by Arthur Friedman
Cotton cultivation is associated with numerous social, economic and environmental challenges that threaten the sector’s sustainability—and some brands seem to be doing better than others in addressing those challenges.
The second annual Sustainable Cotton Ranking report aims to quantity and qualify companies that address cotton cultivation issues through polices, supply chain strategies and associations with key industry groups dedicated to sustainable cotton cultivation and manufacturing methods. The report, put out by the Pesticide Action Network UK, Solidaridad and WWF, which share a vision for a more sustainable cotton sector, ranks brands and retailers along various criteria and makes recommendations on how companies can improve their scores and help create a better environment along the cotton supply chain.
However, one major organization, Cotton Incorporated, takes issue with the report and its findings, questioning “what it hopes to achieve.”
Industry leaders
Achieving the highest ranking of “Leading the Way” was Ikea, Tchibo, C&A Group, Marks & Spencer and H&M, while the second tier, “Well on the Way,” including Adidas, Otto Group, Nike, Levi Strauss, Woolworths Holding, VF Corp., Tesco and Kering.
The report notes that cultivation of more sustainable cotton has never been higher than it is today, reaching 2.6 million tons in 2015-16, representing around 12 percent of global supply. However, just 21 percent of this amount is actively sourced as more sustainable cotton by companies, with the remainder traded as conventional cotton. Current forecasts are for sustainable cotton to be at least 15 percent of global cotton production in 2017.
“Companies that rely largely on cotton as a raw material play a crucial role in securing the future of the sustainable cotton market, reducing cotton’s environmental impacts and improving labor conditions,” the report said. “Some have made public timebound commitments to more sustainable cotton sourcing and report steady progress in actual uptake of sustainable cotton. Yet many of the world’s largest companies using cotton as a key raw material do not consider or address the negative impacts of its production.”
All cotton sustainability standards or programs rely on market uptake to finance and deliver positive impact, be it premiums paid directly to cotton farmers in Organic and Fairtrade cotton, license fees under the Cotton made in Africa system or volume-based fees in the Better Cotton Initiative system, the report stated.
The groups noted that their overall objective is to highlight progress achieved and opportunities for improvement that will accelerate transformation of the cotton market toward greater sustainability. With an aim of engaging a wider audience and stimulated demand, the number of companies assessed in the 2017 Cotton Ranking increased and included companies in major emerging markets.
More specifically, this second edition of the ranking provides an update on the market for more sustainable cotton, an update on company performance compared to the previous year and a performance assessment of an expanded list of companies from around the world.
Increasing availability of more sustainable cotton makes it easier for brands and retailers to make and keep sourcing commitments to more sustainable cotton, while greater transparency by brands and retailers about their long-term sourcing targets helps their suppliers prepare for and deliver on requests for more sustainable cotton.
Allowing for methodological changes between the 2016 and 2017 rankings, of the 25 companies assessed in both editions, 18 improved their performance.
This is most obvious in “uptake,” with 14 out of the 25 showing greater uptake. The top five companies in 2016–Ikea, C&A Group, H&M, Adidas and Nike–all increased their sourcing of more sustainable cotton as a percentage of total volume by about 20 percent in 2017. C&A made the biggest advance in uptake, almost doubling its score.
In the area of policy, 13 of the 25 made real improvements, with Gap Inc., Ikea and Marks & Spencer making the biggest advances. Ikea improved across all three areas and Gap Inc. improved in policy particularly, thanks to its BCI membership. Last week, Gap also joined the Cotton Leads program.
In traceability, nine of the 25 improved their score. Marks & Spencer, C&A Group and H&M, for example, expanded the public list of their suppliers compared to 2016.
How to improve cotton sourcing
To improve their standing and strategies, companies should start or continue sourcing more sustainable cotton, according to the report. They should also adopt policies on overall cotton sustainability, and specifically on the key topics of highly hazardous pesticides, water, biodiversity, labor conditions and recycling.
They should set public targets for using 100 percent sustainable cotton by 2020, including the percentage of Better Cotton, organic, Fairtrade, CmiA and recycled cotton, and should report transparently each year on policies, strategies and targets, as well as performance and progress.
