BCI QUARTERLY REPORT Q2 2017: 1 April – 30 June

Introduction You will find in this report a new special focus section outlining progress in the Results, Impact, and Learning Programme. The programme is a vital part of BCI as we build the framework for communicating the impact of the Better Standard System’s implementation.

This document contains confidential information and is intended solely for the use of the individual or entity to whom it is addressed. 1 Q2 2017 Highlights

Better Cotton Demand Progress on Revising the Demand for Better Cotton at the spinner and BCI Standard retailer and brand levels remain strong, with The 2nd public consultation of the BCI a further increase in supply chain uptake standard closed on 29 January 2017 and the expected at the end of the harvest season. Standard Revision Committee reviewed the The total retailer and brand declarations of full set of comments from the consultation. Better Cotton between January 1st, 2017 and Recommendations on changes to the June 30th, 2017 was 289,000 metric tons Standard are being submitted to the Council (MT). Declarations by spinners during the for review and discussion by stages. The same time period was 612,577 MTs. process should be completed by the end of this year. New Members BCI Information Infrastructure During Q2, 103 members joined BCI. We are delighted to announce that the first Brazilian A new in-house IT Project Manager started retailer and brand, Lojas Renner SA joined on 1 June and is leading BCI’s work to during Q2. Total number of members is now integrate and link its diverse data and at 1,093. reporting platforms, as well as to lead projects automating data entry and Communications facilitating data analysis, which has been predominantly manual to date. This is a For the second quarter of 2017, BCI had first step to providing more rapid and robust 147 media impressions, of which 94% were data and information across BCI. positive. This represents nearly a 100% increase in overall impressions from Q1 2017

2 Selected Country Highlights

China local languages. It will be launched in Q3 to An MoU with Cotton Industry Alliance support both our Implementing Partners and BCI’s Strategic Partner, IPUD, launched an (CCIA) was signed, which is an important farmers and will provide continuous support 18-month project on in cotton step in the embedding process of the Better and training to the farmers. production. The project is being developed in Cotton Standard System in China. partnership with the Fair Labour Association In June 2017, the BCI team in China (FLA), H&M and Inditex, with additional successfully reached 92% of their annual The Pakistan National Stakeholders Council brands expected to join and support the work. membership recruitment target, and Meeting took place on 3 May 2017. The This project builds upon preparation work surpassed their target for new Better Cotton meeting provided a platform for stakeholders and training conducted in 2016 with the FLA. Tracer (BCT) users. There are now 268 to discuss the challenges and opportunities Independent projects like this add value to BCI Members and 580 Better Cotton Tracer associated with forming the basis for a the Better Cotton Implementation, and form (BCT) users in China. In addition, C&A China longer term national plan for Better Cotton in part of our focus on continuous improvement. officially launched the BCI on-product mark. Pakistan. Representatives from both Punjab and Sindh Governments participated along United States An MoU with China Cotton Industry Alliance with central Government. (CCIA) was signed - an important step in Over 400 farms in 14 US states are the embedding process of the Better Cotton There were 16 new members and Better participating in BCI for 2017, thus tripling Standard System in China. Cotton Tracer users from Pakistan during US farm participation for the third the first 6 months of 2017. consecutive year. West Africa (Mali and Senegal) The team in India have been working on developing a new mobile ‘app’ that will give BCI’s Implementing Partner, Sarob, added The new growing season started with a joint Implementing Partners and farmers access a new area and group of farmers in the meeting to align and plan key activities for to the latest scientific research on cotton northern part of Sughd province, an important the cotton season with all partners in Mali production as well as seasonal and regional step towards further expansion of the and Senegal (FNPC, APROCA, CMDT, advice on practices. The app is developed programme in the coming seasons. SODEFITEX). together with the Central Institute for Cotton Research who will provide the content in

3 Conference and Meetings

BCI’s 1st Global Cotton Donors and Supporters Conference Meeting The first BCI 2017 Global Cotton Conference took place in Berlin, 17-18 May 2017. It was The first Donors and Supporters Meeting was attended by nearly 300 participants from held on 15 May 2017, in Berlin. The meeting 37 countries representing business, included current past and prospective donors government, international organisations, and supporters of BCI. Further details of non-governmental organisations, the outcomes are found in the following academics, farmers and other experts quick link. from the cotton sector. BCI was honoured to have Parliamentary Annual Members’ Meeting, State Secretary Thomas Silberhorn from 16 May 2017, Berlin the German Federal Ministry for Economic The Annual Member Meeting was held Cooperation and Development (BMZ) the day before the Conference. The provide a keynote speech on the opening Thomas Silberhorn meeting brought together BCI Members to day. He remarked: “You’re no longer niche. discuss updates on BCI progress and other Parliamentary State Secretary, BMZ You’re part of a movement that is gathering operational aspects of BCI, including the momentum.” See the Summary in Part BCI GIF and future directions with innovation. 2 of the report for further details of the Conference outcomes.

