Fashion brands are launching sustainable clothing lines and exploring recycling, resale and other circular approaches, while customers, trade unions and labour-rights groups expect stronger evidence of responsible production. Yet complex, fragmented supply chains can make it difficult to verify a product’s origin, environmental impact and working conditions. Blockchain can record and share product and transaction data across a distributed network, giving supply-chain partners a shared record. In sustainable fashion, its key uses include verifying material origins, tracking life-cycle impacts and emissions, supporting circular fashion, and documenting workers’ wellbeing.
What Is Blockchain Technology?
Blockchain, as its name implies, is a shared digital ledger that includes a list of connected blocks stored on a distributed network. The blocks, containing metadata, are linked via cryptography to form a chain. The data record is timestamped and cannot be altered. Though the tamper-proof concept of blockchain was introduced by Stuart Haber and W. Scott Stornetta in 1991, it took almost two decades before the first-ever application of blockchain, Bitcoin, was launched in January 2009. This peer-to-peer cryptocurrency demonstrates several unique characteristics of blockchain technology, including decentralization, immutability, consensus and provenance.
How Does Blockchain Work?
The decentralized network enables every party in the network to have an exact copy of the distributed ledger, which records and captures near-real-time transactions from the beginning without a third-party intermediary. The transaction data in a blockchain are secured by cryptographic methods such as a hashing algorithm, which turns data into a string of unique characters that is difficult to reverse or decrypt. Therefore, any transaction data written into a block are immutable, which means no one can change or tamper with the data. The transaction data should be verified and agreed upon by all parties in the network through a consensus mechanism before a new block is added to the blockchain. The distributed ledger is updated accordingly.
If a party’s ledger is altered or tampered with, it will be rejected by the majority of parties in the network. The provenance feature allows authorized parties in the network to trace the origin of digital assets and the entire history of related transactions, thereby increasing transparency. These essential features make blockchain a strong cybersecurity technology to minimize fraud and enhance accurate tracking and end-to-end transparency. Because of these benefits, blockchain has been widely applied in various industrial sectors beyond cryptocurrency, such as trade finance, food, healthcare and supply chain management.
Is Blockchain Sustainable? Energy Use and Greener Options
Although the characteristics of blockchain enable digital transformation in various industries, the technology itself has been criticized by researchers as environmentally unsustainable. Bitcoin is one of the most renowned examples of peer-to-peer cryptocurrency. It is issued to reward “miners” when they successfully solve the cryptographic puzzle and add a new block to the chain. This proof-of-work (PoW) mining process produces huge energy waste because, in order to compete with other miners, miners need powerful mining hardware and cooling systems, which may result in higher electricity consumption and a larger carbon footprint. As of November 2021, the estimated annual electricity consumption of Bitcoin was 190 TWh, equal to the annual energy consumption of Thailand, with a population of 69 million.
To address the huge energy consumption problem, proof-of-stake (PoS), an energy-efficient alternative, has been proposed for adoption in the Ethereum blockchain. This mechanism allows the miner who has more assets to have a higher probability of validating a new block and receiving network fees as a reward. Hence, the miner will purchase more coins to become a bigger stakeholder instead of investing in computing power. Theoretically, this reduces energy consumption.
Directed acyclic graph (DAG)-based protocols were introduced as an energy-efficient and greener option than the traditional blockchain data structure. A DAG is a topological ordering structure in which blocks are not arranged sequentially one by one but can be arranged as multiple parallel chains in one direction, from earlier to later. That means several transactions can be confirmed at the same time to increase transaction speed, allowing transactions to be processed and confirmed efficiently.
IOTA is software that adopts the DAG protocol and is widely known for its low energy consumption of 0.00016 kilowatt-hours (kWh) for each transaction. This is significantly lower than the average energy consumption per transaction of Mastercard (0.0007 kWh) and Bitcoin, which exceeded 1,700 kWh by the end of 2018. IOTA has collaborated with various companies, including ALYX, EVERYTHING and Avery Dennison, to achieve sustainable development goals. The team developed an end-to-end provenance solution to trace the journey of an ALYX garment from raw materials to the display rack. Sustainability credentials are provided to consumers, while brands can have full visibility of their products throughout the supply chain.
