Chain of Custody: A Dramatic Shift in How Fashion Brands Approach Sustainability

Over the years, the fashion industry has championed a movement toward sustainable apparel, environmentally friendly production practices, and the elimination of forced labor. But a new layer of complexity now presents another existential topic: the chain of custody. 

I had the pleasure of discussing the role of chain of custody in supply chain traceability at the recent Traceability & Sustainability Conference, hosted by the American Apparel & Footwear Association (AAFA). For most industries, the chain of custody is an exercise for tracing lots or batches from the initial origin to a finished product and into the consumer’s hands. But it’s not that simple for the fashion industry. At any tier of the supply chain, lots can be presented in many configurations – for example, multiple bales can be used in one yarn lot, which is later split across several mills to produce an assortment of fabrics.  

Responding to the Growing Complexity of Traceability 

While nearly every brand has a traceability process in place, there’s always room to improve, especially as supply chains become more connected and data-driven. Moving in the direction of using various data elements to track the transformation of materials to products through each tier can help build supply chains that are more resilient, ethical, and sustainable. 

The reason why chain-of-custody standards for sustainable materials are more important than ever comes down to credibility. Marketing plans built on products that use a preferred fiber – like organic or recycled – will need the digitalization of chain-of-custody standards, however existing processes are not generally supported by the right technology.

Although this situation is not from a lack of trying, it is undoubtedly more complex now that consumer decisions are based on the credibility of sustainability claims. Brands must demonstrate that their chain of custody not only exists but is also accurate, authentic and responsible. A common platform for storing verified sustainability data from multiple sources would mean fibers could be sourced and used in ways that directly impact the brand’s carbon footprint.

Prioritizing Long-Term, Value-Driven Sustainability 

Across the fashion industry, brands debate whether it’s best to track the journey of materials across product lines or trace the chain of custody on a specific product category. However, neither approach accomplishes the same objectives. Focusing primarily on materials or finished goods does not provide a complete picture of every potential risk and opportunity that can impact long-term supply chain resilience.  

Yet, both approaches could be combined to give compelling insights into where a product has been, the hands that have touched it, and the resources and mechanisms used. A conference attendee offered that brands can learn about the overall journey of the materials and where opportunities for improved impact are present, such as the farm or field, mill, or production floor. That information is more useful for someone working on sustainability outcomes. In the meantime, marketing, merchandising and legal teams are interested in the origin of a product or category. 

The same is true when you consider the differing granularity that industry insiders and consumers demand. For example, fashion executives expect to see a network of multiple yarn suppliers, mills, tanneries, factories, retail centers, and transportation lanes and their individual performance and capacity. But consumers are more concerned about the one item they purchased. They want to know whether materials are recyclable, which suppliers helped produce the item and how the environment was impacted in terms of carbon footprint, energy consumption, and water usage. 

Take, for example, a fashion brand that collects facility-level environmental and social data through the HIGG index and brings all that data onto a common platform and ties it to a QR. When consumers scan a QR code with their mobile phone, they can see that the product is authentic, where it was manufactured, and how the cotton was grown and harvested. And for the brand, it’s an opportunity to reduce their impact on water and energy consumption. 

Overall, this same approach can also offer tremendous potential in optimizing the inception, development, and next life of a product. The information generated by the QR code can also inform the consumer or retailer on how to best recycle the product when the time comes. 

Embracing Continuous Improvement and Building Resilience 

The fashion industry may be just beginning its journey to true chain-of-custody tracing. But it’s never too soon to connect, exchange, and share all those pieces of fragmented data, business systems, and supplier interactions swirling about in today’s supply chains.  

Such connectedness cannot come fast enough for the fashion industry. Every brand’s credibility and reputation are worth the time and investment to standardize that core foundational information so they can engage in open, honest, and trust-building conversations about their sustainability efforts. 

And when their supply chains are more transparent across every tier, fashion brands can ask tough questions about sustainability performance and answer the concerns of their retailers, consumers, and regulatory agencies with tremendous clarity. 

For more information on adopting a sustainable supply chain, check out our practical guide to supply chain sustainability here.