Despite its many benefits, sourcing cotton sustainably isn’t always easy. Here we share some of the potential barriers and challenges you may experience, along with examples and ideas for overcoming them. These are both on an internal level – actions you can take within your organisation; and on a sector level – actions you can support through collaboration with others in the industry.
A major concern for companies that operate with tight profit margins can be an increase in product cost because of the potentially higher cost of sustainable cotton.
Cotton pricing is complex. Depending on various factors, sustainable cotton can in some circumstances cost more. This can be due to: premiums paid to farmers or farming communities; farmers, traders and others in the value chain charging more to reflect market demand for more sustainable cotton; certification processes and documentation including impact assessment and reporting; and supply chain players covering their real costs of segregating cotton sources and administration. Buyers at brands and retailers are usually many steps removed from the price negotiations at earlier stages of the supply chain.
However, depending on volumes and other factors, sustainable cotton does not always come at a higher price.
Overcoming the ‘price’ barrier
-Identify the values of your organisation that drive it towards selecting a standard matching these values.
-Understand the real reason for the higher cost and who is benefiting from it (e.g. the farmers).
-Explore different certifications; some specifically aim to offer price parity.
-Design your marketing strategy to reflect whether you can differentiate ‘sustainable cotton’ products and charge more (and demonstrate money reaches farmers), or incorporate more sustainable cotton into your ‘standard’ product ranges.
-Look to source an amount of sustainable cotton that keeps a dedicated supply line open all the time, reducing costs from downtime, cleaning and segregation.
-Negotiate with suppliers
-For information on the pricing models for major sustainable cotton standards, visit the Cotton Sustainability Standards, and other Programmes page.
-Improve the efficiency of certification verification schemes to reduce costs and duplication of effort (and resulting resource costs) for suppliers.
-Grow demand and supply: increasing demand can be a ‘pull’ to unlock greater supply. This should increase sourcing options within the value chain, facilitating economies of scale and market dynamics.
Teams and individuals at your company may not know why sourcing more sustainable cotton is important for your business and society. They may also struggle to evaluate sourcing options and the information provided by suppliers. A lack of awareness about more sustainable options can simply mean buyers don’t ask for them. As a result, it is not offered even if available.
Your company might well already have a sustainability strategy and accompanying targets. It is surprisingly common for employees to be unaware of the contribution they can, and are expected to make, to this strategic ambition.
Overcoming ‘internal awareness’ barrier
-Train key decision-making staff about the important positive impacts of sustainable cotton sourcing.
-Decentralise sustainability responsibility so that all departments (however modest) have a sustainability plan ‘champion’. Provide training for retail and customer facing staff.
-Bring different roles together to talk about sustainability and how it links to your organisation’s values. Explain the business benefits and available options, then encourage discussion to clear up internal differences in understanding.
-Share case studies with others, internally and externally.
-Incentivise sustainable sourcing within usual performance management processes – this will drive demand for training and awareness as people see this as part of their ‘day job’.
-Awareness raising by trade organisations and professional bodies.
– Offer training and awareness materials that target decision makers.
– Provide recognition, for example, awards for sustainable sourcing.
Need for additional resource/time
Launching a new sustainable procurement approach involves new learning, new processes and additional activities. For example, identifying a baseline of what volumes of cotton you are currently sourcing can be time consuming, as can training all relevant staff on sustainability and new sourcing systems.
Overcoming ‘resource’ barrier
-Ensure you have senior support (ideally at board level) for sustainable sourcing and that there are clear expectations and targets.
-Integrate training and sustainable sourcing into existing processes where possible, such as training within existing courses.
-Acknowledge resource requirements when planning your implementation of a sourcing strategy and allocate appropriate resource (along with performance measures)
-Simplify systems to make training quicker and more straightforward. It should be easy to merge with existing sourcing activities.
Depending on the type of sustainable cotton you choose, you may encounter difficulties in finding partners who are able and willing to meet your demand. This will make it hard to establish suitable supply chains for your requirements.
You probably have well established supplier relationships along your supply chain. We recommend you work with existing suppliers first because it is the best way to ensure product quality and delivery expectations. If a more sustainable cotton is not available within your existing supply chain after working with existing suppliers, you may have to facilitate and negotiate new relationships. This can be a barrier for busy procurement staff and a potential source of concern in terms of quality, delivery and other commercial risks.
Overcoming ‘sourcing difficulties’ barrier
-Ask for help from your chosen standard or certification in finding suitable suppliers.
-Make a public commitment to source with targets. This will send a strong signal to suppliers.
-Engage with your suppliers so they understand your plans, which in return helps them build their business case, forecast and plan their buying.
– Collectively advancing commitment to source more sustainable cotton will send a strong market signal and encourage more suppliers to offer more sustainable cotton options.
– Provide innovative and/or flexible financing models.
Aligning company vision/values with sustainable procurement:
Without an overarching commitment at the top of your business, which avoids contradiction between sustainable sourcing and core business values and goals, it can be difficult to justify allocating resource to sourcing more sustainable cotton. Some of the reputational benefits of sustainably sourced cotton may also be missed if the overall corporate vision and values contradict this.
Overcoming ‘vision / values’ barrier
– Communicate clearly internally how sourcing sustainable cotton supports organisational values and sustainability aspirations.
– Try piloting sustainable cotton sourcing within a small range or part of your business. Use the pilot to demonstrate clear business benefits, which will help gain support for wider sustainable cotton sourcing strategy at senior level.
A major motivation for many organisations sourcing more sustainable cotton is the claims you can make about products or in reports of your progress. However, the extent to which you can or cannot make claims about your products depends heavily on the relevant sustainability programme’s traceability model. This is not necessarily a barrier but it’s an important point to understand and be aware of.
Overcoming ‘‘traceability’ barrier
– Identify the level of traceability you require before you choose which approach to take to sustainable sourcing.
– Ensure your chosen sourcing option provides the level of traceability you require.
– Find out more about traceability and the models used by the main sustainable cotton programmes.
– Standards and certifications schemes already provide information about the level of traceability they offer. They are constantly evolving their traceability systems.
– Businesses can encourage improvements at a sector level, across different standards, sharing information on how to simplify and align with their own systems.
– Support innovations. For example, connect with start-ups or academic researchers engaged on useful projects.
Supply Chain Awareness
Once your organisation has decided to adopt a sustainable cotton sourcing strategy, you also need to ensure you bring actors in your supply chain along on your journey. However, the benefits may not always be evident to them.
Overcoming ‘‘supply chain awareness'’ barrier
– Identify the priority suppliers to approach for support and cooperation.
– One option is to change suppliers but this can come at a high cost.
– First, engage directly with your suppliers to raise awareness, explain your aims and set out the business case for them.
– This may take longer but will pay off in the long run.
– Head to the Working with Suppliers page to access lots of tips for overcoming this barrier.
-By helping your suppliers meet your needs, you are also helping them prepare to meet the needs of other brands on similar journeys. This puts them in a good position to benefit as demand for more sustainable cotton grows.