4 Uses of Blockchain in Sustainable Fashion
Four major aspects of blockchain technology in sustainable fashion are discussed here. The decentralized, immutable, consensus-based and provenance characteristics of blockchain technology support proof of sustainable origin, life-cycle analysis and emissions trading, circular fashion, and workers’ wellbeing and social welfare. The technology provides evidence, enhances transparency for sustainability compliance, and helps avoid greenwashing.
1. Sustainable Fashion Supply Chain Traceability
From luxury fashion to mass-market segments, various fashion brands have shifted away from synthetic materials and begun to launch sustainable clothing lines made of organic and ethical materials to embrace sustainability and meet market needs. However, some brands have been accused of lacking evidence, transparency and verification of product origin. To bridge the trust gap with customers, fashion companies, including material suppliers and fashion brands, use blockchain technology to verify the origin of their products. Since the first blockchain proof-of-concept in the fashion industry in 2017 at the Copenhagen Fashion Summit’s Solution Lab, the fashion industry has collaborated with blockchain technology companies to track and trace the origin of sustainable materials.
Tokenization is a commonly used approach in the fashion industry to trace the origin of materials. Lenzing Group, a world-leading supplier of viscose fiber, collaborated with blockchain technology company Textile Genesis to conduct various rollouts to trace the entire product journey from fiber to the finished product through tokenization. Lenzing leveraged FiberCoins, blockchain-based digital tokens that serve as fingerprints to represent the quantity of physical fiber shipment from the fiber supplier. Each kilogram of fiber is represented in the platform as one FiberCoin. Only the fiber supplier, Lenzing, can issue FiberCoins and transfer coins in the platform to its downstream partners, such as spinners, fabric mills, dyeing houses, garment manufacturers and retailers, to trace and track the entire textile supply chain.
The first rollout was conducted in 2019, when Lenzing collaborated with WWF, Textile Genesis and Chicks to trace approximately 25,000 Chicks’ products made of TENCEL™ fiber from fiber to retail. After the success of the first rollout, Lenzing and Textile Genesis started another 12-month pilot programme in November 2020 with H&M, Armed Angels, Mara Hoffman and Chicks to trace TENCEL™ and LENZING™ ECOVERO™ fibers. It was estimated that most of the supply-chain partners would onboard in Q2 of 2021. The platform enables brands and retailers to have full supply-chain visibility of Lenzing’s fiber and access the digitally signed fabric certificates. Other firms, such as Fashion for Good, Kering, Zalando, CanopyStyle and U.S. Cotton Trust Protocol, have partnered with Textile Genesis to trace sustainable viscose and cotton for industry-wide implementation.
Scholars have proposed similar tokenization approaches in blockchain-based traceability systems. One approach issues a non-fungible digital token, which is a unique computer code representing a batch of goods. The token can be transferred, split, merged or passed to other partners within the supply-chain system. Another proposal is a private blockchain-based traceability framework with smart contracts and transaction rules for five main users, including organic cotton producers or suppliers, yarn manufacturers, fabric manufacturers, apparel manufacturers and retailers. Only the organic cotton producer is allowed to add organic cotton mass to the blockchain, representing the quantity produced, while other users are only allowed to transfer the mass to downstream supply-chain partners. A smart contract is a computer programme that runs on a blockchain network to execute the contract or agreement automatically when predetermined conditions are met.
To further enhance the traceability of blockchain systems, internet of things (IoT) devices with embedded sensors, such as RFID tags, QR codes and NFC chips, have been implemented to collect and transfer data over networks. COS, a subsidiary brand of H&M, attached a label with a QR code to garments in its recycled-wool collection, allowing consumers to scan the code and access product information, including location mapping, content and timestamps regarding the origin of the recycled wool.
Other fashion brands such as Arket and Martine Jarlgaard have used NFC technologies in their collections. NFC chips are attached to the labels of selected fashion collections. Consumers can scan the NFC label on a physical garment to track and trace the life cycle of the product. Some scholars have also proposed an electronic product code (EPC) on an RFID tag to provide a globally unique object ID for every product and track the process of each product. These technologies enhance transparency and traceability of the product origin and provide visible evidence to support sustainability claims.