4 Upcoming BCI Events 2015-2016 Global Reach Figures of BCI

BCI Implementing Partner Meeting and Symposium BCI Annual Implementing Partner Meeting and Symposium will take place in Sri Lanka on December 5th and 6th 2017. The Annual Meeting will focus on the new Principles and Criteria, specifically the main innovations brought to the revised standard: pest management, water stewardship, climate change, biodiversity management planning, and land use change. In addition to the Implementing Partner meeting, there will be a Symposium on Integrated Pest Management. Better Cotton Countries BCI 2018 Global Cotton Conference Benchmarked countries and General Assembly, Brussels A BCI Donors and Supporters meeting will be held on 25 June 2018. The theme will 1,528,537 3,491,263 2,504,613 be the Sustainable Development Goals Better Cotton Area Under Better MT of Better Cotton and BCI. Farmers Cotton Cultivation (ha) Lint produced BCI is pleased to announce the dates of 27 to 28 June 2018 as the official dates for the Second Annual Global Cotton Conference 12% 23 countries on The Member Only General Assembly will  of global 5 take place on 26 June 2018. production continents

5 2017 Q2 Summary Report

Quarter 2 was dedicated to training partners Demand: Membership and Supply Chain who supported farmers as sowing began in the northern hemisphere, continuing Membership Update Progress Holding AG and HUGO BOSS AG. new member recruitment and culminated There are 4 pending (new) retailer and brand in BCI hosting its first Donors and At mid-year, 43% of the target for new members which will be added to the list once Supporters meeting and the first Global members was achieved: 103 members joined their membership dues are paid. Cotton Conference. BCI out of the total target number of 250 new members set for 2017. Recruitment is The number of new Better Cotton Tracer strong for Retailers & Brands and Suppliers & (BCT) system users for 2017 has reached Manufacturers, with some lag in Civil Society 358. The annual target is set at 650 new and Producer Organisations. Among the users. At the end of Q2, 55% of the 2017 retailers and brands that joined BCI in Q2 target has been achieved. is our first Brazilian retailer and brand Lojas In total, BCI is on target to meet its new Renner SA. Others who joined in the period member target relating to income from are the Benetton Group S.r.l., Work in membership fees and BCT user fees.

We are Growing!

1200 1000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 30-Jun-17

Retailers and Brands Producer Organisation Civil Society

Associate Members Suppliers & Manufacturers

6 Q2 BCI Membership Distribution Membership Distribution by Category Better Cotton Demand – 2017 Q2 The demand for Better Cotton at the spinner and retailer and brand levels remain strong 2017 – 30 June compared to 2016 over the same Quarter. The total retailer and brand declarations of Better Cotton over Q1 and Q2 is 289,000 Retailers and Brands 74 metric tons (MT). Declarations by spinners during the same time was 612,577 metric tonnes (MTs). Figures for BCI Retailer and Producer Organisation 32 Brand and Spinner Members are lower than the BCI forecasts. This is a regular pattern Civil Society 33 as seen in past years over the same time period and is a function of seasonal growth Associate Member 10 fluctuations. It is expected that BCI will reach its annual uptake targets.

Arica 2 Suppliers and 944 hina 24 Manufacturers ndia 2 aistan 11 est o Asia 13 Total Members 1093 urope 20 orth America 4 BCT Users 1149 Oceania 0.4 outh America 1

