Although we have had our suspicions about this, there wasn’t really a link; until now. An interesting piece of research on “Groundwater depletion embedded in international food trade” was just published in Nature on 30 March 2017. The paper warns of alarming rates of worldwide groundwater depletion (GWD) due to irrigation withdrawals. Estimates are that around 11% of non-renewable groundwater is embedded in the International food trade.
What has this got to do with fashion? Well, the title of the Nature paper is somewhat misleading: it should have said “Groundwater depletion embedded in crop trade” not “food trade”. A deeper dive into the results shows that some of this over-abstraction was down to the cotton crop.
Cotton is a Top 5 crop leading to the most groundwater depletion globally
Cotton was amongst the Top 5 crops leading to the most depletion globally – wheat (22% of global GWD), rice (17%), sugar crops (7%), cotton (7%) and maize (5%). That said, the trade in cotton alone accounted for 11% of global GWD transfers, with rice topping the list at 29%, followed by wheat at 12%. Maize and soybean are more water efficient crops, only representing 4% and 3% respectively.
Groundwater Depletion (GWD) is defined as …
“the volume of groundwater that is abstracted for irrigation use in excess of the national recharge rate and irrigation return flow, accounting for environmental flow requirements, and thus corresponds to an unsustainable use of groundwater for crop production”
Who’s sucking up whose aquifers?
A glance at chart below indicates that Pakistan, USA and India are exporting GWD through trade. These three are the largest exporters of GWD, accounting for two-thirds of all GWD embedded in the crop trade.
Cotton drives USA’s GWD exports and is a quarter of India’s GWD exports …
Rice leads Pakistan’s GWD exports at 82% – mostly to Iran, Saudi Arabia, Bangladesh and Kenya. Cotton, however, drives USA’s GWD exports at 24%, followed by wheat (16%) and maize (10%) to China, Mexico and Japan. Meanwhile, for India (#3 GWD exporter), nearly half of the over-abstraction is caused by rice (25%) and cotton (24%).
… Almost half of China’s GWD imports are from cotton
In short, cotton accounts for a sizeable amount of GWD exports by USA and India. So who’s this cotton going to? It appears that the beneficiary is China; almost half of China’s GWD imports are from cotton, whereas soybean, which China does import a lot of, only accounts for 14% of GWD imports.
From the research, it appears that demand from China along with USA, Mexico and Iran are sucking up other people’s aquifers. But before we start blaming China, the truth is that China is not the only end user of its cotton imports. Clothing & Textiles form the largest chunk of its industrial virtual exports – see chart below.
But China is not the only end user of its cotton imports…
… Clothing & Textiles form the largest chunk of its industrial virtual exports
In fact, China makes so much stuff for the rest of the world that it is a net virtual water exporter despite its agricultural imports. So what is really driving demand for cotton in China?
Zara, H&M and Uniqlo et al ultimately driving China’s cotton appetite?
China only began seriously to import cotton in the early 2000’s. We argue that this increase in appetite for cotton imports is driven by the meteoric rise of its manufacturing prowess for fast fashion.
Cotton appetite in China rises in tandem with store openings of fast fashion brands …
The chart below says it all – cotton appetite in (imports & domestic production) China rising in tandem with store openings of Inditex (which owns Zara), H&M and Fast Retailing (FR – which owns Uniqlo). Of course these three brands are not the only ones to blame; there has also been a similar explosion of stores in Target, Walmart, M&S stores in the same period. And let’s not forget the stellar rise of on-line shopping. However, since it is difficult to pin down which store is just a clothing/ food store, we used store openings of the three clothing brands for illustrative purposes.
The pursuit of the lowest price
With fast fashion driving the search for the cheapest prices in the supply chain, the price differential between domestic and international cotton drove China to import cotton.
China’s biggest trade partner has traditionally been the USA. But in 2011, cheaper cotton and shorter transportation times from India meant that the country overtook the USA to become China’s biggest trade partner for cotton. Today, the Top 5 cotton nations that China is importing cotton from are: India, USA, Australia, Uzbekistan and Brazil.
Meanwhile, China’s homegrown cotton storage stockpiled to over 12 million tonnes by 2013-2014. Since then, China has reduced incentives to farm cotton in the parched North China Plain. So while China’s own cotton production and imports fell in 2014, global production was still on the rise. As can be seen from the chart below, global production of cotton has been only rising markedly over the last decade.
The last decade has seen global GWD in crop production increase by 22%
An increase in global crop production has an impact on groundwater. Over the last decade, global GWD in crop production has increased by 22%, with the biggest deterioration from China (102%), India (23%) and USA (31%). The paper published in Nature warns USA, Mexico, Iran and China are particularly exposed as they produce as well as import food irrigated from rapidly depleting aquifers, including those in NW India, the North China Plain, central USA & California.
Given that China’s largest trading partners for cotton are India and USA, we can broadly say that the likes of Zara, H&M and Uniqlo, or anyone else in fast fashion selling cotton products are causing groundwater over-extraction in USA India and even in China, which itself grows a quarter of the world’s cotton.
