is our priority to better communicate the benefits and support our member companies to actively engage in organic cotton agendas and bring organic to scale.
What we plan to do about it... In order to shout about the sustainability benefits of organic cotton we need to know that the benefits we hear about, and see amongst the best producer groups, are indeed the norm. This year we will be undertaking a major ‘Impact Survey’ based on ISEAL KPIs of sustainability, asking organic cotton farmers about their social and environmental policies, production, and practices. We want to be certain of their achievements and dig out as many quantitative measures as possible – We will be gathering evidence of what works best, what can be passed on to others, what’s not working, where further investment is needed... And how the textile community can best support farmers.
4. Promote leadership and continuous improvement: Lessons learned by pioneers, industry leaders, and early adopters are being shared and the way is clear for others to follow.
Photo: Anvil Knitwear – organic cotton leaders, USA
Why this is a priority: As we celebrate our 10th anniversary at Textile Exchange, we believe it is a good time to thank our leaders. These companies and organisations have seen an opportunity in organic cotton that is good for the triple bottom line. Not always plain sailing, straightforward, or immediately financially rewarded, our industry leaders: farmers, manufactures, brands, and retailers have transformed our understanding of what can be achieved at the farm gate. They are now the ones that are investing in other innovative materials, cutting carbon, removing more and more toxics from their manufacturing, and are forming partnerships to achieve the proverbial ‘win-win’. What better time than in our 10th year to bring pioneers and recent innovators into the lime light; not least to share their stories and inspire others?
What we plan to do about it... Over the course of the year, as we build up to our 10th annual conference in Hong Kong later in the year, we will be finding creative ways to share stories. First up, is our ‘Inspiring Moments’ snapshot gallery (up and running on our Farm Hub). Soon to come will be our ‘Future Shapers’ postings, delving into the motivations and success stories behind some of our favourite companies and producer organisations. Keep an eye on our website for updates.
5. More – and smarter – collaboration across the cotton initiatives: Diverse cotton sourcing strategies are built positively and collaboratively by brands, retailers, and supporting organisations.
Photo: Pedro Rivera – field training, Peru
Why this is a priority: There is a healthy recognition that we need to take better care of cotton production: for both the environment and the people involved in its production. What’s also healthy is the variety of approaches being taken to achieve more sustainable production. Whether it’s reducing the harm incrementally by targeting mainstream production (such as the Better Cotton Initiative, ‘Cleaner Cotton’, Integrated Pest Management, Best Management Practice), focussing on improving trade and development in Africa (Cotton Made in Africa), or through established certified schemes such as organic and Fairtrade production - there is room for all!
What we plan to do about it... Our priority at Textile Exchange is to support producers and other member organisations, (right through the supply chain) to invest in organically produced – fairly traded - cotton, since we know – when carried out according to the principles of organic certification – that it works. We also know that the best producer group initiatives are achieving way beyond farm sustainability and are contributing to sustainable development at a community level. This really needs to be seen to be believed! Our goal is to see more organic cotton initiatives benefiting more rural communities, particularly in developing countries. However, we see the benefits for some of our brand and retailer members in a diverse supplier base, supporting, and enabling a mix of initiatives to be brought to scale. This year, we continue to encourage organic cotton investment (in ways mentioned above) and will be working collaboratively with Cotton Connect our sister organisation on brand strategies that may encompass a mix of the initiatives on offer.
Finally, if I am allowed a sixth ambition... the combination of all the above, resulting in innovative designs, and sustainable products, that supports the use of business and trade as a vehicle for a better world.
We can all be change agents in 2012. I believe the current buzz words such as ‘collaborative competition’ and ‘shared value’ – whether they are any more worthy than ‘community investment’ and ‘corporate responsibility’ doesn’t really matter – they reflect our evolving understanding of inclusiveness, equality, and doing better business. What’s important is that we do ‘business as if people mattered’ – we put people at the heart of our mission statements and our business strategies. Not just our own generation but for those that follow.
I have seen the difference organic agriculture can make to farming communities, by improving livelihoods, and contributing to healthier happier communities. It requires investment, and commitment, from us all to get the best results.
Please join us in 2012 and help us build the capacity necessary to mainstream organic cotton, and catalyse better livelihoods for rural communities.
Thank you and Happy New Year!