Apparel industry is the third-largest employer in the economy. At the same time, it’s the biggest contributor to environmental damage. For years, fast fashion brands have made claims about their sustainability efforts. But most of the time, loud words about organic sourcing and ethical labor turned out to be greenwashing.
Sadly, 87% of textile waste is dumped in the environment, and only 1% is recycled. And textile production is not even the core problem. Governments and sustainable fashion brands believe data traceability across the supply chain will solve the problem.
Data what?
Data traceability is the ability to track the journey of materials and products from their origin to their final destination. This involves collecting, storing, and analyzing data at each stage of the supply chain — from raw material sourcing and manufacturing to transportation, retail, and end-of-life disposal. By ensuring transparency and accountability at every step, data traceability can help identify inefficiencies, reduce waste, and verify brands' sustainability claims.
“It's imperative that every stakeholder leverages their influence to drive tangible change,” says Lewis Perkins, the President of Apparel Impact Institute. So, how can you make a difference with data traceability, and how to make it part of your retail supply chain? Let’s figure it out.
Is the fashion industry sustainable? Or will it ever be?
The fashion industry is responsible for 932 million metric tons of carbon dioxide emissions, or 10% of the total share worldwide. In the EU, clothing has the 4th highest environmental impact of any consumer product. Apparel companies are aware of it, and face the growing consumer appetites for sustainability. However, sustainable fashion requires one irreplaceable element: data traceability. The gap in data traceability is a significant barrier to achieving true sustainability in retail.
Without accurate data traceability, it is impossible to track the environmental and social impact of every garment from production to disposal. This lack of visibility allows unethical practices and environmental harm to go unchecked. To transform the fashion industry, we need a system where every step of the supply chain is transparent and accountable.
Recognizing this need, the fashion industry is beginning to take action. The sustainable fashion market is projected to grow at a CAGR of 8.9% and reach $90 billion by 2030. Big part of this growing market is adopting technologies to track apparel’s carbon footprint:
38% plan to implement supply chain tracking
19% are already using data to inform about their sustainability strategies
35% either have no tracking plans or are not actively leveraging the collected data
57% of organizations are engaged in tracking or planning to track their carbon footprint
The impact of fashion on the environment goes beyond how recyclable the new T-shirt is. How much emissions does it take to supply raw materials? What labor is used to make them? How can the quality and carbon footprint of the textiles be checked? How much waste does the package produce? And don’t forget the delivery and distribution.
Open-ended questions like these cause distrust among consumers. 80% of consumers don't believe brands are fully transparent about their products and manufacturing processes. For fashion, trust is vital – yet, 54% of shoppers in the UK don’t trust brands’ sustainability claims.
Source: Statista
Sustainable fashion regulations in the EU and US
The gap between marketing claims and practice is growing bigger, and some proactive consumers are taking matters into their own hands. Extinction Rebellion's fashion branch protests against fast-fashion companies, underlining the need for urgent change. But where can retail companies start this change?
To combat this problem and identify vague, unconfirmed eco-friendly claims that mislead shoppers, policymakers established rules every fashion retailer must follow. New regulations demand granular traceability at each stage of the product lifecycle. As Gediminas Mikutis from Haelixa put it, "You cannot claim certain labels unless you can guarantee that specific product meets those standards."
With rising regulatory pressures and the need to back up their sustainability claims, fashion brands are finding that data traceability is more important than ever. Accurate and confirmed data is essential for complying with new regulations like the EU's digital product passports and green claims directive. Also, measuring and demonstrating progress on sustainability goals helps increase brand trust.
The European Union rolled out ecodesign rules that restrict unsustainable materials, mandate recycled content, and ensure clothes are built to last. France has gone further, requiring brands to include detailed supply chain traceability data right on the product label. New French ADEME regulations demand all products labeled "Made in France" provide verified certification and correspond with the European Customs Code standards. These regulations involve paperless and fully electronic workflows and sustainable transport for customs and supply.
The US is also taking steps to bring sustainability in fashion closer to reality. The FABRIC Act is a U.S. federal bill that aims to protect garment workers in the United States by ensuring decent wages, holding fashion brands responsible for labor violations in their supply chains, improving transparency, and encouraging relocation of garment manufacturing activities to the U.S.
Sustainability reporting: Establishing data traceability across product lifecycle
"Everything we want to improve depends on our ability to measure it," says Shameek Ghosh, the CEO of TrusTrace. Data traceability is all about measuring:
The environmental impact of production processes allows brands to identify areas for improvement.
The social impact of manufacturing practices ensures ethical labor standards are met.
The lifecycle of products, from raw materials to disposal, enables better resource management and recycling efforts.