7 Source: BCI, 30 June 2017

8 Standards, Learning and Impact BCI Information Infrastructure

Progress on Revising the BCI Standard BCI, together with Helvetas and the Alliance Update on Information Systems The 2nd public consultation of the BCI for Water Stewardship will begin testing the Management standard closed on 29 January 2017 and new (revised) Principle 2 on water in India, A new in-house IT Project Manager started the Standard Revision Committee has Pakistan, Tajikistan and . The on 1st June and is leading BCI’s work to reviewed the full set of comments from pilot will start in July with the development integrate and link BCI’s diverse data and the consultation. The recommendations of a training module on the 5 components reporting platforms and to lead projects to the Standard were submitted to the BCI of the BCI water stewardship plan. automating data entry and facilitating Council for review and discussion. Due to The second pilot project will focus on data analysis. the extensive number of items to address developing and testing the new land use The development of the Online Project for the revision, the Council decided to adopt change approach. BCI is partnering with the Database (OPD) for collecting and analysing changes through a staged review process. High Conservation Value (HCV) Resource field-level data (e.g. Global Reach Indicators This review process began in Berlin at the Network to develop a risk assessment tool and Results Indicators) is progressing and Council Meeting which took place prior to that evaluates the likelihood of HCV presence will lead to partners entering data directly the Global Cotton Conference, in May 2017. in areas subject to crop conversion. The next into the system. This is part of BCI’s efforts Two additional review stages will take place steps are the development of procedures to reduce manual data management and in September and October. The approval for conducting the HCV assessment in low, to improve the quality of data collected as of the Revised Standard is expected to be medium and high-risk situations based on well as the efficiency of processes. These completed by the end of November at the results derived from the application of the risk are important steps that accompany BCI’s next BCI Council Meeting. assessment tool. expansion and future objectives. The Two test pilot projects were launched in June Information Infrastructure Strategy will 2017 associated with the approval of the continue in this direction through the rest revised parts of the Standard on water and of the year and BCI will continue taking land use change. steps to becoming a data manager.

9 BCI Percentage of World Cotton Production, by year

2016-17 & 2017-18 are ESTIMATES 20%

15%

12%

7% 6%

2%

*Note: this graph excludes CmiA countries 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

2016-17 & 2017-18 are ESTIMATES

11 Country updates

China

Membership Update Supply Programme Update In June 2017, our team in China successfully An MoU with China Cotton Industry Alliance reached 92% of their annual membership (CCIA) has been signed. The aim of the recruitment target, and surpassed their target MoU is to support national embedding of the for new Better Cotton Tracer (BCT) users. BCI standard in China through cooperation There are now 268 BCI Members and 580 with national organisations and expansion Better Cotton Tracer (BCT) users in China. of government engagement. CCIA will also C&A China officially launched the BCI on- work to connect BCI partners to training led product mark. Over 220,000 items, from by scientists. CCIA is a multi-stakeholder jeans to blouses, now communicate about organisation that is working to integrate C&A’s commitment to the Better Cotton cotton production, processing, trading, and Initiative. The on-product mark will be rolled textile manufacturing, and to facilitate the out further, a positive indicator for building development of more sustainable cotton increased awareness about our initiative. in China. Led by China Cotton Research Institute, with support from the Ministry of Agriculture, they are a strong partner to support BCI’s ambition to embed the standard at national level.

12 India

Building the Capacity of our Partners Representatives from the BCI India Events The 2017-18 cotton season is the most Supply Programme Team conducted The BCI Indian Country Team was invited ambitious to date for our India programme. visits to the Implementing Partners in to attend the annual general meeting of the The Implementing Partners are projecting North India to support their work. As part All India Coordinated Research Project on to reach more farmers than ever before, of this visit, a leading etymologist from Cotton (AICRP), part of the Indian Council and require ongoing support and guidance the regional Cotton Research Station for Agricultural Research (Government of from the BCI India team to deliver effective was invited to speak to the implementing India). The AICRP project aims to tackle programmes. A few examples of these partners about how to address the key problems encountered in driving sustainable support activities are: challenges and solutions facing their cotton production, such as productivity, seed region. North India produces The team is working on the development development, pests, diseases, salinity and approximately 13% of India’s cotton. of a new mobile phone training app. drought tolerance. The new app will be launched in Q3 to An MOU with the Junagadh Agricultural support both our partners and the farmers University in Gujarat was signed to they work with in delivering training on, support efforts to build the capacity of and understanding of, the Better Cotton our Implementing Partners by providing Standard System. This app will provide technical advice and expertise. information about recommended practices A new relationship with the Indian Centre in local languages, such as plant protection for Research on Innovation and Science techniques and water management Policy (CRISP) is forming to build practices, with advice tailored to each functional capacities of IP staff. state. It has enormous potential to benefit In other news, the relationship with our programme not only in India, but also the International Fund for Agricultural in other BCI countries. In partnership with Development (IFAD) is advancing. Through the Central Institute for Cotton Research this relationship, a Better Cotton project could in India, updates, current seasonal be introduced into a new cotton production information and other data on cotton state, if IFAD has an existing presence. production will be made available regularly Current work with IFAD in Maharashtra to the farmers. continues.

