# How Blockchain Technology Can Help the Fashion Industry Make Verifiable Green Claims Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-11-11 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Fashion industry under fire: Greenwashing and the need for Meta Description: Discover how blockchain technology can help fashion companies combat greenwashing and prove their sustainability claims with transparent and verifiable data. URL: https://financedigest.com/how-blockchain-technology-can-help-the-fashion-industry-make-verifiable-green-claimshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1359584148-1736814880025-compressed.jpg) _By_ **_Dave Sandor,_** _CEO and Co-founder of Allinfra_ The fashion industry has [increasingly come](https://www.financedigest.com/food-fiber-market-to-exhibit-increased-demand-in-the-coming-years.html "Food Fiber Market to Exhibit Increased Demand in the Coming Years") under fire for its negative impact on the environment. According to the UN, the fashion [industry is responsible](https://www.financedigest.com/corporate-social-responsibility-within-the-festival-industry.html "Corporate Social Responsibility Within The Festival Industry") for [8-10% of global emissions](https://unece.org/forestry/press/un-alliance-aims-put-fashion-path-sustainability). And thanks to the trend of [fast fashion](https://www.financedigest.com/at-the-home-of-zara-fast-and-slow-fashion-collide.html "At the home of Zara, fast and slow fashion collide") – inexpensive clothing produced rapidly by mass-market retailers – it’s not surprising that between 2000 and 2014, clothing production doubled with the average consumer buying 60 percent more pieces of clothing compared to 15 years ago. In response to the changing [ESG landscape and consumer demand for green](https://www.financedigest.com/green-bonds-are-set-to-drive-corporate-esg-debt-out-of-slump-in-2023-barclays.html "Green bonds are set to drive corporate ESG debt out of slump in 2023 -Barclays") choices, certain fashion retailers have released collections marketed as sustainable – such as the “Responsible Edit” from Asos, Boohoo’s “Ready for the Future” range and “George for Good” at Asda. However, these three UK fashion retailers [are under investigation](https://www.investmentweek.co.uk/news-analysis/4054338/boohoos-risks-priced-fashion-wrong-esg) by government watchdog group Competition and Markets Authority (CMA) on whether their green claims were exaggerated. Fashion [brands currently make up 25% of greenwashing complaints to the CMA –](https://www.financedigest.com/2016-the-fight-back-of-the-established-brand.html "2016 – THE FIGHT BACK OF THE ESTABLISHED BRAND") complaints that organisations are making false or exaggerated claims that their products are more environmentally-friendly than they actually are. This creates an investment [risk](https://www.financedigest.com/russia-could-hike-rates-in-2023-if-inflation-risks-have-big-impact-cenbank.html "Russia could hike rates in 2023 if inflation risks have big impact -cenbank"), as Morningstar rates ASOS with a medium ESG risk and Boohoo with a high rating. Even though some of these brands, such as ASOS, have made public net zero commitments, mass-market fashion retailers are still being called out for using vague [marketing language around ‘conscious,’ ‘sustainable’ or ‘green’ collections without backing](https://www.financedigest.com/analysis-bond-traders-get-their-swagger-back-in-rate-obsessed-markets.html "Analysis-Bond traders get their swagger back in rate-obsessed markets") up any of these claims. It will likely be a long transition from where we are now with fast fashion to a net-zero future, but the [brands that are truly committed to ESG goals could start actual sustainable](https://www.financedigest.com/big-brands-set-to-miss-plastic-sustainability-targets.html "Big brands set to miss plastic sustainability targets") collections with verifiable, transparent claims. One solution to the fashion industry’s greenwashing [problem could be to leverage blockchain](https://www.financedigest.com/the-problem-with-blockchain.html "The problem with Blockchain") technology. As software developers for blockchain-based ESG and climate [finance technology](https://www.financedigest.com/the-benefits-of-adopting-cloud-technology-in-the-finance-industry.html "The benefits of adopting cloud technology in the finance industry"), we believe a three-step layered approach could help fashion companies achieve this – where each step builds on the previous one – of