TRACEABILITY: KNOW WHERE YOUR MATERIALS COME FROM
WHAT IS TRACEABILITY?
WHY SHOULD A COMPANY OBTAIN TRACEABILITY?
Traceability data can be used for a number of purposes. These include:
Assessing risks and prioritising action: Location data can be used to conduct risk or materiality assessments to understand relative biodiversity risk between materials or sources (e.g., between countries, states/provinces, aggregators or farms). This can help identify priority areas for mitigation actions. Without traceability data, a company will need to rely on generalised datasets, such as country average risk ratings. This can obscure a company’s unique situation and make accurate prioritisation difficult.
Impact analyses: Location data can be used to conduct detailed analyses that quantify a company’s negative impact on biodiversity. For example, impact analyses using location data can quantify occupied hectares or species losses that can be used as a basis for setting science-based targets.
Reporting progress: Companies can use traceability data to report on the level of compliance with specific policies in their production base. For example, traceability data is being used to report against No-Deforestation commitments in the palm oil and soy sectors (see https://ndpe-irf.net/ for more information).
Supplier engagement: Engaging with suppliers and producers to share your expectations for sustainability and to help them make improvements is a key part of a sustainability programme. This is especially relevant for downstream companies and brands that are indirectly associated with the production base. Traceability information enables companies to identify indirect suppliers which they can engage and support to help drive improvements.
Communicating with stakeholders: Stakeholders, including campaigning NGOs, often encourage traceability as a form of transparency. One example is Fashion Revolution, which publishes its annual Transparency Index of fashion brands who disclose information on their supplier lists, among other aspects. NGO’s focus on traceability is, in part, because traceability data enables companies to be specific about what issues and impacts may be associated with their supply chains and to work with producers, suppliers, civil society and other stakeholders on improving those standards (see ‘supplier engagement’ above).Transparency and stakeholder communication build trust and drive momentum for action by demonstrating that a company is serious in its sustainability efforts.
A number of indirect benefits can also arise from collaborative efforts to obtain and increase traceability, such as the development of shared templates or guidelines, which can increase trust and collaboration among peers and suppliers, and can be leveraged for further efforts to address biodiversity impacts. Efforts to increase traceability can also act as a clear entry point to more in-depth conversations with suppliers who may be new to the concept of addressing biodiversity impacts in their supply chains.
WHO SHOULD OBTAIN TRACEABILITY?
HOW SHOULD A COMPANY OBTAIN TRACEABILITY?
Traceability information is usually collected from suppliers. Companies typically ask their suppliers for the following:
- Location name (country and/or state or province)
- Location coordinates where relevant (e.g., for a mill or other aggregator)
- Quantity of material associated with a specific location or set of locations. Note that because a supplier may receive processed material that is comprised of material from multiple locations, they may not be able to tell how much comes from each location. In this instance, they would likely provide a list of locations associated with the materials provided without the quantity per location
- Type of material sourced, for example, the processing stage of the product
- Certification status of location (e.g., if a processor or farm) or material
Information may be collected annually, though some companies request updates as regularly as each quarter.
Note! The process of collecting data from suppliers can be streamlined when a sector works together to develop common templates and reporting guidelines.
Note! It can be very helpful to ask suppliers for standardised data, for example, by restricting data entry to specific spellings or terms. Sorting and analysing the data later stages can be a significant undertaking. To avoid this, it is best to provide standard names for locations or suppliers at the outset, for example using ISO codes where available. Also note that the Open Apparel Registry (see section ‘Are there tools that can support traceability?’) provides a route to assign common IDs.
Note! Given the resource-intensity of traceability data collection, companies often prioritise materials that have been identified as having relatively higher risks in the production base (for information on how to identify higher-risk materials, see sections ‘Understand biodiversity impacts’). However, since traceability is generally helpful and is increasingly being demanded by stakeholders, companies should think about long-term strategies to build in traceability across their purchases.
ARE THERE TOOLS THAT CAN SUPPORT TRACEABILITY?
Ultimately, companies achieve traceability by engaging with direct and indirect suppliers to collect information. However, there are some tools available to start this process and to gain a broad understanding of where materials are likely to come from.
TRASE uses trade data to predict trade flows of selected materials around the world, with a focus on materials and production countries associated with deforestation. So far, TRASE has focused largely on the food sector, but has some information on trade flows for cotton, as well as pulp and paper.
Open Apparel Registry is an open repository for companies and other actors to upload the name and address of suppliers and assigns a unique ID. Supported by the Laudes Foundation, the platform allows anyone to upload and access data, supporting shared reporting on traceability among fashion companies and their stakeholders. The database is searchable by a range of criteria, including the entity that uploaded the data, facility type, location and more.
FAOStat provides information about production and trade of key agricultural materials and can help you get a broad understanding of where materials come from.
MapSPAM provides a spatially explicit dataset of global crop production at a resolution of 10 km x 10 km. It provides overall production in tonnes, area harvested within each pixel and average yield information. It contains major crop types but is based on data from the year 2010. While it is less up to date than other resources such as FAOStat, it is the best available data available at a subnational scale.
Gridded Livestock of the World is the livestock equivalent of the MapSPAM dataset. It provides total quantities of different major livestock per 10 km x 10 km, as well as the average stocking density. Again, data is from 2010, but is the best available subnational data for livestock production.
CASE STUDIES
Progress in highly complex supply chains such as palm oil show that traceability can be achieved despite some challenges.
PepsiCo: PepsiCo is a significant buyer of palm oil and has achieved 99% traceability to mill. For more information see the ‘Traceability’ section of this website: https://www.pepsico.com/sustainability/palm-oil
The US Cotton Trust protocol is also making progress in traceability using technology to track materials with associated environmental indicators along the supply chain. For more information see: https://trustuscotton.org/about/how-it-works/
WHICH STEPS OF THE STBN DOES TRACEABILITY RELATE TO?
SBTN guidance advises companies to obtain spatially explicit data, especially to support step 1c – Value chain hotspot assessment. This is because many impacts on nature, as well as appropriate responses, are highly location dependent2.
2See https://sciencebasedtargetsnetwork.org/wp-content/uploads/2020/09/SBTN-initial-guidance-for-business.pdf (page 20) for more information