The Trail of Trust: How Traceability and Transparency are Forging Stronger Brands
Article by Alexandra Pelka, founder AP Projects, company born to bring expertise in project and technology implementations across supply chains, supply chain management, and cross-industry knowledge into the team, as well as ESG standards and SDG compliance strategies. Join Alexandra on November 23 for an interactive webinar on the importance for brands to invest in traceability and the competitive advantages it can bring.
Another Saturday afternoon, it’s raining. You’re entering a shop looking for a new rain jacket to keep you dry and lift your mood. Not an easy task if you consider that there are many different typologies, varieties, colours, and qualities. Last week you read an article about social and environmental sustainability and the importance of best practices and conscious consumers, so you look out for a sustainable option. But where should you start? Everything is labeled sustainable, conscious, eco, green, …
You ask yourself: Who made these clothes and how many different countries have they seen before arriving at this store?
Traceability is becoming a synonym of sustainability and stewardship of supply chains. If you don’t know how and where something was produced, you can’t possibly know if claims are true or not. This does not mean it solves all the dark spots and the overall impact of the clothing industry but let us see it as a step towards a more conscious and informed consumerism. Traceability and transparency have become fundamental pillars of responsible brand management and go beyond pure compliance with regulations such as the German Supply Chain Act and the EU Supply Chain Law.
Today more and more people want to know where their clothes and other goods are coming from, and they start asking questions brands must comply to. The interest in production processes and ethics behind the products they buy, detailed insights into the product passport, is due to a lack of trust that has been alimented by bad examples in the past. Transparency nurtures trust on the other hand and builds long-lasting loyalty, and so brands have started to work towards an industry-wide culture of transparency and accountability across the value chain. Who is not in will soon be out, this is the trend we are heading towards, and it is shown in overall consumer habits that are rapidly changing and leading towards a wave of policy changes, public awareness, and internal brand (r)evolution.
The public disclosure of comparable and quantitative data through ESG reporting, combined with information of origin throughout the entire value chain, create a driving system change of responsibility and accountability. It allows a peak through a window for consumers to investigate the places and conditions of who made their clothes and make informed decisions. Don’t get me wrong, traceability is not the egg-laying wool-milk-pig of the fashion industry (A German-derived word, but I believe it conveys the concept), but it is crucial to achieve a sustainable, accountable, and fair industry through information rather than storytelling. But there are many more reasons why brands should consider a faster change towards traceability and transparency, and they all help them to work better. Risk mitigation is one of those reasons, as it equips the company with the ability to identify, pre-emptively address, and solve potential risks or benefit from opportunities within its supply chains. This can actively prevent costly recalls or reputation damage, and on the other hand, leads to an enhanced operational efficiency through monitoring and documentation.
Another important competitive advantage is a landscape of consumers who is actively seeking ethically sourced and environmentally responsible products and brand who showcase their commitment using true data and traceability. The same data that can also be used to comply to the newest EU regulations that impose strict reporting not only in the European Union, but throughout the entire value chain, including suppliers and sub-suppliers. This means that early adoption can be seen as a futureproofing of the brand towards global regulations, a growing eco-conscious consumer base, and risk mitigation of climate and social impacts.
How can brands start this transition? Rather than focusing on single projects and capsule collections that are costly and will only lead to disappointment in the long run, companies need to include it into their business as usual and daily practices. Start with a root cause analysis, investigating the fundamental causes of past issues and a materiality analysis of important impact areas to tackle. Individuating the main topics and issues, a corrective action plan and a strategy for future development can be developed and implemented. Not everything can be changed immediately, and it is a long way to go, but it is crucial to see the benefits of this journey and to be consistent over time to build trust, reliability, and security.
Traceability and transparency are great first tools to start with, as their cost is immediately repaid by their financial value to the company in all means and as a key to start aligning with any societal and environmental imperatives brands are and will be facing more and more. The journey may be long, but the destination is one of lasting trust, sustainability, and success.