Become a Vogue Business Member to receive unlimited access to Member-only reporting and insights, our Beauty and TikTok Trend Trackers, Member-only newsletters and exclusive event invitations.
Data is the foundation of supply chain transparency and compliance. The problem is there’s a lack of standardisation around how data is collected, so the process becomes a burden for suppliers.
Traceability platform TrusTrace’s latest playbook, ‘The Data Advantage: A Practical Guide to Building De-risked, Compliant and Future-Ready Supply Chains’, which launches during the Global Fashion Summit in Copenhagen, sets out a trademarked framework to streamline the process. “We picked this data and compliance topic because it’s what our customers are asking us for,” says TrusTrace SVP of marketing Anja Sadock.
The playbook includes case studies from Adidas, Hugo Boss and Primark. “With the onslaught of compliance regulation, it’s becoming imperative for everyone. The data burden is becoming unmanageable — and if we can’t have high-quality data, nothing else matters because we’ll be making analysis on the wrong assumptions,” Sadock says.
TrusTrace highlights that compliance is becoming a baseline, and for brands to stay competitive they must collaborate with suppliers (rather than just auditing them) and prepare for data requests that will soon be demanded by default.
The traceability landscape is currently undergoing a messy consolidation stage. In February, the European Commission published the Omnibus Simplification Package proposal, which had implications for the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Under the changes, 80 per cent fewer companies would be required to undertake sustainability reporting and mandatory due diligence would be almost entirely restricted to Tier 1 of the supply chain. Response was divided: while simplification is necessary to cut back on the time-consuming admin associated with regulation (and ostensibly improve uptake), some argued that the changes diluted the ambitions of the regulations.
“The Omnibus Package certainly signals change, but the details of what ‘simplification’ actually means are still unfolding,” says Pauline God, TrusTrace’s policy and partnership manager, who led the development of the framework. God points out that many other regulations that are not impacted by the Omnibus still require granular data, so brands will likely need that detail regardless. “In this sense, it may be more of a repackaging than a reduction. Simplification is always welcome, but for brands and suppliers, true progress will come from harmonisation and standardisation.” TrusTrace hopes that by surfacing these gaps, its playbook will offer policymakers practical insight into where they could harmonise to reduce complexity without lowering ambition.
TrusTrace acknowledges in its new playbook that challenges around data collection are felt on both sides. Suppliers report being overwhelmed by brand-specific data requests, many of which ask for the same information in slightly different formats. Often, they are required to fill out extensive spreadsheets, submit documentation manually and answer surveys that lack coordination. In addition, they’re often given short timelines to provide data, and documentation and certifications — which are increasingly required by brands — can be costly. There’s a power imbalance, with suppliers expected to absorb the cost of compliance demands without brands sharing the responsibility.
“Most suppliers are not even answering all the questions [brands ask], either because they don’t have the data or they don’t have the capacity,” says Sadock. Many of the suppliers TrusTrace spoke to have three employees working on data collection full time. “It’s one thing to collect the data, but the distribution is also tricky because that’s also not standardised.”
TrusTrace says brands are generally sympathetic to these challenges, but face pressures of their own. Many brands lack a unified system to track and evaluate their compliance statuses, and, despite public commitments, many lack verified data beyond Tier 1. Requirements across prominent regulations like the EU Deforestation Regulation, the Uyghur Forced Labour Prevention Act, Digital Product Passport (DPP) legislation and the Corporate Sustainability Due Diligence Directive lack standardisation, which is why brands’ requests to suppliers follow a similar fragmented structure. “There might be a future opportunity to align and consolidate this fragmentation to reach broader industry solutions, in order to reduce the reporting burden for the suppliers,” Adidas SVP of sustainability and ESG Sigrid Buehrle says in the playbook.
“One of the pain points from brands is that everybody interprets [the regulations] slightly differently,” says Sadock. “Most of the brands we work with don’t only want to be compliant, but they also have impact ambitions and they’ve set science-based targets that they’re tracking towards, so they need additional data that is standardised. All of that contributes to the complexity.”
TrusTrace has introduced its trademarked Compliance Canvas framework, which took four years to develop and maps all the data brands need to collect to meet 16 major regulations across eight groups: due diligence, ESG reporting, packaging, claims and footprint, chemicals and product safety, forced labour, deforestation, and DPPs. The framework distills the requirements, analysing the repetitions and commonalities to consolidate them into a necessary data set, allowing brands to meet the most demanding regulations. The ambition is to future-proof the data-collection approach, encouraging a shift from reactive to proactive data collection. TrusTrace hopes this will have a positive knock-on effect for suppliers, too.
“We take the regulation that’s most demanding, the most granular, and we build a solution to cater to those needs,” says God. “The idea is that the suppliers will be happy that we list the data points that are really needed for compliance reasons. It should simplify things so that we don’t ask too much of suppliers. The framework has to be dynamic and evolve as regulations emerge and are amended, so we will constantly revisit it and monitor things.”
The playbook calls for industry-wide alignment, advocating for pre-competitive collaboration, not just for the sake of compliance, but to ease the burden on suppliers and to improve the quality of the data that is processed.
TrusTrace hopes the playbook is instructive for policymakers. “I hope [the framework] will showcase how unharmonious the policy landscape is. I hope policymakers will understand they need to collaborate to standardise things,” says God. It can be done, Sadock insists. “You can take inspiration from the banking system: it used to be local but now it’s a global system where everyone operates in the same way. It’s completely possible.”
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
