Why it matters:
- Consumers have become increasingly conscious of sustainability, with 73% saying they want to significantly decrease the impact they have on the environment.
- As businesses heed rising consumer demand for eco-friendly goods, the global, ethical fashion market is poised to grow to $8.25 billion by 2023, according to The Business Research Company.
- But just as products touted as sustainable flood the market, consumer skepticism around the green designation has grown. To counter that wariness, fashion brand Covalent is tapping blockchain technology to provide supply chain information to consumers and product transparency.
A maker of sustainable fashion accessories is using blockchain technology to prove its environmental bona fides to consumers, who are increasingly voting with their dollars for eco-friendly brands, yet more alert than ever to greenwashing.
Covalent makes eyewear, handbags and other products out of AirCarbon, a material that was developed by its parent company, Newlight Technologies. AirCarbon is made using a process that the company says draws on carbon that is already present in the environment without releasing additional carbon into the atmosphere, giving it a net negative carbon footprint.
The process of creating AirCarbon mimics the way certain microorganisms in the ocean digest greenhouse gasses as a food source. Newlight’s technology isolates the carbon from this process and converts it into material that can replace a variety of other materials, including plastic, fiber and leather.
“Because it's a naturally created material, if it ever ends up in the environment it will go away in the same way that a natural material would,” said Mark Herrema, CEO of Newlight Technologies, in an interview with CO—.
[Read here on making a business more sustainable.]
If you are looking at two different T-shirts, we think it would be important for you to know that one of them used 70 gallons of water to make it, and the other one used 700 gallons of water. Maybe it doesn't change which one you choose, but at least gives you the opportunity to make that choice.
Mark Herrema, CEO, Newlight Technologies
Addressing consumer skepticism around sustainable claims
The company started using blockchain, a distributed ledger that records the origins of a digital asset, as a verifiable way to track its own carbon footprint, but it has since applied blockchain’s source-tracing capabilities to the consumer-facing side of its business.
Each Covalent product is printed or etched with a 12-digit blockchain number it calls the Carbon Date, which indicates when the material used to make the item was produced. Consumers can plug that number into Covalent’s blockchain tracker to see all of the steps that went into creating the product and the specific carbon footprint associated with it, along with information about the independent third party that verified the pathway from source to final product.
“It gives us the ability to communicate our environmental footprint in a way that no other technology really could,” said Herrema.
So, “If you are looking at two different T-shirts, we think it would be important for you to know that one of them used 70 gallons of water to make it, and the other one used 700 gallons of water,” he said. “Maybe it doesn't change which one you choose, but at least gives you the opportunity to make that choice.”
Although blockchain is often associated with cryptocurrency such as Bitcoin, it is also increasingly used in a range of other applications, such as ingredient tracing for food safety. The technology provides a secure record of transactions that can be used to track the movement of items through a supply chain.
In Covalent’s case, it is working with IBM business partner Cognition Foundry, a services provider and systems integrator, to host the IBM Blockchain solution on an IBM LinuxONE server.
“The beauty with blockchain is that the data can't be changed, and it's held by multiple sources,” said Herrema. “It gives a level of trust.”
Consumers would otherwise likely be skeptical of a company that claimed to have a negative carbon footprint, he said, so making the blockchain data available to consumers removes any doubts they might have about the company’s assertions.
[Read here on expert ways to integrate tech into your business model.]
Along with aesthetics and trendiness, sustainability gains ground as a key product attribute
Jessica Ramirez, a retail research analyst at Jane Hali & Associates, said that although consumers still value other product attributes, such as appearance and trendiness, sustainability is becoming a more important consideration.
Efforts such as those by Covalent help inform consumers about what goes into sustainability, she said.
“I would say the consumers are definitely interested, but the companies are learning that they also have to educate the customer,” said Ramirez.
The COVID-19 pandemic, which disrupted supply chains for many manufacturers and retailers, has also given brands an opportunity to rethink their sourcing models and incorporate more sustainable practices, she said.
Research from GlobeScan found that consumer interest in sustainability increased in 2020, with 73% of consumers saying they want to decrease the impact they have on the environment by a large amount, compared with 64% who said so in 2019.
“I think we will begin to hear a lot more about sustainability all across the board, and we will hear about a lot more innovations like this [transparency initiative from Covalent],” said Ramirez.
Herrema said he is hopeful that more consumer product companies will begin to use blockchain to support their sustainability claims and to help consumers make more informed decisions.
“We think that blockchain tracking in the way that we're doing it could potentially influence other brands, and possibly get to the point where consumers demand information, and information that's tracked via blockchain,” he said.
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