#1UNECE THE SUSTAINABILITY PLEDGE TRACK IT, TRACE IT, WEAR IT! Funded by the European Union International Trade Centre IN COLLABORATION WITH ITC National workshop on cross-border paperless trade facilitation and emerging technologies: TIMOR-LESTE 3 May 2023, Dili Convention Center, Dili, Timor-Leste The UNECE Initiative - Driving sustainable global textile value chains Maria Teresa Pisani OiC Trade Facilitation Section, Economic Cooperation and Trade Division, UNECE#2Drivers for Traceability and Transparency Enhancing Traceability and Transparency of Sustainable Value Chains in the Garment and Footwear Industry 1. Drivers || 2. Actors/Enablers Social forces Civil Society Market forces II V III Regulatory forces IV Technological forces UNECE THE SUSTAINABILITY PLEDGE TRACK IT, TRACE IT, WEAR IT! VI Plays an increasing role in demanding greater scrutiny of private sector actors and in driving demand for more sustainable products Consumers • Ready to pay a premium for products with greater transparency Will boycott/punish products and investors with opaque credentials III Industry Aware of reputational risk Strive to be ahead of regulation to reduce compliance risk Sees opportunity in demand growth for sustainable products IV Investors Increasingly shifting their portfolios towards ESG investments Wary of exposure to planetary boundaries and stranded assets Law makers • Responding to civil society demand for greater transparency and traceability Technology New digital and physical technological innovation reduce barriers and costs United for greater traceability, transparency and circularity in the garment and footwear sector#3The UNECE Framework Initiative Enhancing Traceability and Transparency of Sustainable Value Chains in the Garment and Footwear Industry +250 project experts +33 consultation meetings+2000 participants +900 experts in the wide network +190,000 companies represented The Toolbox 01. Policy Recommendation & Call to Action 02. Traceability & Transparency Standard & Imp Guidelines 03. Blockchain Pilots & Capacity Building Adopted in April 2021 Adopted in April 2021 Ongoing UNECE Enhancing traceability and transparency of sustainable value chains in the garment and footwear sector Recommendation No. 46 UNECE Basi and Clarity in the Leather Vale Chain UNECE Enhancing rangianmcy and Tractability for Sustainable value chains in Sarment and Footwear Welcome On Board Cotton Pilot Run Kick-Off Pilot(s) Implementing a blockchain technology for traceability and due diligence in the cotton value chain in support of a circular economy UNECE Secretariat and Project team 17 May 201 Blockchain pilots +80 partners (brands-manufacturers, IGOS, standard setters, academia/start-ups) Traceability and Tramparc in the Testile and Leather Sertar, Part 1: High-Level Process and Data Model Traceability and Trampartory in the Textile and Leather Sector Part 2: Use Cases and CCBDA Data Structures UNECE P UN/CEFACT Project webpage https://unece.org/trade/traceability-sustainable-garment-and-footwear UNECE THE SUSTAINABILITY PLEDGE TRACK IT, TRACE IT, WEAR IT! INCEPACT +30 countries SUPSI Blockchain 4 Sustainable Value Chains UNECE Blockchain solution in the garment and footwear industry UNECE Traceability & Transparency Blockchain pilot UNECE User Manual Username: Username Password: Password Show password Login United for greater traceability, transparency and circularity in the garment and footwear sector#4Blockchain Pilots Pilots geographical coverage Overview of products' use cases and value chain coverage Jeans Farm Turkish virgin cotton + recycled cotton Harvest Ginning Spin Dye Weave Produce Finish Sell Consume Recycle Shirt Farm Harvest Ginning Spin Dye Weave Produce Finish Sell ConsumeRecycle American organic cotton Blockchain Cotton Pilot Blockchain Leather Pilot Blockchain Cotton and Leather Pilot Socks Farm Harvest Ginning Spin Dye Weave Produce Finish Sell Consume Recycle Egyptian virgin cotton + upcycled cotton fibres. 30 Yarn Farm Harvest Ginning Spin Dye Weave Produce Finish Sell Consume Recycle Egyptian organic cotton Shirt Farm Harvest Ginning Spin Dye Weave > Produce Finish Sell Consume Recycle Egyptian organic cotton Pyjama Farm Harvest Ginning Spin Dye Weave Produce Finish Sell Consume Recycle Peruvian pima cotton T-Shirt Uzbek cotton Farm Harvest Ginning Spin Dye Weave Produce Finish Sell Consume Recycle Denim Fabric Farm Harvest Ginning Spin Dyo Weave Produce Finish Soll ConsumeRecyclo Indian organic cotton Haelixa Ø ZDHC OEKO-TEX® CONFIDENCE IN TEXTILES ICEC FONDAZIONE PISTOLETTO CITTADELLARTE BIELLA F 0 PANIS Partners' selection Salvatore Ferragamo Wisafood Albini GROUP Shoes Vivienne Mulberry Farming/Hunting of Hideki Slaughter Livestock preservation HUGO BOSS Brazilian leather adidas FILMAR WEBA! BERTO INDUSTRIA TESSILE Switzerland POLETTISHIRTS INDORAMA Shoes American leather Leather Calf leather Farming/Hunting of Livestock Slaughter Ride/Skin preservation ORGANIC GLOB TEXTILE GOTS LE STANDARD LEATHER WORKING GROUP I PH (F) tapestry DS MARCHI & FILDI END TO END SOLUTION PROVIDER IFC Tyson minerva foods DENIM SERVICE International Finance Corporation WORLD BANK GROUP ICA YARNS Scan-Hide bcn Leather Links RICHARD HOFFMANS world wide broker LEATHER SINCE 1899 PAsia rime sia QUALITY