tracking, calculating, then offsetting. First, there needs to be provenance of the [supply chain](https://www.financedigest.com/how-to-bring-immediacy-back-to-the-supply-chain-with-faster-payments.html "How to Bring Immediacy Back to the Supply Chain With Faster Payments"). The distributed [ledger aspect of blockchain](https://www.financedigest.com/blockchain-a-case-for-the-general-ledger.html "BLOCKCHAIN: A CASE FOR THE GENERAL LEDGER") technology can enable transparent and accurate end-to-end tracking of product information throughout the manufacturing process and supply chain, and enable consumers to monitor how garments progress from raw materials to finished goods. Once the brand has verifiable information on the inputs, it can then confidently calculate the carbon footprint caused by the production of these garments by [recording data on scope 1 & 2 emissions](https://www.financedigest.com/global-energy-related-co2-emissions-edged-up-to-record-high-in-2022-iea.html "Global energy-related CO2 emissions edged up to record high in 2022 – IEA") – direct greenhouse gas emissions that occur from sources that are controlled by an organisation and indirect emissions associated with the purchase of electricity, steam, heat, or cooling. This can be done reliably with limited manual work on a blockchain-based system supported by IoT ( [Internet of Things](https://www.financedigest.com/2017-the-year-of-the-internet-of-some-things.html "2017 – The year of the Internet of ‘SOME’ Things")) devices. This would mean collecting climate-relevant data (e.g. energy consumption) directly from smart devices or [systems in the manufacturing process](https://www.financedigest.com/solvency-ii-pushing-existing-systems-and-processes-harder-is-not-enough-for-compliance.html "Solvency II: pushing existing systems and processes harder is not enough for compliance") and recording that data in a way that is verifiable, auditable and tamper-proof. The final step of this approach is to offset emissions associated with the sustainable collection. To truly show evidence that a line of garments is ‘green’ or ‘sustainable,’ a [brand can use the accurate climate-relevant data it has captured to offset any negative environmental impact](https://www.financedigest.com/first-listener-wide-study-reveals-brand-impact-of-radio-livestream-and-podcasts.html "First listener-wide study reveals brand impact of Radio, Livestream, and Podcasts"). Imagine walking into a [store and being able to scan a code to view the carbon credits purchased by the retailer](https://www.financedigest.com/revolutionising-retail-zappers-smart-payment-solution-enables-stores-to-instantly-understand-and-reward-shoppers.html "REVOLUTIONISING RETAIL; ZAPPER’S SMART PAYMENT SOLUTION ENABLES STORES TO INSTANTLY UNDERSTAND AND REWARD SHOPPERS") that offset the creation of the ‘conscious’ collection. Because the data has been collected in granular, auditable detail, brands could use [blockchain technology](https://www.financedigest.com/venom-foundation-and-hub71-partner-to-accelerate-growth-and-adoption-of-blockchain-technologies-from-abu-dhabi.html "Venom Foundation and Hub71 Partner to Accelerate Growth and Adoption of Blockchain Technologies from Abu Dhabi") to show to customers – down to the individual batch level – which carbon credits they have retired to offset its carbon footprint. This three-step strategy is not the only solution and it may not be right for every fashion company, but it does demonstrate how technology can help fashion retailers not only be more sustainable, but also show customers – and [investors –](https://www.financedigest.com/top-ten-biggest-mistakes-by-novice-investors-and-how-to-avoid-them.html "TOP TEN BIGGEST MISTAKES BY NOVICE INVESTORS – AND HOW TO AVOID THEM") that they are ready to be more transparent.  Many investors have their own ESG [targets to meet in terms of the companies](https://www.financedigest.com/britain-toughens-up-diversity-targets-for-uk-companies.html "Britain toughens up diversity targets for UK companies") they invest in, and consumer sentiment is only going one way. Those fashion businesses able to truly reduce their [carbon footprint](https://www.financedigest.com/ecb-can-cut-carbon-footprint-by-shedding-bonds-of-biggest-polluters.html "ECB can cut carbon footprint by shedding bonds of biggest polluters") will be rewarded with customer loyalty over the long term – making them both better investments and better for the planet. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---