CHAMPIONING CHANGE : PART 4
HOW BLOCKCHAIN CAN PROMOTE A SUSTAINABLE FUTURE FOR FASHION.
The vocabulary of the fashion industry is expanding day by day.
We’re here to talk about the B word - blockchain - and how it might promote sustainability and transparency in our industry.
The narrative around fast fashion – associated with opaque supply chains, unsustainable sourcing, high water usage and global transportation – has tarnished the whole industry. Brands feel compelled to put distance between themselves and the ‘bad apples’, by demonstrating that their raw materials, and especially products such as animal skin, are fully traceable to sustainable and high-welfare sources.
The snowball effect of complex supply chains is becoming a brand headache. Even those companies that manage their provenance carefully can become tainted by growing consumer suspicion about a sector.
So the question is, how does blockchain promote transparency in the fashion industry?
Digital provenance has emerged as a way of helping apparel brands to counter the threats of counterfeiting, demonstrate their sustainable and ethical credentials, and also differentiate in a competitive market. By creating a unique digital identity for every product – a digital twin – its lifetime journey can be traced on the immutable blockchain from raw material to design and sale, and then resale and recycling, depending on the brand’s needs. As a consumer, we access this information simply by scanning a QR code or NFC chip.
Blockchain technology may be utilised in conjunction with QR codes, smart labels, near-field communication (NFC) tags, and/or radio frequency identification (RFID) tags. These devices facilitate the transmission of data from the code, label, or tag to a smartphone or reader device. Blockchains can also be generated for the purposes of use with real-life physical products, like handbags or shoes. When placed onto such products, these devices act as a link between the physical item and the digital ledger which contains data, such as the product’s source and ownership history. When a consumer scans the QR codes/tags with their smartphone or with an NFC/RFID reader, the data is instantly revealed, granting the consumer access to relevant information that can assist them in making purchasing decisions or verifying the product’s authenticity.
Pangaia and EON’s digital passport for clothing.
It sounds simple but supply chains are famous for their complexity, with a vast network of manufacturers, warehouses, transport depots, communication channels and logistic providers, each managing their own databases and logistics. It’s no surprise that the fashion industry has a problem with transparency. So with blockchain, the apparel supply chain becomes a single, immutable ledger that is visible to all permitted parties. This allows retailers to build more customer-centric supply chains that prioritise authentication and trust.
According to a study from McKinsey & Company, it is imperative for brands to build trust and transparency with their customers, as 75% of them consider it to be an important purchasing factor.
Manufacturing information would usually be stored in an internal or analogue system but by using the blockchain system this manufacturing information can be easily accumulated and self-validated. At the tap of a smart phone screen, consumers can understand the environmental and social impacts of a product before adding it to their bag.
Digital provenance will essentially incentivise responsible behaviour, such as sustainable production, ensuring that recycling and repurposing take place in future production.
So how do we implement this new technology?
Well for start up brands we’ll be honest, this technology is expensive. There are a variety of blockchain protocols and systems, each with their own rules and standards, vying for popular adoption in the fashion industry. Without standardisation or cooperation between key players, the fashion industry's adoption of blockchain-based technologies can result in a plurality of incompatible, siloed systems with limited reach or benefit.
Then there are the controversies around the environmental impact of blockchain technology. This perception raises concerns about, and inhibits, the future uptake of blockchain. So with this in mind, blockchain should be treated with caution and adopted with guidance
Sustainable design agency circular.fashion adds another entity to the chain which is of the recyclers that receive transparent information about the materials used in order to recycle garments effectively.
Through the circular.ID, every stakeholder in the fashion ecosystem is able to access material and product data alongside the item’s journey. The end goal is for designers to create with circularity in mind, consumers to know where to return clothing for recycling and reusing, and for sorting facilities to correctly identify products and their materials.
Last year, the start-up won the H&M Foundation Global Change Award and has been supported by Zalando through its zImpact programme, while already counting Hugo Boss as one of its clients. Major brands are already on board to increase supply chain transparency with the use of digital technology which could change the way we consume clothes by moving away from a throwaway culture and appreciating beautifully made products that carry a meaningful story.
Blockchain allows brands that uphold their responsibility to ethical production to gain a competitive advantage - while dishonest brands are weaved out. With the knowledge about how and where our clothing is being produced, as well as knowledge about the impact this has on the environment and people’s lives, we have the insights we need to take action.