So more stores = more stock and as four-season fashion moved to 52-week fast fashion, global cotton production also grew. So actually, we are depleting our aquifers globally for something we don’t eat. Also, why are we growing virgin cotton when we can recycle? Worse still, the business model of fast fashion is premised on encouraging us to throw away the garment after one week of use, if we are going by 52-week fashion.
Not only is cotton sucking some areas dry, it also causes groundwater pollution
And if that is not enough, let’s not forget that the cotton crop is also dirty, sucking up significant amounts of global insecticides and pesticides. So not only is cotton sucking some areas dry, it also causes groundwater pollution, which in turn exacerbates scarcity. In China, the over-abstracted North China Plain, where a quarter of China’s cotton is grown, faces severe pollution: >70% groundwater is unfit for human touch.
Most brands are only visibly dealing with the “dirty” part of the crop. Many of the more responsible brands can tell you how much of their cotton is organic or ‘Better Cotton’. However, we are not aware of any major high street fast fashion brand that discloses just how much cotton they have sourced from where. Sucking aquifers dry in countries that are already facing water stress is clearly not a priority for action.
7 of the Top 10 cotton producing countries face medium to extremely high water stress…
… yet brands do not disclose how much cotton they have sourced from where
Where & when does this stop?
For cotton, the answer is staring us in the face: switch to slow & more expensive and durable fashion that reflect the scarcity and polluting nature of fashion raw materials; switch to recycled cotton; or, better still, switch to hemp. Brands: surely it’s time to invest in any and/or all of these changes and not wait until the aquifers in USA, China, Pakistan and India are sucked dry. Too far-fetched? Think of what cotton-growing did to the Aral Sea: a volume loss of ~70% between 1960-2000 due to water diverted to grow cotton in the desert.
Who should be held accountable? Governments, brands or the consumers?
Fashionistas, it is also time to face up to the ugly truth. You are partly to blame for over-extraction of groundwater. The frivolity of throw away fashion means that you are only beautiful on the outside.
Ultimately, we are all to blame. Almost everyone will have at least one cotton T-shirt in their wardrobe. If this makes you, the consumer, feel uncomfortable, start demanding your favourite brand to (1) tell you where it sources its cotton and (2) guarantee that it is not causing groundwater depletion.
Pesticide Action Network (PAN) UK, Solidaridad and WWF have released the list of companies that will be assessed in the new round of their Sustainable Cotton Ranking to be published in October 2017. The second edition of the ranking will include major companies from all continents, including from countries such as China and Brazil, and online companies such as Zalando and Amazon. As in 2016, the ranking will score companies on their policy, traceability and actual uptake of sustainable cotton.
On the Target List
This year the scope of the ranking will be broadened. The target list of companies (PDF) has been expanded to offer a more global representation of consumer-facing companies estimated to use more than 10,000 metric tons of lint cotton annually and include companies from emerging markets and online retailers.
Creating a list of the largest corporate cotton users is challenging as most companies do not publish the volumes they use in their products. PAN UK, Solidaridad and WWF welcome feedback from any companies who believe their cotton use has been under or over-estimated, as well as those whose may have been omitted from the list and wish to be included.
Scoring Company Progress
The first Cotton Ranking (PDF) published in 2016 showed that the majority of companies using most cotton globally were failing to deliver on cotton sustainability, with just eight companies out of 37 showing positive progress in the ranking.
By conducting a second Cotton Ranking in 2017, PAN UK, Solidaridad and WWF expect to see that more companies have taken steps forward on their sustainable cotton policies, traceability and sourcing. As transparency and accountability to customers is considered paramount by the three NGOs, only publicly available information will be used in scoring company performance. The report will be published in October 2017 so as to take into account companies’ public reporting on their 2016 performance.
Updating Market Trends
The report will also include a market update on the available supply and uptake of cotton from the main cotton sustainability standards (organic, Fairtrade, Cotton Made in Africa and Better Cotton). While around 10% of global cotton supply was grown according to one of these standards in 2014, less than a fifth of this amount was actually being bought as more sustainable cotton, with the rest being sold as conventional due to lack of demand from top brands and companies.
Thirty-seven companies estimated globally to use the most cotton in their products were scored on their sustainable cotton policy, sourcing, and traceability. Only publicly available information was used in scoring company performance.
The Cotton Ranking focuses on companies rather than individual brands as, while sustainability practices can vary significantly between different brands, entire companies need to change sourcing practices in order to transform cotton production.
Cotton is grown in around 80 countries worldwide and is a key raw material for the textile industry, accounting for around 32% of all fibres used. Sustainability issues include the widespread use of pesticides, with 6.2% of global pesticide sales associated with cotton production (which uses just 2.3% of the world’s arable land), and intensive water use, with 73% of global production currently dependent on irrigation.
While many smallholder cotton farmers are driven into debt by the cost of pesticides and fertilisers, sustainable cotton production has the potential to lift farmers out of poverty by providing a more stable income and improving working conditions.
A number of sustainable cotton standards have been developed in the last 35 years, starting with Organic cotton in the 1980s, followed by Fairtrade in 2004, Cotton made in Africa (CmiA) in 2005 and the Better Cotton Initiative (BCI) in 2009. All provide guidance and support for farmers and seek to assure retailers and consumers that the cotton in the products they buy are being produced using sustainable farming methods.