The transparency of supply chains fosters consumer trust and accountability.
Bridging this divide is crucial for sustainable fashion brands to accurately measure their environmental impact, validate their sustainability claims, and drive authentic change. However, navigating the intricate landscape of data collection, management, and analysis presents significant challenges that must be tackled.
According to research, most fashion firms could reduce their carbon emissions by more than 60% for as little as 1% to 2% of their total income. How?
With technologies for data collection and analysis, like IoT devices for real-time monitoring, or AI and machine learning for predictive analytics
By identifying and addressing emission hotspots and investing in renewable energy sources
Giving transparent information about product sustainability and encouraging sustainable consumption habits
Using tools to integrate data from various sources and a centralized database for emissions information
Data traceability in supply chain management
99% of total emissions from apparel occur in supplier networks. At the same time, sustainability is difficult to track across the supply chain because of how scattered the data is. Here is how you can do it:
Trace the social impact of manufacturing practices, including labor conditions and ethical standards
Analyze the complete lifecycle of products, from raw material sourcing to disposal or recycling
Show the transparency and accountability of supply chains to foster consumer trust
Obtain the data on carbon footprint, water usage, and chemical impact at each production stage
Standardize data collection and reporting metrics across every step of your supply chain
Collaborate with third-party auditors and participate in industry-wide initiatives
From granular traceability to adopting circular economy practices, closing the data gap is not just a matter of compliance but an opportunity for sustainable fashion brands to align their production realities with the industry's environmental aspirations. This transparency will empower you to pinpoint inefficiencies, validate sustainability claims, and make data-driven decisions that tangibly minimize their environmental footprint.
Optimizing sustainable product lifecycle
The way your products are stored and distributed also impacts your carbon footprint. How much energy and water do your warehouses produce? How much paper waste do you make when selling your products? If you never thought of it, you should.
Leveraging data and statistical models allows you to gain insights enabling you to optimize inventory, assess supplier performance, forecast demand, and drive efficiency. Here’s how to improve data traceability across your supply chain:
Measure warehouse energy and water consumption to identify opportunities for reducing utility usage
Implement data-driven inventory optimization to reduce overstock and understock situations, minimizing storage-related energy consumption
Analyze historical data and market trends to accurately forecast demand, reducing the risk of excess production
Integrate data from point-of-sale systems, CRM applications, customer experience platforms, and ERP systems to gain comprehensive visibility into supply chain operations
Use statistical models to analyze collected data, enabling more efficient inventory management
Many off-the-shelf solutions, including Oracle Supply Chain Management Cloud and Kinaxis RapidResponse, will help you with it. Oracle SCM Cloud offers a broad range of tools, making it suitable for large enterprises with complex supply chains. Kinaxis RapidResponse excels in scenario planning and optimization for companies facing frequent disruptions or high variability in demand.
Ensuring the authenticity and sustainability of your products starts with knowing their origins. By using advanced technologies like DNA markers, you can provide irrefutable proof of where your raw materials come from and how they were processed. This level of transparency not only enhances your brand’s credibility but also aligns with the growing consumer demand for ethically produced goods. Investing in product origin-tracking technologies will further solidify your commitment to sustainability and position your brand as a leader in responsible fashion.
DNA markers
Artificial DNA nanoparticle tracers embedded in raw materials track every step and supplier through manufacturing processes. It will make products and services more credible as they are accompanied by data that can be verified outside your company.
Haelixa pioneered this technology by providing a unique way to track products through the entire supply chain using DNA markers:
They create a unique DNA signature and apply it directly to the raw material or finished product.
Forensic testing can be done at any point in the supply chain to confirm the presence and authenticity of the DNA marker.
Haelixa then provides certification reports that verify the product's origin, processing, and other claims.
Isotope analysis for sustainability reporting
Another issue with the origin of your products is that certification can be faked or changed without any chance of true verification. Isotope analysis can be your answer to this issue.
It can verify the geographic origin of natural fibers (e.g., cotton).
Isotope analysis ensures the accuracy of material sourcing claims.
Such analysis supports sustainable agriculture as it helps you invest in regions committed to environmental conservation.
It also allows you to choose suppliers based on verified sustainability metrics.
Isotope analysis can also be used to track environmental pollutants, helping companies monitor their operations’ impact. Tools like Thermo Scientific Qtegra verify the recycled content, ensuring you meet sustainability goals and avoid misleading claims.
