Better Cotton Chain of Custody (CoC) to Promote High Quality Development of the Cotton Industry

The Better Cotton Initiative (BCI), also known as Better Cotton, is a non-profit international member organization dedicated to improving cotton cultivation methods, promoting sustainable development of the cotton industry, and making good cotton a mainstream commodity for sustainable development worldwide.

At present, BCI has over 2500 member organizations worldwide, mainly including cotton planting units, cotton textile enterprises, and retail brands. The BCI project is currentlyone of the sustainable cotton planting projects in the world.

BCI Chain of Custody Standard

In May 2023, BCI released the Chain of Custody (CoC) standard v1.0, which came into effect in October. Regardless of the regulatory chain model adopted by the enterprise, it is required to comply with this v1.0 by May 2025 at the latest. So, good cotton is currently in a transitional period, and both new and old standards are effective. It is recommended that companies join the BCI Chain of Custody (CoC) standard in advance.

Which enterprises are suitable for the BCI regulatory chain

The BCI regulatory chain standard applies to all global supply chain enterprises, including (but not limited to) seed cotton traders, seed cotton trading markets, ginning factories, cotton merchants, spinning factories, factories or suppliers without spinning business (including fabric factories, dyeing factories, yarn and fabric traders, vertical integrated chemical factories), finished product manufacturers, finished product procurement intermediaries, retailers and brand merchants. If you have subcontracted (outsourced) activities, they should also be included in the certification scope when applicable.

Classification of Enterprises by BCI Chain of Custody

Class A: Enterprises can register on the BCI platform and complete relevant BCP trainingmodules. Immediately, the company can start inputting transaction information on the Better Cotton platform. The evaluation needs to be completed within the next 3 years.

Class B: Enterprises can register on the BCI platform and complete relevant BCP trainingmodules. Immediately, the company can start inputting transaction information on the Good Cotton platform. The assessment needs to be completed within the next 12 months. For the ginning plant only, evaluation will be conducted in the next season.

Class C: Enterprises need an approved third-party verifier to complete the assessment and close all non conformities before registering on the BCI platform and completing the relevant BCP training modules. Immediately, the company can start inputting transaction information on the Better Cotton platform.

What are the four modes of BCI regulatory chain

The Better Cotton CoC Standard incorporates four CoC model options: Mass Balance, Controlled Blending, Segregation (Multi-Country), and Segregation (Single Country)country).

1. Inventory balance

Inventory balance is a quantity tracking system that allows for the transfer of good cotton declaration units (BCCUs) from one good cotton product to another mixed/completely replaced product through physical mixing/complete replacement. Its function is to ensure that the number of BCCUs carried by physical cotton containing products sold through inventory balance orders throughout the entire supply chain does not exceed the number of BCCUs carried by purchasing physical cotton containing products (taking into account relevant conversion coefficients).

2. Blending mode

Blending is allowed to mix better cotton and traditional cotton in the same production batch, and can be used to make a percentage statement on the proportion of better cotton used in that production batch. Traditional cotton may be recycled cotton, recycled cotton, organic cotton, transition period cotton, or other cotton materials that meet the terms and conditions of the Better Cotton Platform (BCP).

This model is only applicable to manufacturing or processing activities starting from spinning enterprises. It is not suitable for cotton merchants to trade good cotton products, nor is it suitable for trade/transportation where there is a transaction but no actual transfer of ownership. If cotton containing products are processed in the trading or transportation blending mode, attention should be paid to maintaining product separation in their regulatory locations and making physical labeling.

3. 100% physical better cotton (from multiple source countries)

The 100% physical better cotton (from multiple source countries) model requires distinguishing better cotton from traditional cotton from the cotton field, and mixing or replacing better cotton with traditional cotton is not allowed in the entire supply chain. This model is suitable for situations where better cotton comes from multiple (or more) countries.

4. 100% physical better cotton (single source country)

100% physical better cotton (single source country) requires distinguishing between better cotton and traditional cotton from the cotton field, and does not allow better cotton from different origins to be mixed or replaced with traditional cotton from any origin throughout the entire supply chain process. Therefore, enterprises adopting this model should ensure that better cotton from a single country is physically separated from all other cotton sources (including cotton from different better cotton producing countries).

Types of Enterprises Applicable to Four Regulatory Models

The application of the chain of custody model differentiated by supplier type

The 100% physical better cotton (single source country) model is suitable for cotton fields and ginning plants in the supply chain, while the 100% physical better cotton (single source country) and inventory balance model are suitable for raw cotton merchants. For other links in the supply chain, one or more regulatory chain models can be adopted, including inventory balance model. Retailers and brand members of better cotton may purchase all orders under the chain of supervision model.

BCI Chain of Custody Certification Process

1. The organization's intention to register with BCI

2. BCI conducts preliminary screening

3. If approved, the organization will be invited to fill out the Chain of Custody Standard v1.0 registration form

4. Divide the organization into categories A, B, and C based on risk level

5. If applicable, the organization will contact ASCP Services as the verifier for traceability assessment

6. Organize correction of non conformities

7. Organizations gain access to the BCI platform

Evaluation Decision Form

Positive Decision: Issue a positive decision to the supplier who has successfully completed the assessment, demonstrating their ability to meet the requirements of the regulatory chain standards.

Negative decision: Issue a negative decision to suppliers who have fundamentally failed to meet the requirements of the regulatory chain standards.

As shown in the figure below, the evaluation decision is made based on the compliance level of regulatory chain requirements and other risk factors.