Both financial and sustainability performance have never been more important for the textiles industry. Traceability can bring huge benefits to both, finds Planet Tracker.
Textile and apparel companies could be missing out on billions of dollars in net profit enhancements from a lack of supply chain traceability, according to a new report from financial think tank Planet Tracker’s; Lifting the Rug.
Traceability – the ability to gain detailed insight into the supply chain – enables companies to better measure and improve their environmental and social impact. Planet Tracker has found that companies without traceability systems are missing out on a net profit enhancement of 3% to 7% – the equivalent of approximately USD 3 to 6 billion per year for a company earning USD 80 billion per annum.
John Willis, Director of Research at Planet Tracker, comments:
“The textile and apparel sector is facing heat from all sides regarding its environmental impact, with toxic production practices, degradation of natural resources, massive and growing waste as well as labour injustice. New regulations are on the horizon and consumers are expressing increasing dissent at unethical practices. But still not enough is being done, because not enough is being said about the potential economic benefits".
The tools for companies to have full traceability through their supply chain exist, the companies have the expertise and knowledge to put these tools into action and deliver real insight. ‘It’s not possible’ is an outdated response to lack of traceability and reporting. Every company now requires data insight and evidence in order to be able to promote its sustainability credentials, this can't be achieved without proof of full traceability – which may involve some transparency measures.
"Planet Tracker’s and Segura’s findings prove that the cost of implementation would be more than offset by the enhanced productivity resulting from traceability. And this is in tandem with the sustainability, social and risk mitigation benefits. Even companies who are fully confident they are doing it right need traceability to protect against accusations of greenwashing, which are rife at the moment, no matter their ethics.”
Read the full report here