Fashion brands are increasingly keen to tout their green credentials, but with clothes production often involving complex global supply chains they can’t always guarantee environmentally friendly materials are being used.
TextileGenesis believes the technology that underpins cryptocurrencies such as bitcoin can help. The company, based in Hong Kong and India, wants to make the fashion industry more transparent by using blockchain to digitize the supply chain, helping brands track clothes production from the raw materials to the finished article.
Sourcing sustainable materials is becoming a top priority for fashion companies, according to a 2019 report by consulting firm McKinsey & Company. Brands surveyed for the report said they also wanted to create transparency in their supply chains, but McKinsey noted few companies had yet achieved that.
“Sustainability has really become mainstream,” says Amit Gautam, the founder of TextileGenesis. “We see a heightened sense of urgency and a strong pull from the consumers as well as a push from brands to drive sustainability as the core value proposition.”
Rather than using fibers like polyester and nylon, which contain plastics, some brands want to switch to materials such as recycled cotton, lyocell (made from wood pulp) and viscose (made from wood). But opaque supply chains can make it difficult for them to monitor what materials end up in their finished products.
“The textile industry is one of the most fragmented industries on the planet,” Gautam tells CNN Business. He says the supply chain for a simple clothing item can involve up to seven different manufacturing stages across multiple countries. “The raw material sometimes exchanges 10 hands before it is converted into a t-shirt,” he adds.
His company is using blockchain technology to create a permanent record of every stage of production.
Blockchain is essentially an online public ledger that creates a permanent and accessible record of every stage of the supply chain. TextileGenesis uses digital tokens, known as fiber coins, to provide a time-stamped record of the flow of physical products through the logistical network. Once the tokens have been logged, they cannot be altered.
“With blockchain it is impossible to manipulate the results,” says Francois Souchet, a sustainability expert at the Ellen MacArthur Foundation, an environmental non-profit working to improve the fashion industry’s environmental record. “It provides all actors across the supply chain with certainty that the information is true.”
“Once you have transparency within your supply chain, then you can reduce your environmental impact and improve overall quality,” he adds.
Since launching two years ago, TextileGenesis has won a €150,000 ($180,000) Global Change Award for innovations promoting a greener fashion industry and run a pilot project with global fashion brand H&M (HNNMY), tracing recycled polyester and certified responsible wool.
Austria-based textile manufacturer Lenzing, Gautam’s former employer, has been working with TextileGenesis since 2019 and has rolled out the tech to 120 customers and partners in India, Bangladesh and Pakistan.
Lenzing’s vice president of global business management, Florian Heubrandner, says blockchain has provided “unprecedented transparency” in its dealings with brands and retailers. “It allows them to see exactly where the fiber was spun into a yarn, where the yarn was woven or knitted and where the final garment was produced,” he says.
He believes the technology can help brands hit their sustainability targets, and that it has protected Lenzing’s reputation as a manufacturer of sustainable textiles.
This year TextileGenesis plans to work with brands and manufacturers in India, Bangladesh and China.
“Traceability and sustainability are two sides of the same coin,” says Gautam. “Brands are making sustainability claims to their consumers about the materials they are using. They have to be sure that their product is authentic.”