It can be challenging to find a way to demonstrate that a viscose is eco-responsible, recycled, natural or bio: not with blockchain. Florian Heubrandner speaks for Lenzing
With global warming on the rise and during an unprecedented climate crisis, everyone must take a step further to contribute to an eco-responsible way of life. The Austrian company Lenzing AG is a pioneer in the textile business for the adoption and promotion of technological solutions to make the fashion industry greener. Lenzing has pledged to reduce its carbon emissions by fifty percent by 2030 and become carbon neutral by 2050. Their TENCEL™ brand already produces carbon-zero Lyocell and Modal fibers. However noble and effective this may be, Lenzing has identified an additional need in the industry: a need for transparency, which, according to Lenzing, is key on the path to carbon neutrality. Their project in collaboration with Textile Genesis uses blockchain technology to reach full traceability in the value chain, giving consumers the power to understand the entire lifecycle of a garment.
There is pressure on brands to demonstrate where the clothes they are selling and the materials those clothes are made with actually come from. According to a survey from 2018 made by Ipsos MORI, eighty percent of consumers want brands to disclose their whole supply chain. Lenzing has made their own studies, which supported the evidence found by Ipsos MORI. Conducted at the beginning of 2020 with a total of 9,000 subjects, their Consumer Perception Survey on Sustainable Raw Materials in Fashion and Home Textiles showed that transparency is an important feature for the final customer: for the eighty-six percent of the population studied, buying clothes that are respectful of the environment is a key aspect of living a sustainable life; for the eighty-two percent, a brand that is transparent about the origin of their raw materials is also trustworthy. According to Florian Heubrandner, Vice President Global Textiles Business at Lenzing, a need for transparency has been registered «from two angles». On the one hand, Heubrandner explains that «there is an increasing number of consumers who want to know where their clothes and garment were made». As customers grow more aware about the climate crisis, they are more careful about what they buy, and want to know more than just what brand a piece of clothing is designed by: «they want to know who really made the clothes». This can be problematic, because «most brands do not know the whole supply chain from the garment back to the raw material. All of them know the garment maker, some might know the fabric maker, but hardly anybody knows the yearn maker, and hardly anybody knows the fiber maker (like us)». Only five percent of the 250 biggest fashion companies can trace the materials they use all the way back to their origins.
Having control over the supply chain is also convenient for brands, «because many of the brands have sustainability goals», but without a way to oversee each movement of the material, they cannot prove their level of sustainability, nor if the policies they are adopting are effective. «For them to meet those goals and be sure to actually meet their own targets they need to be certain that the material they are sourcing is coming from the right source». That’s how companies also came to understand that they needed a system to be transparent about their production: «some brands realized they need to create that end-to-end transparency, otherwise they won’t know if they’ll meet their own targets». Transparency is a standard brands need to achieve, and one that is in high demand among consumers too. Disclosing the whole supply chain however is not always possible and when it is, accessing data and information can still take a lot of work. Lenzing, together with Textile Genesis, found a way to make traceability accessible with the help of technology, and that’s by applying a blockchain system to the textile value chain.
Most commonly associated with cryptocurrencies, blockchain technology serves to monitor transactions and make them safe. Blockchain works by forming a chain of registered transactions or transitions, each assigned to a code. A series of transactions is called a ‘block’. Once they are made, blocks are then ‘chained’ together, to form a single entity that renders the process controlled and transparent from end to end. Data are open and accessible, both from the parties involved in the chain and from the public. Two distinct types of digital coins can travel and be exchanged in a blockchain: they are called utility and security tokens. Security tokens represent a legal contract of ownership of a physical asset; whereas utility tokens form an internal economy that is associated with a project, providing a means to make all of its phases transparent. This differentiation between tokens allows for blockchain to be applied both within and beyond the borders of the financial markets and transactions.Textile Genesis applies blockchain technology to the textile supply chain, with utility tokens. They do so by using ‘fiber coins’ – what Heubrandner also refers to as «digital twins» of the fabric – that travel together with the material from the fiber maker to the final sewer who refines the clothes. Thus, brands can trace back all the steps the garments went through and be certain about the origin of the raw material. Blockchain is de facto an authentication mechanism, so it can be employed to authenticate fibers – or any kind of product that has to undergo a value chain – the same way it is used to authenticate digital transactions.
After Tencel has sent the fiber along with the Fiber Coins to the spinner, «the spinners receive the equivalent amount in Fiber Coins so they then send the yearn to the next stage, which is the knitting or weaving, and with the yearn they send the equivalent amount of Fiber Coins – so the digital twin travels again with the fiber». The same process also works for mixed fabrics, «if the fiber is a mix of fifty percent ECOVERO [sustainable viscose fiber produced by Lenzing, ndr.] and fifty percent cotton», what is sent is «the digital twin equivalent of half of the weight». Fiber Coins are sent and received through a Cloud system that is also provided by Textile Genesis. One of the main challenges is «reaching and explaining it to hundreds and maybe even thousands of companies to make sure that the right people participate». Textile Genesis is organizing and providing training to the companies who decide to implement their sustainable traceability system. They offer their technology for free for the first two years, making it affordable and approachable for all the smaller business owners who need to make a short-term profit and would not necessarily have large investments capital available for improving sustainability. One more challenge remains ahead, which is to «get the adoption and ensure the use by brands and retailers». A way to get there that seems viable and efficient is to try and generate the needed pull.
Blockchain has put forward a practical solution to achieve transparency, but there is one issue it has not overcome yet, and that’s around the relationship of trust that must exist between the consumer and a brand. In practice, applying a blockchain system, trust is outsourced to a third party, but the relationship is still based on trust. A trust that consumers put into the technology system rather than in the best practice of each company in the value chain. Blockchains, since they first appeared in 2009, seemed to be a solid source of trust. First of all, they are difficult to forge: if a code that is associated with a transaction is modified, the whole block will result manifestly transformed. Thus, it becomes evident if a forgery has happened, and at what exact point of the chain. It’s almost impossible for a change in the blockchain to go unnoticed. What is possible, however, is to create an entire false chain from scratch – which can lead to more sophisticated hustles. In a book entitled The Blockchain and The New Architecture of Trust, professor Kevin Werbach shows how the use of blockchain implies trusting a system without necessarily trusting its components. The problem of finding out who is worthy of trust therefore remains unsolved.
Still, trust is a key human feature, and it’s hard to imagine a world where customers – or anyone for that matters – doesn’t have to make a choice about who to trust. Law, Werbach argues, will help in making this decision easier when it comes to blockchain: by creating new standards and regulating the providers of blockchains, the choice will become impartial. But for this to happen, policies must be written and enforced, which takes time. A time that is not on our side in the fight against the damages of global warming. Lenzing envisions a future for the textile industry where, with the help of blockchain to foster openness and transparency, and with the trust of consumers on their side, we buy «a circular garment through a transparent supply chain with low Co2 footprint». To reach this goal, transparency and traceability must be put at the top of the agenda.IMAGE GALLERY
Since 2019, The Lenzing Group has been using blockchain technology powered by the Hong Kong start-up TextileGenesis to ensure the traceability of textiles from fibre to production and distribution. After several successful pilot projects, the company’s digital platform was launched on 5th November 2020 for its Tencel and Lenzing Ecovero branded fibres. The platform provides customers and partners as well as consumers with an overview across the entire textile supply chain.