We need more traceability and transparency to make better choices in fashion industry

“It is a responsibility to happen to be alive at this very moment, when scientists are telling us that we are facing an existential threat. Every person, every business, every government – especially those with the privilege of choice and power – needs to play a part in the transformation towards sustainability”, said Lily Cole, author and activist, at a recent Regional Conference organized by UNECE and FAO Regional Office for Latin America in Chile, discussing the textile industry and its impacts in Latin America with key players from the region.

Latin America, a major producer and exporter of raw materials, including for the textile and leather industry, is facing profound transformation subject to global trends in this sector. Following consumers’ global demand for sustainable clothes and firms’ increasing focus on their supply chain visibility and resilience to risk, nearshoring trends, especially by US firms, are affecting the Latin America region. To benefit from these trends, the industry and SMEs in particular, will need increased investment opportunities to allow for quality jobs and value-added production schemes. However, many rural areas in the region lack access to financing, adequate infrastructure, technology and connectivity to keep up with global ESG trends and to scale-up innovative business models. In addition, the complexity of textile value chains often fails to give small-scale actors a voice and conceals stakeholder activities.

The Sustainability Pledge: a call for sustainability and circularity in global textile value chains

Although Chile is not a major player in the global textile industry, the country still has to deal with consequences of the linear lifecycles of textile products. For years, Chile has been a hub for second-hand or unsold clothing made in Bangladesh or China that passes through Europe and the US and is then resold in Latin America. As second biggest importer worldwide, around 59,000 tons of products reach the country each year at the free tax zone in Alto Hospicio, the country’s northern part. 39,000 tons remain illegally as waste in the Atacama Desert since it cannot be sold. This results in devastating consequences for the environment and the local community, with limited sustainable solutions.

Lily Cole is engaging in a shared ambition with UNECE to tackle such environmental and social harms caused by the textile industry through The Sustainability Pledge Call to Action. The Call aims to mobilize companies towards increased traceability and transparency in value chains with their pledges through concrete and measurable actions.

UNECE has been exploring the role of blockchain technology for end-to-end traceability and transparency from field to shelf. Advanced technologies have the potential to improve access to reliable information on compliance with regulatory and policy requirements and increase trust in sustainability claims for products and materials. Tested in more than 18 countries through 60 partners of 13 lead brands, UNECE blockchain pilots have shown the importance of reliable information to identify, prevent and mitigate adverse impacts on people and the planet.

“When people are given the information, they often make better choices. This is why transparency is so essential. Technology is really important in this sense as it provides the tools to authenticate sustainability claims and to provide the information for people to make better choices, and to push against the rising tide of greenwashing”, said Cole.

Latin American actors and partners unite to overcome challenges in the textile industry

The textile industry plays an important role in Latin America. The cotton industry is particularly strong in Brazil, Colombia and Peru, with Brazil expected to strengthening its position under the leading exporters in the world until 2030. However, widely unknown is that over 80% of the Peruvian cotton production stems from small family farmers. Approximately 8,400 families in Peru depend on cotton harvest as it forms the basis of their livelihoods and food security, yet they are often not visible to the end consumer.

FAO’s +Cotton Project, supported by UNECE’s Pima cotton blockchain pilot, represents a milestone for enhanced visibility and connectivity of farmers to global value chains. “It is an important project because these small family farmers stopped just being mere producers. Through UNECE and FAO they feel empowered and know that the effort they make year-round is considerably recognized in the world”, stressed Roberto Tume, Assistant Manager of COSTACH, a cooperative made up of 5,200 family farmers in Peru.

Beyond textile, the leather industry is also strong in Latin America, with Brazil, Argentina and Mexico in the world’s top ten leather producing countries. The UNECE blockchain pilot, tracing leather sourcing from Brazil, can support the conservation of biodiversity and promotion of humane handling of animals, organic practices as well as responsible use of chemicals through the collection of reliable data along the value chain.

The way forward in the garment and footwear sector of the Latin American region

As part of the Regional Workshop “Accelerating action for the sustainable and circular garment and footwear industry, innovation for inclusive cotton value chains” government representatives, international organizations, industry associations, and companies from Bolivia, Brazil, Chile, Colombia and Peru convened, representing a milestone in advancing regional cooperation and accelerating the shift towards sustainable development.

The participants expressed the need for tailored tech-solutions, capacity building programs and technological transfer in order to support SMEs’ competitiveness, global market access and value chains upgrading. In the short- and medium-term, the next steps include establishing new crowdfunding models and differentiated lines of credit, as well as focusing on key actions, such as enhanced education to strengthen connectivity; regulation of interest rates on loans and increased credit coverage; promotion of investment funds; creation of innovative financing mechanisms; and the implementation of a bioeconomy.

Participants further discussed the urgency to identify gaps in Chile’s legislations that permit the illegal landfill in the desert and the necessity to establish national recycling facilities for second-hand clothing within developed countries. Already, various local businesses represent beacons of hope, such as EcoFibra and ECOCITEX, by tackling this waste through innovative business models that recycle and make us of old clothing from the Atacama.

Going forward, UNECE, FAO and ECLAC, with partners like the Global Compact and IADB, will keep uniting forces to develop strategies for Latin America, including the user-friendly adaptation of the UNECE toolbox for SMEs and additional blockchain pilots for increased connectivity and visibility of rural farmers.

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