13 Pakistan An MOU with the Agriculture Extension For the 2nd Quarter, the Pakistan team have Department (AED) of Punjab and Sindh, kept busy with the early-season information which was signed in the first Quarter of 2017, collected from all projects to update was a key step towards national embedding projections made before planting. As per the in Pakistan. Based on the MOU signed, AED pre-season forecast, there is no major shift in will be involved in the implementation in one target numbers. district in Sindh and two districts in Punjab. Lena Staafgard, BCI’s Chief Operating Officer, visited Pakistan in May. During Implementing Partners (IP) Capacity her visit, she met with the BCI IPs working Building in Pakistan, along with key suppliers and This quarter, IP capacity building was manufacturers operating in Pakistan. It conducted with 127 participants from 6 IPs, provided a good opportunity for her to visit most were Producer Unit 2(PU) managers. cotton fields in one of the project areas and There were 2 IP refresher training courses meet the field implementation team, including and 2 qualification training sessions (for new small and medium farmers and cotton IP Staff) completed. workers -- both male and female -- in the The Pakistan National Stakeholders Council field, not only watching the planting, but Meeting took place on 3 May 2017. The also participating and getting her feet wet. meeting was attended by a broad spectrum of stakeholders, ranging from government representatives, BCI Implementing 2 A producer unit equates to 3000 small Partners, such as WWF and CABI, Industry holder farmers Associations, Academics, and farmers. The meeting provided a platform for stakeholders to discuss the challenges and opportunities associated with forming the basis for a longer term national plan for Better Cotton in Pakistan.

14 Other News Includes activities, key issues, practical solutions and future plans. The meeting is conducted Moving forward with the Pakistan Central in field area in one of the BCI project and Cotton Committee (PCCC) – operating hosted by one of the BCI IPs. under the Pakistan Ministry of Textile Industry cooperative relationship. A Activity on the Australian Department of proposal for the release of funding from the Foreign Affairs and Trade (DFAT) funding Government to PCCC for implementation started and 3 new projects began which are of Better Cotton Standard System is in directly linked with the DFAT funding which review and approval is expected in 3rd Q3 covers 50,000 farmers. of 2017. BCI is working to implement new criteria in PCCC has proposed to implement BCSS the upcoming revised standard on water in one project in Punjab and one in Sindh. stewardship together with several partners Base work on the project will be started late in Pakistan. This includes two separate in 2017 and actual implementation in the partnerships: a) collaborating with GIZ, crop season 2017-18. the German Textile Alliance and BCI IPs Continuing to work with public sector to implement water stewardship principles organizations and 3 MOUs signed (one in their projects and support watershed with the public-sector agriculture university stakeholder engagement managed by and two with Agriculture Extension GIZ and; b) together with the Swiss Department (AED) of Punjab & Sindh) in organisation Helvetas, the Alliance for 2016 and early 2017. Message related to Water Stewardship, WWF-Pakistan and BCI production principles, is part of the IKEA we are able to engage further projects AED message for cotton farmer for 2017 and also benefit from existing water- crop season. focussed programmes already in place within the WWF/IKEA partnership Increasing knowledge sharing through an IP platform is developing. A news bulletin Membership services and support are consisting of news, key activities and being provided to BCI members and field level good practices from all IPs, are potential new members in Pakistan and for shared with all Projects on monthly basis East Asia. 16 new members and BCT users with a quarterly meeting of representatives from Pakistan, have been inducted in first from all IPs. Representatives share current 6 months of 2017

