After nearly seven years of convening actors across the cotton sector to align on issues critical for the industry’s  future, the Cotton 2040 initiative is coming to a close. Here, Charlene Collison, Associate Director at Forum for the Future and director of Cotton 2040 reflects on how the sector has changed, and its readiness for the future.

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The cotton industry has come a long way in the past decade or so. Once touted as deeply unsustainable, it has made significant strides to change its legacy of unacceptable environmental impacts and imperial-style inequality. Yet this is no time for self-congratulation. As much as the industry has changed, greater transformation is needed to be fit for the future that’s fast emerging.

Firstly, let’s celebrate

The good news is that sustainable cotton is scaling, the sector is more aligned, and action to reduce cotton’s harmful impacts is gaining momentum. 

• Cotton produced according to sustainable practices has grown to around 30% percent of the market. 
• Commitments from brands and retailers to source from major sustainable standards has moved from just a leading few to many, with over 162 companies making public commitments to source 100% sustainable cotton by 2025
• Sustainable standards, not long ago often competing against one another for limited market share, are now increasingly aligned and collaborative in their efforts 
• Alarmed by human rights abuses in Xinjiang, public action and legislation on due diligence to human rights in the supply chain has never been greater or more influential. 
• And collective ambition and action to reduce GHG emissions and other impacts is gaining traction.

Given the largely colonial structure of the cotton sector, this is a lot to have achieved in the last 10-15 years, and is thanks to the dedicated efforts of many organisations and individuals. But as much as their combined efforts have shifted the industry for the better, the world is changing even faster. 

The time for focus on reducing harm is past; the task now is to transform the cotton industry to be regenerative, just and resilient so it can adapt and survive in the future.

What’s changing?

The future context is being shaped by dramatic changes, particularly in climate, biodiversity, regulation, and supply chain disruption – and how we adapt to these.

Whatever actions we take now, the world in 2040 will be a much more volatile and uncertain place in which cotton – and all agricultural crops – will be grown. Based on current commitments, we’re heading towards at least 2.6 degrees of warming, and severe disruption is already a certainty. Given the likelihood that global mean temperatures will cross the 1.5 threshold by the early 2030s, the next decade will see us faced with irreversible and devastating impacts.

There are wide-ranging implications for cotton. As Cotton 2040’s climate risk analysis shows, farmers in all major cotton growing regions will be exposed to climate hazards, from drought to flooding and storms. The effects on production landscapes will be dramatic, with higher risk of crop failure and income loss, for which smallholder farmers (who produce most of the world’s cotton) are least resourced to cope. In some regions, exposure will be so extreme that cotton growing will not be viable. Pressures on land use and water may favour food crops over fibre. Making progress with adaptation and mitigation is a race against time, doing what’s necessary while society is less diverted by fire-fighting or jumping to respond to each new disaster.

Our understanding of humanity’s interdependence with a thriving natural world is mounting, even as we become aware of the scale of its devastating losses, and the dangers those present to human flourishing. Recognition of the importance of biodiversity, and concepts like ecosystem services, are beginning to translate into financial rewards for farmers who adopt practices that can regenerate depleted production environments. With this comes a different set of implications for the role of the farmer, including a shift from “producer” to a wider remit encompassing land stewardship, and a growing appreciation for the reciprocity between agriculture and human culture.

The regulatory and consumer landscape, too, is shifting. The European Commission’s recently introduced rules require more accurate environmental claims, and its Green Deal features new proposals to make sustainable products the norm. Across the Atlantic, proof of compliance with human rights requirements have limited imports into the US.  Certifications that don’t ensure full traceability are increasingly under pressure to do so.

Meanwhile, chronic series of disruption are challenging assumptions about the global flow of goods on which modern supply chains have come to depend - a trend only likely to increase as carbon pricing, climate impacts, and conflicts heighten.

So  the context for how a future industry will operate will be radically changed from the conditions in which the sector has evolved. Achieving resilience and viability requires a deep level of transformation in how the industry works. So what could 2040 look like for cotton’s production and supply chains if we designed its systems to actually replenish nature and human wellbeing?

Transformation to a resilient cotton sector

In a 2040 vision of a cotton sector that is adapting to this changing context, there are a few givens. Regenerative farming practices are the norm, and net zero policies across the supply chain are mainstream, if  not mandatory. Full traceability is ubiquitous. Respect for human rights and equity through the supply chain is expected and safeguarded. But these are not just “improvements” on today’s supply chain structure; the industry has re-shaped itself around new principles, including:

• Farmers as partners. Supply chains are shorter, with closer relationships between buyers and producers,  traders supporting farmers in new ways, and more agency and voice by growers and workers in shaping decisions which impact them. Farmers and buyers share risk through methods which provide assurance of viable livelihoods.
• Aggregation of farmer support, such as co-operatives, provide services that help farmers, particularly smallholders, to better cope with cycles of climactic events. Landscape approaches have been adopted at scale, where cotton is grown with other compatible crops in rotation which share a common and collective market. In fact, cotton farmers will no longer be just ‘cotton farmers’  - they will farm cotton and other crops, and receive income from services such as ecosystem services markets.
• Less virgin, more recycled. Technologies and economies of scale have raised the quality and reduced the cost of recycled cotton, and circularity and recycling are embedded within the supply chain. Fast-paced recycled proliferates alongside “slower” luxury virgin fibre.  Virgin and recycled blends integrate growers and recyclers within processing functions. Production is more geographically localised, and volumes of wasted clothing in landfills is a scandal of the past - like the excessive consumption habits of a society that has had to learn to live better with less.
• Data is a force for good, collected and used responsibly. It serves all actors in the supply chain equitably, and data collection respects privacy and the rights of farmers to own (and sell) their data.
• A systemic approach to adaptation has strengthened the resilience of communities which depend on cotton growing and processing, well beyond the current (and woefully limited)  siloed investments in climate smarter production. Critically, investments in just transition are supporting communities for whom cotton is no  longer a viable source of income to transition to other livelihoods. 
• Incentives have switched from short-term profit to thriving long-term, and from incentivising extractive practices to rewarding stewardship that puts more into ecosystems and society than it takes out. Business models have turned the current value proposition on its head, changing how value is recognized and shared. Ecosystem services markets and impact incentives that encourage regenerative practices are mainstreamed, and new business models have evolved that recognise and value informal work, enable land ownership rights, and promote social and gender equity. 

Far-sighted or fairy tale?

When so much effort is already being put towards change for the better, this call for a deep and urgent transformation to a regenerative and just cotton industry may, to some, seem far-fetched. But it’s precisely because these efforts are already in place and gaining momentum that I believe that such a change is possible - and many of the solutions are already starting to emerge. Our obstacle is not that we cannot create change, but that our focus tends to be on reacting to immediate crises, and on band-aid solutions to current disruptions and mid-term challenges. If we can lift our level of ambition from reducing or even eradicating harm to creating a cotton sector that actually contributes to planetary and human thriving, a whole new vision and set of possibilities emerge. Of course it’s a challenge, but much less so than the alternative, bleaker future.  Let’s work to solve today’s problems with the aim of re-imagining, prototyping and building new models for the cotton industry that can continue to work in 2040, and beyond.

To find out more about emerging business models and climate adaptation in cotton, contact Hannah Cunneen at [email protected]; to talk to us about our work to prototype supply chain models of the future, contact Neil Walker at [email protected].