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A lot of certified sustainable products aren't, and that's about to change

It's time we applied the same standards across supply chains and implement full traceability for certified sustainable raw materials — and to put an end to the myth of mass balance.

Cocoa farming

A red and yellow cocoa pod in Akim Tafo, Ghana. Via Shutterstock.

Author's update: BCI has announced it is adopting full traceability starting in 2022, and GOTS has removed all reference to mass balance from its website

Conscious consumers often rely on certifications such as Rainforest Alliance or Organic to tell them what's sustainable. But very often, the certification on the label doesn't match the product inside.

Last year, an audit by Utz — the world's biggest certifier of sustainable cocoa, now part of Rainforest Alliance — found more than 4,000 certified cocoa farms inside the national parks and protected forests of Côte d'Ivoire. This Fall 20,000 tons of cotton labeled as coming from Global Organic Textile Standard certified farms were found to be conventional cotton with a fake label. In October, the world's largest cotton certifier — the Better Cotton Initiative (BCI) — was forced to suspend work in China's Xinjiang province where forced labor is endemic and where 20 percent of BCI cotton was sourced.

It's time we put an end to the myth of mass balance.

Why were these unsustainable supply chains able to exist despite certification schemes designed to ensure sustainability? Because they rely on a spotty verification scheme called "mass balance," which only verifies a small portion of the raw materials that are eventually certified. In the words of the BCI:

Mass balance functions much like renewable energy. If you purchase renewable energy credits, a power line is not run from, say, a wind farm directly to your house. Rather, the credits are proof that a certain amount of renewable energy has been added to the existing power grid. This energy might not be powering the lights in your house, but nonetheless, your purchase ensures that greener energy is added to and pulled from the power grid. In this way, by committing to sourcing Better Cotton, brand members can be assured that they are supporting more sustainable cotton production regardless of where that cotton ends up.

Unlike renewable energy credits, which blend wind power with natural gas, mass balance certification blends fair trade with child labor; regenerative agriculture with deforestation. What's more, only a small fraction of the materials certified sustainable are actually audited (typically 1 to 2 percent). The BCI's own task force singled out mass balance as the reason no one can be sure that certified cotton is, in fact, sustainably grown.

Mass balance had a place and time: it was introduced decades ago, when the idea of verifying every batch of raw material through a global supply chain was unimaginable. But now that the internet reaches every corner of the planet and cheap smartphones are everywhere, mass balance is being replaced by traceability: the same standard that exists for the food we eat and the drugs we take.

Traceability works by accounting for every transaction, from farm to table. It's what allows recalls to happen: When contamination is detected in a batch of finished goods, producers quickly can identify the factory or the farm it's related to. The same mechanism works for sustainability: Without tracing every transaction, sustainable and unsustainable, it's impossible to know that a certified product is actually sustainable. On the other hand, by tracing the entire volume of goods traded, it's possible to detect issues that could point to forced labor: suspiciously high yields; small payrolls; suspicious trading patterns.

Traceable supply chains don't have to be perfect. Some manufacturing processes (such as ginning cotton) are expensive to do in small batches, so certified and non-certified raw materials get mixed together. But mass balance certification doesn't require any traceability for the non-certified portion of the raw materials, so it's impossible to know whether the finished product was made sustainably or using forced labor.

It should be the opposite: Certified supply chains should be 100 percent traceable, even if that means allowing a portion of the raw material to be unsustainable.

The era of mass balance is coming to an end. U.S. Customs and Border Protection has steadily ramped up seizures of U.S.-bound containers suspected of being manufactured using forced labor, with a particular focus on cotton from Xinjiang. To import goods without risk of seizure, companies need to show that they know where the raw materials were produced, both certified and non-certified.

Thanks to advances in supply chain traceability technology, the price of knowing what you're buying is less than 1 percent of the cost of goods (usually 0.1 percent or less). And traceability is worth its weight in gold, not just because customers and consumers can once again trust certifications, but because resources can be focused on the parts of the supply chain that need them most.

It's time we applied the same standards across supply chains and implement full traceability for certified sustainable raw materials — and to put an end to the myth of mass balance.

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