The supply of sustainable cotton has never been greater (estimated to be at 13% of global supply in 2015) but uptake by companies, essential for mainstreaming sustainable cotton, remains low at approximately 17% of what is available.
Major brands have increased their use of so-called Better Cotton.
Cotton, the most widely used natural fiber, is considered the world’s dirtiest crop because of its heavy use of pesticides—its cultivation accounts for up to 17.5 percent of global insecticide sales, according to some estimates. So in recent years, several apparel and home-goods companies, including Eileen Fisher, Patagonia, and Nike, have used organic cotton, grown by farmers who eschew pesticides and enrich their soil with compost.
That’s good for the environment but raises another big problem: Organic cotton is too expensive for average shoppers. Organic fiber cost as much as $2.20 per pound, vs. about 61¢ for conventional cotton, in the 2015-16 growing season. That’s kept demand low; less than 1 percent of the world’s cotton production is organic.
“That’s one of the aims, to make Better Cotton mainstream and make it available for the masses” – Ulrika Hvistendahl, sustainability spokeswoman for Ikea
Over the past nine years, Ikea, Zara-parent Inditex, and H&M, among others, have signed on to the Better Cotton Initiative (BCI), a coalition of farmers, garment makers, and retailers committed to producing and using sustainable cotton at accessible prices. BCI farmers are taught how to grow sustainable cotton using less pesticide and water—reducing stress on the environment—at a cost close to that of regular fiber. “That’s one of the aims, to make Better Cotton mainstream and make it available for the masses,” says Ulrika Hvistendahl, sustainability spokeswoman for Ikea. Since 2009 the retailer has increased the percentage of Better Cotton used in its products, from sheets to furniture. In fiscal 2015, 70 percent of the cotton Ikea used was Better Cotton.
Environmentally Correct T-shirts are too Expensive for Many Shoppers
Similar efforts, like Bayer CropScience’s e3 sustainable cotton program, which works with farmers to ensure they’re producing cotton responsibly, are increasing supplies of sustainable cotton. The material can help companies appeal to millennials and environmentally minded customers. “Offering a product with a sustainability cachet but not the added cost may meet the sweet spot of pleasing both a consumer’s conscience and wallet,” says Bloomberg Intelligence analyst Gregory Elders.
In 2015, Nike and H&M used more sustainable cotton than organic cotton for the first time. Better Cotton has grown to around 12 percent of global cotton production in 2015, vs. 0.5 percent for organic, according to BCI. Says BCI Chief Operating Officer Lena Staafgard: “By 2020 our goal is to reach 5 million farmers worldwide and account for 30 percent of global cotton production.”
Cotton Crib Sheet
*More than 27 million tons of cotton are produced annually in over 85 countries
*Ikea uses 1 percent of the world’s cotton
*It can take up to 713 gallons of water to make one T-shirt, according to the World Wildlife Fund
Better Cotton is gaining popularity in the raw materials sector and many in the industry still don’t quite understand the initiative or how to incorporate it to improve sustainability in supply chains.
The Better Cotton Initiative (BCI) is a project aimed at defining a more sustainable way to grow cotton and the organization has been working in cotton growing regions of the world since 2010 to promote measurable and continuing improvements for the environment, farming communities, and their economies.
In an effort to uncomplicate the Better Cotton concept, Robert Antoshak, managing director of Olah Inc. will conduct an interview with Patrick Laine, CEO of the Better Cotton Initiative, and Michael Kobori, vice president of sustainability for Levi Strauss & Co. on Thursday, Aug. 13 at 7:30 a.m. CDT.
The topic on the table will be: What is the Better Cotton Initiative and What Does This Program Mean For Cotton Growers?
“The interviews will be a chance for cotton growers to learn about the Better Cotton Initiative and the interest brands and retailers have in sustainable production. In turn, the program will provide the opportunity for sourcing executives throughout the industry to learn about cotton production,” Antoshak said. “By doing so, it’s our hope that program will help bridge an educational gap between both ends of the cotton textile supply chain.”
In addition to the interviews, a panel of cotton experts will discuss the cotton market, crop conditions, domestic demand, exports and farm policy.
Panelists will include O.A. Cleveland, professor emeritus, Mississippi State University, H.W. “Kip” Butts, senior cotton analyst, Informa Economics, Jarral Neeper, president, Calcot, Ltd., Dr John Robinson, Professor and Extension Specialist/Cotton Marketing, and Patrick McClatchy, executive director, Ag Market Network.
“Retailers look for sustainable products to not only meet the demand of their customers but also to encourage their supply chains to produce in an efficient environmentally manner,” Antoshak said.
To listen live, call 1 (712) 775-7085 and enter code 969119, or listen live at http://www.agmarketnetwork.net. An archived recording will also be available at www.AgMarketNetwork.net. You can submit questions through Facebook (AgMarketNetwork) or Twitter (@AgMarketNetwork).
**This story first appeared on Sourcing Journal Online here.