Unlock, creating a climate-friendly future for cotton

Cotton binds fashion to the climate in unique ways – through its impact on the soil where it is grown and the resources used to process it, to the sheer scale of its use due to its versatility. We cannot reach our net zero ambitions unless we transform the way we produce it.

Fashion is responsible for around 4% of global Greenhouse Gas emissions each year (1) – equivalent to the combined emissions of France, Germany and the UK. Almost 40% of these emissions come from raw material production, of which cotton makes up 27% by volume (2).

As a result, cotton has been at the heart of many sustainability initiatives in recent years, and although progress has been made, there are still major barriers to transformation, including a lack of clear data and a complex value chain. At the same time, farmers hoping to shift away from carbon intensive conventional practices face challenges such as high upfront costs and changes to yields, and often are not able to access financial support at the times when it is needed the most.

Recognising the need for new approaches to support a global transition to low climate impact and regenerative cotton production, The Fashion Pact has partnered with sustainability consultancy 2050, to create the Unlock Programme. The pilot phase, launched in India and the US in 2022, will run until the end of Q2 2024, with the ambition of evaluating and implementing different accounting guidelines and quantification methods for GHG emissions and other impacts, and processes for supporting Scope 3 claims.

To do that, Unlock is focused on solving key challenges, including:

• Quantifying GHG benefits from better practices, as well as benefits for biodiversity, water, soil and farmer livelihoods.
• Providing early additional incentives to farmers to apply improved practices and technologies – increasing farmer resilience and making more low climate impact and regenerative cotton available.
• Supporting brands in connecting to farmers and making validated, credible scope 3 reduction and removal claims for cotton in line with SBTi and LSRG requirements.

Through Unlock, we have brought together players from across the value chain, including 25 brands, soil emissions modelling expert organisations Indigo Ag and Regrow, and implementation partners Better Cotton, Organic Cotton Accelerator, California Cotton and Climate Coalition, Staple Cotton Cooperative Association, and the Carolinas Cotton Growers Cooperative.

This collaboration has allowed us to work with a range of farm types and sizes to identify and implement practice changes, quantify the actual GHG impact (and other impacts), and use these to issue financial incentives to farmers called ‘Unlock Units’. At the same time we have gathered critical data on farmer livelihoods, biodiversity, soil health and water use and will be publishing a series of papers to share insights and develop Unlock as a long term solution.

The first of these papers; Comparative analysis of GHG accounting approaches and implications for the cotton value chain has been published and sets out important insights and technical considerations.

Challenges on the pathway to low climate impact and regenerative production

Through Unlock, we are testing how well inventory and intervention accounting approaches to quantifying GHG emission benefits work in the real world. As explored in this first paper, both have been found to create challenges for farmer participation, particularly for smallholder farmers in the Global South.

Many smallholder farmers in India do not routinely monitor their practices and inputs in the ways required to create robust baselines, but intervention accounting requires extensive baseline data and causality. Under an intervention accounting approach, farmers without historical data could face several years without financial reward in order to establish the baseline to then build upon with improved practices.

On the flipside, smallholder farmers that do have historical baseline data are those already been involved in improvement programmes, creating a different challenge with causality and with double counting. A farmer already certified to a scheme with a global LCA factor, would have to be able to show strong evidence they are taking additional steps they would not have taken already to avoid the risk of double counting.

For inventory accounting methods, including the Greenhouse Gas Protocol’s Land Sector and Removals Guidance, there are different barriers. These include the need for ongoing monitoring for reversals (when CO2 is released back into the atmosphere from the soil), and the need for traceability to farm level. These are much more challenging to implement in a Global South context and the approach to baselining opens up the potential for inflated claims or perverse incentives. For example, cotton impacts vary significantly by country due to different size of farms and access to efficient technology and inputs. Using a global average baseline might cause companies to abandon farmers from the many countries where emissions are worse than the global average baseline, even after farmers implement significant improvements. This is because a farmer that starts with very high emissions and improves these emissions over time may still end up with higher emissions than the global baseline number. The aim should be to support all farmers to improve, rather than to favour farmers that already have access to scaled, efficient and mechanised farming methods, and therefore it is very important to use appropriate local baselines for analysis and ask companies to rebaseline with more accurate data.

The report acknowledges that many of the challenges revealed through the pilot process are related to the Global South and particular attention needs to be paid to local contexts when guidelines are drawn up. This includes the need to address data requirements and validation methods for quantification models that are challenging to establish beyond the US market they are designed for.

We will work with our partners to continue to raise and address these challenges – and the others identified during the pilot – and will publish our analysis throughout the journey, to ensure we can help as many farmers and companies as possible.

Unlock Website

(1) McKinsey and GFA, Fashion on Climate (August 2020)
(2) WRI and Aii, Roadmap to Net Zero (November 2021)