15 Kazakhstan Checks were also conducted and a selection of third-party verifications were shadowed Now halfway through the second year by the BCI team for assurance purposes. of Better Cotton in Kazakhstan, 145 Refresher training courses were delivered new farmers, mainly smallholders, are for Producer unit (PU) managers and field participating in the Better Cotton programme facilitators. this season, tripling the number reached in 2016-17. The 2017-18 sowing period has Tajikistan now been completed. BCI’s Implementing Partner, Louis Dreyfus BCI’s Implementing Partner, Sarob, added Company (LDC), organised field visits with a new area and group of farmers in the farmers to provide training on the benefits northern part of Sughd province. This work of a new seed variety, and on new fertilisation was complemented by the recruitment and techniques. Farmers, agronomists and training of additional Field Facilitators to LDC staff also participated in a training provide implementation services in time programme on BCI principles, agronomic for this season’s sowing period. Sarob techniques and pest management, also provided training services to an conducted by Sarob Consumer Cooperative, Implementation Partner in Kazakhstan, along our Implementing Partner from Tajikistan. with another organisation that is intending Farmers in Kazakhstan have worked on to join the programme there. A BCI Brand developing their individual improvement Member visited Tajikistan and is working with plans for the 2017 season. a local textile company to pull Better Cotton into its supply chain. Southern Africa (Mozambique, South Africa and Madagascar) In the Southern Hemisphere, the season was coming to an end, with harvest activities starting, and the focus was on concluding the Assurance Programme. In the 2nd quarter in Southern Africa the teams have selected, trained and contracted auditors for verification visits. The 2nd Party Credibility

16 Turkey To respond to this rapid growth, BCI has trained and approved additional 3rd party With cotton seed planting and sowing taking verifiers, and added a new USA programme place during Q2, BCI’s Strategic Partner, officer position to help with assurance and IPUD, designed an 18-month project on child other related tasks. labour in cotton production. The project is being developed in partnership with the Fair Significant improvements were made in Labour Association (FLA), H&M and Inditex, the scheduling, timelines and supporting with additional brands expected to join and tools for group managers, which is making support the work. This project builds upon implementation of the group assurance preparation work and training conducted model much smoother. in 2016 with the FLA. Projects like this add Outreach to academia is underway; civil value to the Better Cotton Implementation, society and government outreach requires and form part of our focus on continuous more attention going forward. improvement. 4 new Group Managers (equivalent to IP) have been signed-up, which will translate United States into triple the farm/lint numbers from last Four new US organizations signed BCI season. implementation agreements in Q2, enabling them to form and manage groups of West Africa (Mali and Senegal) participating US farms, as part of the USA The new growing season started with a joint group assurance pilot. This brings the meeting to align and plan key activities for number of such groups to 8 in total, which the cotton season with all partners in Mali are managed by cotton merchants, marketing and Senegal (FNPC, APROCA, CMDT, cooperatives and ginners. SODEFITEX). Over 400 farms in 14 US states are participating in BCI, for 2017, tripling US farm participation for the third consecutive year.

17 Communications

Media Coverage Retailer and Brand Marketing The Communications Team is working on Communications corrective action plans with a handful of For the second quarter of 2017, BCI had brands to ensure that all BCI marketing 147 media impressions, of which, 94% were For the second quarter of 2017, BCI communications are consistent with the positive. This represents nearly a 100% approved 9 On-Product Marks for BCI BCI Claims Framework. increase in overall impressions from the Q1 Retailer and Brand Members’ use on end- 2017. This increase is due to the extensive product swing tags. BCI has approved 41 coverage that BCI received through off-product claims for BCI Retailer and our involvement in the Prince of Wales Brand Members, spanning websites, in- Sustainable Cotton Communique and the store signage, print materials, social media, Cotton 2040 Initiative and from the Global reports, and videos. Cotton Conference. During Q2, twenty-six (26) Member induction meetings were conducted for BCI Retailer and Brand Members. Alan McClay, CEO and Prince Charles, June 2017

18 Communications Task Force Country Harvest Reports A Communications Task Force Meeting took BCI continues to work closely with retailer The Communications Team is working place on 16 May 2017, in Berlin. Nine brand and brand members through one-to- with the Standards & Assurance and Supply members participated in the meeting. one meetings, webinars and conference Teams to coordinate the publication of The three topics discussed were: calls, in order to implement new important country-specific cotton Harvest Reports communications activities, create a through the year, as Harvest data is finalised. Measuring and reporting on the impact public relations plan and develop a crisis BCI will release the reports from the 2015/16 of sourcing, communication infrastructure. A new BCI season in Q3/Q4 as they are submitted Updates to the Claims Framework, and Fact Sheet was created and distributed to country by country. brands to support continuity in messaging. Recent media attention as well as crisis communications preparedness.