In addition, firms should develop a plan for applying policies and meeting sourcing targets involving all relevant departments, join organizations such as BCI and/or Textile Exchange, and seek advice from standards organizations, NGOs and peers in their sector.
“Better performing companies recognize negative environmental impacts of cotton cultivation and have some sort of policy in place on cotton sustainability,” the report noted
Researchers looked for corporate policies with clear commitments to reduce water use and water pollution in cotton cultivation, with 31 companies having some kind of policy in place, although 43 scored no points at all. Ikea, C&A Group and Levi Strauss & Co. stood out. Ikea has a commitment to be “water positive,” meaning an efficient use of water, promoting good water stewardship throughout and beyond the value chain by 2020. C&A Group has a goal of reducing water usage during cultivation by 30 percent by 2020 and has developed a guide to reduce the water footprint of cotton cultivation in India, while Levi Strauss has an extensive water policy.
Biodiversity is less well addressed in company policies. Few companies have policies, commitments or relevant activities. No companies achieved maximum points–and 44 received no points at all. Inditex stood out for avoiding the sourcing of materials that pose a risk to biodiversity, for seeking more sustainable alternatives, and for cooperation with supply chain partners. Tchibo was also committed to defining concrete biodiversity targets and to implementing them together with suppliers.
A number of companies have programs in place for reusing or recycling cotton and other textiles. However, few companies achieved the maximum possible score, as policies do not apply to all cotton products, brands or collections. Nike, with a policy of sourcing recycled cotton, is actively working toward creating closed-loop products and decreasing waste.
Overall, the report said improvements since the first ranking in 2016 “are encouraging and suggest that leaders will continue to lead the way, driving sustainability in the sector.”
“While significant positive progress is evident, there is still much to do,” the report added. “Only around half of all assessed companies have a policy on cotton sustainability. Company performance on uptake and traceability is considerably lower than on policy, even among leaders. Only 11 companies have time-bound commitments or targets for greater use of more sustainable cotton, and uptake of more sustainable cotton remains relatively low with most of the heavy lifting being done by a handful of leaders.”
Another perspective
Jesse Daystar, Cotton Inc.’s chief sustainability officer and vice president of sustainability, said the report on the one hand “praises four cotton identity programs and on the other highlights that low volumes of cotton from these programs are being utilized. It denigrates conventional cotton, but the majority of cotton from the promoted programs is conventionally grown. It simultaneously praises brands for using the identity cottons and chastises them for not using more.”
Daystar said overall, the report misses some important points surrounding sustainability.
“It’s not about membership in any specific program, it’s about producing cotton that minimizes impacts to the environment, setting goals to reduce environmental impacts and measuring outcome based sustainability metrics,” he said. “Whether that happens through a cotton identity program or through the commitment of growers outside of these programs is immaterial. Brands and retailers have options and can determine which options fit best within their business and sustainability strategies.”
Daystar criticizes the report for not clearly defining “sustainable,” but instead “very narrowly defines ‘sustainable cotton’ as coming from only four identity programs.”
“The fact is that substantially more than 12 percent to 15 percent of the world’s cotton is responsibly grown,” he said. “The aggregators of this report seem to confuse enrollment in a program as evidence of environmental gains. This logic ignores the use of advantageous technologies, a country’s regulatory structure, as well as market-driven changes in production practices that exist outside of the four programs.”
Daystar said the report states that “sustainable” cotton production in the U.S. is 36,432 metric tons, roughly 1.3% of total U.S. cotton production in 2015.
“In reality, U.S. cotton is already being grown responsibly across all cotton-producing states,” he contended. “This has been well-established by third-party metrics. The aim of the cotton identity programs is to help growers produce their crop more responsibly. U.S. growers are doing this already, of their own initiative and at a national level. It is unnecessary for them to participate in programs aimed to help them do what they are already doing. We would argue that the ongoing environmental gains of U.S. cotton growers merit inclusion in this, or any report on the state of sustainable cotton.”