2. Life-Cycle Assessment and Carbon Emissions Tracking
Besides transparency of material origin, the environmental impact of a product throughout its life cycle, from upstream to downstream in the fashion supply chain, is another major concern for sustainable fashion. Scholars have proposed a blockchain-enabled life-cycle assessment (LCA) framework to obtain reliable footprint and emissions data from the complex and fragmented supply chain. One LCA system architecture for various industries enables a wide range of stakeholders, such as governments and enterprises, to share data on input substances, waste, energy consumption and output emissions. Enterprises could use the analyzed data to redesign products with smaller footprints. The use of blockchain technology for LCA in material industries, including forest products, natural textiles and animal fibers, can provide accurate production data in real time from all suppliers, rather than estimated amounts in the current LCA protocol.
Covalent, the luxury brand renowned for bags and accessories made of the carbon-negative bioplastic material “AirCarbon,” collaborated with IBM and LinuxONE to track and disclose its carbon impact throughout the production process by using blockchain technology to address consumer scepticism. Consumers access the Covalent blockchain webpage and enter the unique 12-digit code printed on the purchased item. The code, known as the Carbon Date, indicates the time the product was created by AirCarbon. Consumers can trace the creation process through a timestamp and see the exact carbon footprints of the purchased product in a life-cycle analysis report verified by a third-party carbon-accounting firm based on the ISO 14044:2006 life-cycle assessment standard.
In addition to carbon tracking, blockchain technology can also serve as an emissions-trading tool, allowing firms to trade carbon credits. Usually, one credit permits the emission of one tonne of carbon dioxide; therefore, firms that cut their carbon emissions can sell or trade their unused credits to others. This approach provides an economic incentive for firms to reduce emissions. However, the traditional process of calculating trading credits and emissions records can be time-consuming. With a blockchain ledger, emissions data at different stages of production can be traced and recorded efficiently.
A blockchain-based carbon footprint tracking system with an emissions-trading feature for the textile and apparel supply chain was jointly developed by Hong Kong Applied Science and Technology Research Institute and WWF Hong Kong. A carbon token, a unique code representing a carbon credit, was issued by the authorized body and distributed to firms. The distribution, spending and trading of carbon tokens in the production stages, including raw material, yarn and fabric manufacturing, garment sewing and finishing, and packaging processes, are recorded in the shared blockchain ledger. This accounting tool enables automatic carbon-footprint calculation and serves as a tradable asset.
Researchers have also proposed a carbon credit-trading blockchain architecture that extends trading to individual customers. Customers can gain carbon credits if they distribute their old garments to fashion retailers for recycling. The proposed blockchain provides an economic incentive for the industry to reduce its carbon footprint for environmental sustainability.
3. Circular Fashion: Recycling, Resale and Repair
Besides emissions trading, the implementation of circular-economy strategies can reduce carbon footprint and waste. Circular-economy strategies in the fashion industry usually involve recycling, reuse and refurbishment. To embrace circularity and sustainability, fashion brands, from luxury to mass-market segments, have implemented related strategies, such as recycling and donating old clothes, reselling or swapping second-hand products, and clothing rental. However, common obstacles have been found, including a lack of traceability of product-origin information, such as quality assurance of material and production information, and a lack of standard policy, which might hinder the recycling and reselling process. To overcome these barriers, fashion brands use blockchain technology to trace product origin for authenticity verification of pre-loved items.
The luxury fashion group LVMH introduced blockchain technology in pilot studies with blockchain technology company ConsenSys and Microsoft, forming the luxury goods tracking platform “AURA” in May 2019. It was an Ethereum consortium model with luxury-brand members such as Louis Vuitton and Christian Dior. It aimed to track the product life cycle of luxury goods, from sourcing to sales, rental services and peer-to-peer second-hand marketplaces across the entire luxury industry.
Another luxury fashion blockchain example is the Arianee protocol, a public, open-source blockchain protocol that allows anyone to join, contribute and input information into the platform. Product owners and brands can register a product on the platform by creating a non-fungible token (NFT) with a unique Arianee ID. This ID is a digital passport for a physical luxury object, with information on proof of ownership, garment origin, transfer capabilities, repair history and requests, and authentication. Using an NFT as a digital certificate streamlines the process of fashion circularity.