On product mark: C&A China, 2017 19 Meetings and Conferences

Donors and Supporters Meeting The first Donors and Supporters Meeting was There is a strong need for BCI to highlight Collaboration, clarity and information is held 15 May 2017, prior to the BCI Members results delivered in the field more widely, needed to distinguish how the different Meeting. Attendees were comprised of and on a more regular basis. For example, standards relate to each other and cotton current, past and prospective donors and the field stories help raise awareness production. BCI and its work with Strategic supporters of BCI, along with the BCI Country to consumers globally and to retail and Partners, helps the public to clearly Managers and thematic managers. brands and their customers. understand the relationship between standards and ensures the credibility The purpose of the First BCI Donors and Recognition of organisations supporting and integrity of the work is not impacted. Supporters Meeting was to: i) present the the BCI initiative is vital. This includes unique aspects of the Better Cotton Initiative, government funding, as it is imperative for The business model of BCI fosters ii) describe BCI progress to date in meeting them to report donations to taxpayers and change through the demand and uptake the 2020 targets, iii) listen to the priorities explain how their funding has been used to for Better Cotton. The demand and and commitments of participants towards meet their development priorities uptake by retailers and brands for Better the sustainable transformation of the cotton Cotton provides farmers with a more Shared values are an important concept sector by participants, and iv) provide a stable market. platform for attendees to express views on and trend in sustainable development. The the ways forward to deliver better cotton and objective is to bring government and profit BCI provides a unique traceability solution transforming the sector. making private sector businesses together through physical segregation to the ginner to bring about positive social impact. BCI’s and mass balance over the supply chain. Some of the key points raised by meeting work with the cotton sector represents a participants include, inter alia, good example of shared values by the The trend of precompetitive private public retailer and brand members. partnerships such as BCI is growing and governments highly support them as a powerful tool for change and in meeting sustainability agendas.

20 BCI 2017 Global Cotton Conference The first BCI 2017 Global Cotton Conference Following Mr. McClay was the opening was held from 17-18 May 2017. It was keynote speaker Alan AtKisson, Founder attended by nearly 300 participants from & CEO, AtKisson Group. Mr. AtKinsson 37 countries from businesses, international provided a valuable and memorable organisations, governments, non- presentation on Sustainability Transformation governmental organisations, academics, is Happening. He pointed out how the work farmers and other experts from the of BCI clearly plays a valuable role in helping cotton sector. the public and private sector meet the UN This inaugural conference provided an ideal Sustainable Development Goals. Although platform for dialogue, to create connections Alan McClay, CEO, BCI incremental change is not sufficient to make and work together towards mainstreaming a transformation or to meet the targets set sustainable cotton. The diversity of Alan McClay, CEO of BCI, opened the out under the 17 SDGs. Growth and change participants underlined the enormous conference by describing BCI’s substantial needs to be exponential. He presented potential for change that the industry can achievements made in 2016. He said, “We evidence and critical lessons learned about affect by joining forces. are making a call to action to consumer- how to be an effective agent of change and how to effectively work together to accelerate BCI has grown rapidly since the first facing and supply chain businesses to join the transformation of the cotton sector. Better Cotton harvest 7 years ago. In the together in supporting more sustainable 2015/2016 season over 12 % of cotton cotton sourcing, and we are enthusiastically globally is produced according to the Better looking forward to working with other cotton Alan AtKinsson Cotton Standard System or its equivalent. standards and programmes to accelerate the As the industry makes progress towards transformation of the cotton sector.” mainstreaming, BCI is adapting our He noted that there is enough supply, business model and its resilience so that the and complementarity between different system can continue to meet the needs of sources of more sustainable cotton to meet farmers around the world, in vastly different the demands of complex global supply geographies, climates, economic and political chains. Working together collectively is a contexts, at a scale of millions. foundational principle for transforming the cotton sector to be more sustainable.

