Better Cotton Traceability Requirements. Better Cotton Initiative

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Merilyn McBride
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1 Better Cotton Traceability Requirements Better Cotton Initiative

2 What takes place in the supply chain? Placing BCI Orders - Impact Retailers & Brands Garment Order Fabric Order Yarn Order Lint Order Total cotton footprint 4 the order Retailers & Brands 50% BCI 50% BCI 50% BCI 50% Better Cotton Better Cotton + BCCU 50% of cotton footprint 4 the order is now Better Cotton It is not about procuring products that contain Better Cotton It is about transforming your supply chain into a more sustainable one

3 CLAIMS BY RETAILERS AND BRANDS» For a retailer/brand to make any credible claims about the volume of Better Cotton the suppliers sourced for them, they must receive an equal number of BCCUs via BCI s traceability system.» 1 BCCU represents 1 KG of lint Better Cotton sourced by a spinner.» BCCUs are transferred between suppliers using the Better Cotton Tracer.» BCCUs can be transferred between suppliers electronically if both the buyer and the seller are in the system.» BCCUs can be transferred to a supplier who is not in the system via a paper documen called Output Declaration Form (ODF).

Traceability System (Volume not Fiber) Proof = Receipt of BCCUs CCUs are received from suppliers and passed onto the customers as proof of Better Cotton sourcing in the supply chain etailers and

4 Traceability System (Volume not Fiber) Proof = Receipt of BCCUs CCUs are received from suppliers and passed onto the customers as proof of Better Cotton sourcing in the supply chain etailers and brands collect these BCCUs from their suppliers to make their total claims hain of custody rules provide suppliers with a set of rules that explains how fiber can be used in production and how the reportin CCUs can be made

5 Receiving proof from vendors Traceability and documentation requirements Ginners Ginners Ginners Traders Traders Traders Spinners Spinners Spinners Fabric Mills Fabric Mills Fabric Mills Garment Man. Garment Man. Garment Man. B C C U Retailer Retailer Retailer ODF issued by a spinner ODF issued by a fabric mill Electronic receipt of BCCUs + ODF issued by a fabric mill

6 Example of Output Declaration Form

7 BCCU Allocation to products Calculation of BCCU allocation to yarns & other products BCI s traceability system uses two methods to calculate the lint volume used in spinning depending on the type of the yarn These conversion rates help the system allocate the correct number of BCCUs to yarns and other subsequent products mad these yarns

8 Better Cotton Chain of Custody Rules Better Cotton Initiative

9 OVERVIEW To learn more about different chains of custodies, you can refer to the following video:

at the gin level in all countries 100% Better

10 GIN LEVEL PHYSICAL SEGREGATION Better Cotton is kept physically separate from conventional cotton at the gin level in all countries 100% Better Cotton Bales Total available lint Better Cotton globally

11 MASS-BALANCE SYSTEM BASICS AFTER THE GIN LEVEL 3 kg of Cotton Purchased BCI Credit: 2 BCCUs Mass-balancing applies to bales, yarns, fabrics and garm It allows the natural flow of cotton through the supply ch remain undisturbed Same Specs + Same Quality = Same Product with BCCU

MERCHANTS MASS-BALANCE W/ A COUNTRY SCOPE Spinning Mill in Warehouse in TX Needs Merchant Yarn strict spun ships middling and physical shipped cotto for Better using a conventional Cotton strict

12 MERCHANTS MASS-BALANCE W/ A COUNTRY SCOPE Spinning Mill in Warehouse in TX Needs Merchant Yarn strict spun ships middling and physical shipped cotto for Better using a conventional Cotton strict middling to the order mill Spinning Mill in NC Strict middling cotton from a BCI licensed US Grower Warehouse in SC Merchant Mill Needs And allocates middling ships BCCUs middling cotton to cotton to for yarn this a BCI shipment to the order mill Middling cotton from a non-licensed US grower The rules: Merchants don t have to ship physical BC bales to spinners BCCUs can only be transferred between of the same origin

13 MERCHANTS MASS-BALANCE W/ A COUNTRY SCOPE Warehouse in CA Spinning Mill in Punjab Supima cotton from a licensed US Grower Warehouse in INDIA Shankar 6 cotton for a BCI order Shankar 6 cotton from a nonlicensed INDIAN grower The rules: Merchants don t have to ship physical BC bales to spinners BCCUs can only be transferred between of the same origin

14 SPINNING MILLS - MASS-BALANCE W/ A SITE SCOPE Better Cotton Tracer Inv entory Better Cotton Yarn 1 kg Better Cotton (Any Origin) Conv entional Cotton Yarn 1 kg Conv entional Cotton (Any Origin) Physical Cotton Inv entory Spinners don t have to use the physical Better Cotton bales BCCUs can be transferred between bales of different origins Spinner can keep their existing blend

15 TURKISH SPINNING MILL tter Cotton from Burkina Faso, Brazil, and Turkey Better Cotton Tracer Account Inv entory Better Cotton Yarn (Greek, BF, Turkish, US Blend) Conv entional cotton from the US and Greece Physical Cotton Inv entory Conv entional Cotton Yarn (Greek, BF, Turkish, US Blend) Spinners don t have to use the physical Better Cotton bales BCCUs can be transferred between bales of different origins Spinner can keep their existing blend

16 SPINNERS MASS-BALANCE W/ A SITE SCOPE Better Cotton (Any Origin; Any Specs) Spinner Conventional Cotton (Any Origin; Any Specs) The rules: Spinners don t have to consume physical BCI bales to make the yarn BCCUs can be transferred to any yarns made with any fibers regardless of the country of origin of fiber used

17 Team Contacts Please contact any of us with your questions BCI Supply Chain Team: Lea Michalczik BCI Traceability Systems Coordinator Kerem Saral BCI Supply Chain Manager Direct Line: Skype ID: keremsaral Manish Gupta - India Supply Chain Coordinator manish.gupta@bettercotton.org Muhammad Shuiab Pakistan Supply Chain Coordinator muhammad.shuaib@bettercotton.org Leo Xiao - China Supply Chain Coordinator leo.xiao@bettercotton.org Seyma Karacay Turkey Supply Chain & membership Officer Seyma.Karacay@bettercotton.org

Advanced Better Cotton for Fabric Mills: How to transfer BCCUs

Advanced Better Cotton for Fabric Mills: How to transfer BCCUs Better Cotton for Fabric Mills: How to transfer s WHAT IS THE BETTER COTTON INITIATIVE? The Better Cotton Initiative (BCI) helps farmers to grow cotton in a way that reduces stress on the local environment