Digital product passports
After receiving credible results on the DNA origin and isotope forensics of your materials, you can aggregate this information within a centralized platform. Digital product passports have significant benefits for your business:
Provide information on material sourcing locations and show the percentage of recycled or sustainable materials
Outline each step of production and highlight sustainable manufacturing techniques used
Link all the certifications and third-party verifications
Provide evidence for any eco-friendly claims you make
Solutions like Eon's CircularID and Avery Dennison's Maxcycloud are leading the way in creating comprehensive digital twins for physical products. They enable you to connect your products through unique digital IDs and showcase them on all platforms and distribution networks.
How brands implement sustainability reporting technology
To illustrate the impact of robust data traceability and sustainability reporting, let's look at some fashion brands that have successfully integrated these practices into their operations. These companies not only set benchmarks for environmental stewardship but also enhance their brand reputation and consumer trust.
Patagonia: Production transparency
Patagonia has long been a leader in sustainable fashion. The company’s commitment to transparency is evident in its Footprint Chronicles, an online tool that allows consumers to track the environmental impact of Patagonia’s products.
By providing detailed information about the materials used, the production processes, and the working conditions in their supply chain, Patagonia ensures that their sustainability claims are backed by verifiable data. This transparency helps build consumer trust and demonstrates a genuine commitment to environmental and social responsibility.
Plus, Allbirds and Patagonia united in adopting blockchain and product tracing technologies from TextileGenesis to verify sustainability claims.
Stella McCartney's brand is synonymous with ethical luxury. The company employs advanced traceability technologies to monitor the entire lifecycle of their products, from sourcing to disposal.
By using innovative materials like Mylo, a leather alternative made from mycelium, and ensuring that all suppliers adhere to stringent ethical standards, Stella McCartney not only minimizes environmental impact but also promotes ethical labor practices. Their sustainability reports detail these efforts, providing consumers with clear, data-backed insights into their eco-friendly initiatives.
H&M: Integrating sustainability at scale
H&M has implemented several technologies to improve supply chain sustainability and transparency. They use the Higg Index, a suite of tools for measuring environmental and social impacts, to assess their suppliers' practices.
H&M also partners with Eon for product digitization using CircularID digital passports that track a garment's lifecycle. These practices help the brand prove its efforts at fashion sustainability and gain more loyal customers.
Levi's has leveraged machine learning from Levi's AI to create models to replace physical samples with AI models and add more variety to their sizes and forms. This helps optimize production planning and inventory management, reducing deadstock waste.
Nike has adopted Emulate3D software for 3D design and sampling, minimizing the need for physical samples. They use the Sustainable App by Material IQ to screen materials against sustainability metrics.
Gap Inc. partnered with Higg to improve transparency by digitally mapping their supply chain, identifying the overproduce and inefficiency to address these issues. Their Athleta brand uses Colorifix dyeing machines that drastically reduce water usage.
On top of that, Gap partnered with H&M, Bestseller, and Mango for the Future Supplier Initiative which finances renewable energy at supplier factories.
Overcoming challenges of data traceability
The fashion industry faces a significant challenge in addressing its environmental impact due to the “data gap” — the lack of comprehensive data and traceability throughout the supply chain. Bridging this gap is crucial for sustainable fashion brands to accurately measure their footprint, validate sustainability claims, and drive change.
COAX has proven expertise in software development for the retail industry, so we can become your well-equipped partners in implementing the necessary technologies for data traceability. Our team can help you:
Integrate data tracing technologies: We'll help you embed data from DNA tracing and other solutions into your existing system or develop a custom solution for precise tracking and verification.
Aggregate digital product passports: We can gather digital records for each product, detailing material sources, manufacturing processes, and sustainability metrics in one place to ensure full transparency.
Utilize predictive analytics: Use AI and machine learning to analyze data and forecast trends, enabling better decision-making and proactive sustainability strategies.
Improve data infrastructure: Build a robust data management system to collect, store, and analyze data from various sources, providing a holistic view of your supply chain’s environmental impact.
Together, we can close the data gap and transform the fashion industry for the better.
FAQ
What is the "big data gap" in the fashion industry?
The "big data gap" refers to the lack of comprehensive data and traceability throughout the fashion supply chain. This gap makes it challenging for brands to accurately measure their environmental impact, validate sustainability claims, and drive meaningful change.
What technologies are brands using to address the data gap?
Brands are adopting various technologies, including artificial DNA tracing, isotope analysis, digital product passports, blockchain, predictive analytics, data infrastructure solutions, and more.
Can you give examples of major brands implementing these technologies?
Brands like H&M, Levi's, Nike, Gap, Allbirds, and Patagonia are leveraging technologies such as the Higg Index, CircularID, Levi's AI, Emulate3D, blockchain, and product tracing solutions to improve transparency and sustainability.
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