21 Joost Oorthuizen, Executive Director, IDH of Sustainability Schemes”, to “Making The Sustainable Trade Initiative, presented Sustainability Work for All: Experience a number of successful partnerships of from women’s empowerment programmes”. the IDH. The session gave an overview In the Supply Chain breakout sessions, of the BCI Growth and Innovation Fund, conversations ranged from “Understanding and pointed the next step to sustainability. Pricing Mechanisms in the Supply Chain”, To reach out 2020 goals and beyond, to “Chain of Custody Impacts on Production additional institutional funding is needed & Logistics” and more. Finally, the Consumer to help BCI scale up towards the training Facing breakout sessions included of 5 million farmers. “Competing for the Consumer: T-Shirts Plenary panels focused on increasing or iPhones?”, the interesting “Consumer knowledge of the portfolio of more Choice: Benefit or Burden”. sustainable cotton available to commercial The closing keynote speaker was Jason businesses; highlighting how BCI is joining Clay, Senior Vice President, Food & Markets forces with others, such as Australia and at WWF, and one of the original influencers Aid by Trade Foundation to ensure supply of the BCI business model idea. Jason over 23 geographies. This overview was Clay presented the dilemma faced by food completed with a poignant view of changes and commodity markets. He explained that taking place at field level as experienced by the speed of change is not fast enough to farmers and field level actors. stop the downward spiral of market stability The Farmer panel is one of the revered panel and agricultural land protection. One of discussions of the participants. The panel is the key issues he discussed is affecting comprised of farmers who work daily in the global commodity markets is fraud and cotton field. (see photo) illegal activity. From 5 to 44% of target globally traded commodities are produced The Conference breakout sessions put the illegally. This illegal activity can be financially spotlight on three segments of the cotton damaging but also physically damaging value chain: field level, supply chain and from illegal use of hazardous chemicals at consumer-facing aspects. Field Level elevated levels that are harmful to humans breakout sessions included topics ranging and animals, illegal inputs to the process of from “Mitigation and Adaptation to Climate food and agriculture production, dangerous Change in Cotton Production: The Role additives and more. Farmer Panel representing , Tajikistan, Mozambique and China Farmers, Source BCI 2017

22 For cotton, BCI is an umbrella system helping Annual Members’ Meeting, to reduce risks to the cotton producer and 16 May, Berlin through the supply chain. He mentioned it’s The BCI 2017 Annual Members’ Meeting better together and the shift from competition was a global gathering of members. This to joining hands as evidenced through the year it took place one day prior to the first BCI conference. He said it will be important public BCI 2017 Global Cotton Conference. in the near future for the Better Cotton or The aim of this meeting was to provide all similar standards to develop a price finding current BCI members with, inter alia, relevant mechanism for cotton, that there is not a organisational updates on overall strategy, price premium, the market must see Better Better Cotton supply, membership benefits, Cotton and other equivalent standard grown and governance. cotton as an asset, BCI needs to help the sector by promoting and leveraging long- BCI staff presented functional updates on term investments, e.g. machinery, climate the work of the Secretariat. Key messages adaptation, there is a need to set up an included updates on Better Cotton supply by insurance framework for side sellers and country, updates for funding of the Growth a need to develop a global language and Innovation Fund, progress updates on for traders who trade Better Cotton and the new membership value proposition, the equivalent standards. new BCI member claims framework, progress report on the BCI Standard Review, and the launch of the new BCI Annual Report. Download the Annual Member Meeting presentations here.

photo placeholder Alan AtKinsson]

To access the conference presentations and additional content, click here.

23 Story from the Field

A Day in the Life of an Agricultural Advisor In Tajikistan, farmers face challenges cotton in transport and storing it in a dry spot. including water scarcity and extreme weather. I also monitor whether farmers are providing In 2015-16, flood waters washed away seasonal cotton pickers with drinking water, newly planted seeds in the northern Sughd and whether there are children or pregnant region, and unseasonably high summer women in the field.” temperatures damaged cotton crops across Chamangul visits two to three farmers a day, the country. Farmers also struggle to ensure advising farmers and workers on how best contracts, and safe working conditions for to address the issues they’re experiencing seasonal cotton pickers. and implement best practices. Her ‘toolkit’ Chamangul Abdusalomova has been an of ideas and demonstrations varies during agricultural advisor with Sarob, our IP in the season. For example, at the beginning Tajikistan, since 2013, supporting field of the cotton season, she helps farmers facilitators in delivering training and advice to gauge the best moment to sow seeds by farmers. An agronomist by training, she holds measuring soil temperature and giving advice field days to showcase new technologies and on optimum weather for sowing. Both farmers runs practical demonstrations to help farmers and seasonal cotton pickers are keen to learn implement each BCSS production principle. from her, she explains. She also provides important advice on decent “When workers have a moment to relax, work. Her day begins early, often at dawn in they often ask me questions about cotton the harvest season. growing – everything from the benefits of “Agriculture does not have working hours,” higher quality seeds or reducing soil acidity to she says. “In September, harvest season, identifying the insects they see in the fields,” I go to the field at 6am and check how she says. “Often, I run question and answer farmers are getting on with harvesting, and sessions to address common challenges, and how well they’re following the BCSS criteria. I share all the information with my team, so For example, it’s important that they don’t that other Learning Groups can benefit too.” use plastic bags to store cotton, as this encourages moisture. After the harvest, I help them to minimise losses by protecting the