LIFESTYLE LEATHERS UNECE THE SUSTAINABILITY PLEDGE TRACK IT, TRACE IT, WEAR IT! Leather Tanning Tanned Raw to Spitting Shaving Sorting Fetiquering & Retanning Crusting Dysing Setting Que Sammying Tanning Raw to Tanned Sehing Shaving Sorting Retang Faturing Crusting Value chain stage covered Out of scope Drying Conditioning, Softening & Finishing Product Assembly, Dispatch Fulton and Detail consumption Dyeing Setting Out Sammying Drying Conditioning Softening & Finishing Product Assembly, Dispatch Fuinament and Detail consumption Drying Farming/Hunting of Livestock HideSkin Tanning Slaughter preservation Raw to Tanned) Splitting Shaving Ranning Fatliquoring & Dyeing Setting Out Product Sorting Crusting Sammying Conditioning Softening & Fashing Fulfiliment Accambry and Real Dispatch Bag 100 Farming/uning of Livestock dek Tanning Slaughter preservation Raw to Tanned) Spiliting Shaving Reanning. Fatliquoring f Sorting Dyeing Setting Cut Sammying Suede Finnish Goat Suede () Drying Conditioning Softening & Finishing Product Assembly Dispatch Drying Slaughter Hida/Skin preservation Tanning Splitting [Raw to Tanned Shaving Gorting Denning Fatliquoring & Crusting Dyeing Setting Out Sammying Conditioning. Softening & Rinshing Product Actembry Dispatch Value chain stage covered Pol consumption Fulfilment POST- and Deta consumation Fulfillment and Perall P consumo Out of scope United for greater traceability, transparency and circularity in the garment and footwear sector#5Adidas Use Case Claim Companies - The leathers used in the manufacturing of this shoe were originated in farms carrying strict organic practices – in line with the USDA National Organic Program - that foster the responsible use of resources, conserves biodiversity and promotes the humane handling of animals. The hides were carefully processed on LWG Gold Rated tanneries working with efficient and cleaner processes, in safe work environments. All leathers were finished in facilities using responsible and safer chemicals compliant with ZDHC's Guidelines. Value chain Minerva Foods CURTUME CENTRO-OESTE Trime PeAsia Pine Asia Minerva Foods QUALITY LIFESTYLE LEATHERS QUALITY LIFESTYLE LEATHERS O Pomme Asia imme Asia QUALITY LIFESTYLE LEATHERS QUALITY LIFESTYLE LEATHERS Information identified but Not Applicable step Out of scope 1. 2. 3. Farming/Hunting of Livestock Slaughter Hide/Skin preservati 4. Tanning (Raw to Tanned) 5. Splitting, Shaving, Sorting Information identified and disclosed 6.Retanning, Fatliquoring 7. Dyeing, Setting Out, Sammying & Crusting on 8. Drying, Conditioning, Softening & Finishing Sustainability risks covered Transparency evidences Animal Welfare ANIMAL WELFARE APPROVED BYAGW USDA ORGANIC Treaceability evidences NECE THE SUSTAINABILITY EDGE SIT. Welivery NA note LEATHER WORKING GROUP Air Pollution Water Pollution Hazardous chemicals Energy consumption Health and safety/ PPE Water Use Solid waste Delivery note, bill of lading Labour Rights ZDHC LEATHER WORKING GROUP Net Ø ZDHC LEATHER WORKING GROUP Ø ZDHC Human Rights Ở ZD HỒ PONet LEATHER WORKING GROUP LEATHER WORKING GROUP Net Net Shipping note, delivery note APACHE adidas Out of scope 9. Product Assembly, Dispatch 10. Fulfillment and Retail 11. Post- comsummpti on United for greater traceability, transparency and Narity Shipping note garment and footwear sector#6Results: Proof of Concept UNECE Traceability & Transparency Blockchain pilot UNECE Username: Password: P • Show Log Blockchain pilot landing page and interface Self A Traceability events UNECE Bet Wamber Docat type Contracto Con Tranformation Vid From Valid A unecettbcpilot.ch/graphi UNECE Sustainability Criter Origin Materials/Transformation processes 18358888 3591 Animal welfare Fibre content OA unecettbcpilot.ch/graph 1 UNECE Gasmission Product quality Selected Clam C Social/environmental perfom Certificates Assessments & Self declarations • Documents Cetifer/ Corsigne V Terat Document histor Producer Name Fianar Spa Via A. De Gasper 25030 Zocco State Highlights +70 partners in the value chains 21 countries from developed to emerging economies Blockchain potential: • Increase trust for sustainability claims Enhance B2B and B2C communication • Improve access to reliable information Policy makers Regulations and Standards Inclusive global Ecosystem Capacity-building/tech-transfer Develop transparency and traceability Key Findings and Recommendations Industry actors Commitment on sustainability Supply chain collaboration Investments in technology Trade and digitalization Business opportunities CSOs & Standard Bodies Ecosystem integration • Verification and monitoring Digital validation mechanisms Visibility of supply chain actors Technology service providers Scalability to large scale in the industry Interoperability of IT systems and evolving technologies (blockchain/ Al/ IoT/ etc.) UNECE THE SUSTAINABILITY PLEDGE TRACK IT, TRACE IT, WEAR IT! United for greater traceability, transparency and circularity in the garment and footwear sector#7#0 #TheSustainabilityPledge @UNECE f @un_ece @UNECEpage UNECE THE SUSTAINABILITY PLEDGE TRACK IT, TRACE IT, WEAR IT! THE Join us SUSTAINABILITY NABI PLEDGE TRACK IT, TRACE IT, WEAR IT! United for greater traceability, transparency and circularity in the garment and footwear sector