How It Works
Supply chain transparency from farm to finished products
It all starts with verified, authentic Protocol Verified Cotton
- The Credit System: The Protocol Credit Management System (PCMS) starts at the gin when the Participating Producer’s cotton is ginned and each unique Permanent Bale Identification number (PBI) is attached. At this point we know the exact gin weight and can mint an exact amount of Protocol Credits, where one Protocol Credit is minted for each kilogram of U.S. cotton fiber in the bale. This important verification step, where every PBI is verified against a USDA database and the actual Gin weight is captured, raises the standard of data assurance within any cotton sustainability program globally.
- The Supply Chain System: The Supply Chain System within the PCMS is designed to provide an unprecedented level of detail to supply chain transparency, further enhancing the value the U.S. Cotton Trust Protocol is delivering to its members. Article level details and transactions will be captured and verified within the Supply Chain System tracking the consumption of Protocol Equivalent U.S. cotton throughout our members’ supply chains.
Trusted Third Party Verification
The Trust Protocol incorporates a comprehensive program of verification against Trust Protocol benchmarks, in the form of both second-party and independent third-party audits of grower performance through Control Union Certifications—the latter through allocated on-site visits.
Control Union Certifications has certified over 150 industry standards programs worldwide, including working as a key partner in the early development and piloting phases of Field to Market’s Impact Claim Verification Protocol.
How does it work?
Supply Chain Transparency
The Protocol Credit Management System (PCMS) is a powerful blockchain solution leveraging the strength of two distinct but interconnected technologies, which allow for the transparent tracking of Protocol Credits and Protocol Equivalent Fiber throughout the entirety of our brand and mill partners operations, raising the bar on sustainability reporting and supply chain transparency along the way.
- It starts with the minting of Protocol Credits: Protocol Verified Cotton fiber is grown and harvested on our Protocol Producer’s farms. As this fiber is ginned, we capture each bale’s unique PBI and gin weight and verify it against a USDA master list for authenticity and duplication. Once verified each kilogram of Protocol Verified Cotton fiber is minted into a Protocol Credit.
- Staying connected to our U.S. cotton producers: Each of these digital tokens is uniquely identified and systemically linked to the original PBI.
- Operating with a small footprint: While the Trust Protocol’s main goal is to drive reductions in the environmental footprint of producing U.S. cotton, it is equally important that our PCMS be designed to create the smallest interruptions to our members supply chains as possible. It is the main reason why Protocol Credits do not trade between supply chain participants. They go into the Protocol Bank once they are minted and are only taken out when Brand-Retail Members make their final Protocol Credit Claims. At every stage in the supply chain, no mill members ever needs to worry about finding of holding Protocol Credits, they only need to focus on using U.S cotton and running their business.
- Transparency throughout the supply chains: The most recent development of the overall PCMS is the introduction of a new technology platform, that will allow for the tracking of shipments and consumption of Protocol Equivalent Cotton across the full spectrum of our Brand-Retail members supply chains. This starts with the capture and verification of the initial shipment of U.S. cotton fiber to Trust Protocol Mills at the beginning of the supply chain. Shipments are uploaded into the system, including individual PBI #’s for every bale shipped, and verified against the USDA master list for authenticity and duplication. At every stage afterwards, article level transaction details are captured and verified for shipments up the supply chain of yarns, fabrics and finished products. These transactions are captured in the system, placing virtual Protocol Eligible Inventory of U.S. cotton-based fiber, yarns, fabrics and products in the system accounts of each of our participating Mill Members. As transactions are entered in the system, inventory consumptions are recorded, and document verifications are performed to provide an added level of data integrity assurance to our members.
- Connecting back to Protocol Credits and Claims: At the end of the supply chain, our Brand-Retail Members receive their finished products and a system notification informing them of the exact amount of Protocol Equivalent Cotton fiber that was consumed in making the specific products, allowing them to finalize their Protocol Credit Claim. The level of system accuracy and data assurance that is provided through this system in combination with the strong data capture and verification integrity allows our Brand-Retail Members to confidently make claims related to their consumption of Protocol Credits and the environmental impacts associated with them.
Trusted Verification Methodologies
The second-party verification process will start with an aggregator contacting the producer to notify them that second party verification is needed. The aggregator will also verify the self-assessment and use of the data tool during this time to ensure that second-party verification can proceed. Next, the second-party verifier will contact the producer to review the verification process and may request documentation.
The verification documents will be uploaded to the Protocol Dashboard and/or emailed to the second-party verifier. Electronic validation such as FaceTime, videos, and/or pictures will be allowed to the greatest extent possible. The use of technology to expedite the second party verification process is permitted and recommended.
A second-party verifier is a contracted specialist or representative of the aggregator who aids the grower in completing self-assessment and attests to the accuracy of information supplied. Twenty-five percent of producers from each region will be second party verified.
Additionally, second-party verification will:
- Only be conducted by individuals who have successfully completed a common training program (1 day) such that their audits will be in accordance with a standard format agreed upon by all stakeholders; and
- Be sufficiently robust such that third-party audits may be considered a redundant unnecessary expense to some brands/retailers.
Further, if a grower is subject to a third-party audit and fails due to an issue that should have been addressed during the second-party verification process, the second-party verifier stands to lose their accreditation because of implied negligence of duty.
The third-party verification process will be initiated by the Trust Protocol by making contact with the member grower and the aggregator directly to notify them of being selected for a third-party verification visit.
Verification documents can be uploaded to the Trust Protocol Dashboard and FaceTime, videos, and/or pictures will be allowed to expedite the verification process as necessary. Additionally, the third-party verifier may need to visit the farm if additional information is needed to complete the audit. All farm visits will occur after the harvest.