30 Asked whether she has observed positive children are tending to help their parents only changes on the ground, Chamangul says she outside of school time, with simple activities has seen evidence of farmers adopting both such as looking after the wild flowers more progressive environmental and social bordering the field. practices, with positive results. “Beneficial “I hope that more farmers will join BCI in insects, and using non-chemical alternatives Tajikistan because they will really see the to synthetic pesticides, helped BCI Farmers benefits, particularly as demand for Better (compared to non-BCI Farmers) reduce Cotton grows,” she concludes. their use of synthetic pesticides by 23% in 2015-16.” “In the rural villages where I work, farmers are increasingly learning to dispose of pesticide bottles responsibly, rather than throwing them in the river,” she says. “This is helping to preserve the quality of local water supplies. Similarly, farmers are no longer grazing animals near areas due for pesticide spraying. I’m also seeing farmers introduce ‘beneficial insects’ and cultivate wild flowers and plants that ‘trap’ pest insects, which is helping to reduce their reliance on chemicals. By adopting simple, cost effective pest management techniques, they’re also saving money and putting less strain on the environment.” From a social perspective, Chamangul explains that farmers are increasingly stepping up to their responsibility to provide clean drinking water for workers, particularly during the harvest season. Additionally,

31 Results, Impact and Learning Programme Special Focus on Progress

Better Cotton farmers are on a journey are migrated, longitudinal results analysis – envision the evolution of our measurement toward more sustainable cotton production, looking at trends over time – will be greatly and reporting of the impact of sourcing and BCI exists to provide them an actionable facilitated. This development will enable Better Cotton. We also discussed the topic framework to do so. We expect that improved faster turnaround for Producers to see their at the Communications Task Force meeting practices adopted today will lead to positive results against their peers and their own in May in Berlin. results and impacts tomorrow for farmers, trend lines across seasons. Formalising BCI’s Theory of Change (ToC). workers, and communities , as well as for the With the aim to develop new tools for A ToC is a logical diagramme that defines sector as a whole. retailers and brands to communicate an organisation’s vision and explains the As a data-driven organisation, BCI is about impact allocated to their sourcing steps believed to bring about that vision. committed to collecting and reporting on achievements (a 2017 organisational Through causal pathways, it connects farm-level results from the start. And as priority), BCI conducted research into new activities with results and impacts, engagement in producing more sustainable potential indicators and results reporting including assumptions and contextual cotton continues to expand, our systems and methodologies. The objective is to offer influences. The ToC aims to answer the approaches are evolving and innovating to value to the market while ensuring the questions: what is the change we are meet tomorrow’s opportunities. Following credibility and feasibility of the Better working for and what needs to happen for are highlights from the second quarter Cotton Standard System. change to come about? to demonstrate BCI’s results and impact BCI will continue to measure what matters BCI has an ambitious vision while activities:  - farm level sustainability improvements. In operating in a complex environment. Continued development of its centralised the second quarter, we explored integrating Developing a formal ToC is therefore data management system (BCI Project scientific modelling to move beyond an important exercise to identify the Database) that will be integrated with the primary indicators (i.e. from “N-fertiliser key investments of human and financial other systems across the organisation, use” to CO2 eq. emissions). The BCI team resources it will take to bring about our including BCI’s data visualisation tool, researched tools that aggregate life cycle desired change in the cotton production Tableau. During the second quarter, inventories and others that add a layer of sector. The ToC, expected to be made we launched the establishment of the monetisation to enable an understanding public before the end of the year, will be a data storage component with expected of return on investment. We shared an living document and be regularly revisited completion in the third quarter (last year, issue brief with a group of retailer and and tested. BCI’s partners reported more than 14 brand members that explains the unique million data points; this requires state of position of BCI’s global approach to making the art systems). Once historic results data cotton more sustainable and how we

32 The chart indicates the volume of production The chart indicates the proportion, by region, per country or benchmarked programme like of licensed Better Cotton farmers. ABRAPA from Brazil.

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