MCQ, a lower-priced diffusion line of the luxury brand Alexander McQueen, collaborated with Everledger and Temera to develop “MyMCQ.” Scanning the NFC label attached to a physical garment has two purposes: (1) it allows consumers to track and trace the entire life cycle of each MCQ item for authenticity verification; and (2) it allows consumers to add transaction information to the blockchain to resell pre-owned products in a peer-to-peer second-hand marketplace.
Besides luxury fashion brands, mass-market fashion brands also use blockchain to implement circularity solutions and embrace sustainability. H&M, PVH Corp. and Target partnered with EON, Microsoft and Waste Management to establish the CircularID initiative in 2019 to provide digital identification of physical apparel products. The protocol has two primary goals: (1) to identify products for rental and resale and (2) to identify the material components for product repair, such as identifying the lost button on a jacket so the exact replacement can be ordered and used to repair it, to lengthen product life and enhance material recycling.
In addition to finished-product circularity, circularity in materials, such as reselling or reusing deadstock fabric, is a feasible attempt to achieve circular sustainability. Queen of Raw, a blockchain- and machine-learning-based marketplace for deadstock material, introduced MateriaMX to identify, track and trace deadstock fabric within supply chains in real time and automatically send it to the Queen of Raw marketplace for resale. A data report, including emissions and environmental impact, is provided.
Researchers have integrated product and material circularity into comprehensive blockchain frameworks for the circular fashion industry. A blockchain-based circular supply-chain management system for the fast-fashion sector covers various stages of the fashion product life cycle, from product design to after-sales service, sustainability assessment and material reuse. Its agile product design layer ensures products keep up with fashion trends and enables efficient data sharing, such as design changes after receiving comments from clients, throughout the whole product life cycle.
Beyond the fast-fashion sector, blockchain has also been proposed for circular business models across the fashion industry. First, a blockchain-based supply-chain model tracks the product life cycle and provides sustainability metrics of products to customers. Second, a service-based model aims (1) to offer clothing rental services, pre-loved product sales and repair and (2) to use blockchain technology to increase sorting automation and recycling efficiency. Product life-cycle information, such as material composition, dyes and finishing processes, stored in the blockchain can speed up the sorting process.
In addition to these aspects, one blockchain framework includes long-term policy and management because of increasing compliance, traceability and data-security pressure from policymakers. One example is the Circular Economy Package (CEP) in Europe, which includes measures and legislative proposals on waste. Enterprises are required to follow its action plan, which requires the reuse and recycling of municipal waste, including textile waste, to reach at least 60%. The CEP indicated the use of blockchain technology for closed-loop supply-chain management, enabling textile reuse and remanufacturing to address regulatory requirements and governance for fashion circularity.
4. Worker Wellbeing and Social Sustainability
From a social perspective, poor working conditions and unfair treatment of workers are long-term issues in the labour-intensive garment industry, including long working hours, child labour, wage exploitation and labour abuse. Since the Rana Plaza tragedy in 2013, fashion brands have begun to improve employees’ welfare and drive social sustainability in their vendor factories in response to the surging demands from customers, trade unions, labour-rights NGOs and Corporate Social Responsibility (CSR) compliance requirements.
From 2019 to 2020, Levi Strauss & Co., a fashion brand widely known for denim jeans, partnered with Harvard’s T.H. Chan School of Public Health, the New America Foundation and ConsenSys to develop an open-source blockchain platform, “Survey Assure,” that empowers approximately 5,000 workers in Mexican factories to express their daily experience and wellbeing in the workplace under the Sustainability and Health Initiative for NetPositive Enterprise (SHINE) programme.
Before the implementation of blockchain, the programme encountered three pain points: (1) insecurity and the risk of survey data manipulation, (2) a lack of transparency in survey results, and (3) the lengthy time, three months, to collect results, which made effective and immediate responses difficult. Following the implementation of “Survey Assure,” workers were invited to fill in the survey in Qualtrics anonymously with a corresponding survey ID. The Ethereum-based blockchain platform consolidated survey responses from Qualtrics in near real time, with automatically formatted data presented without manipulation or tampering in read-only charts. These charts were accessible to both management teams and factory workers on mobile devices and screens.
Besides tracking workers’ wellbeing, mathematical modelling has shown that the implementation of blockchain, government sponsorship and an environmental tax-waiver scheme can enhance social welfare and alleviate the decline in fashion supply-chain profits caused by poor data-quality issues in emerging markets.
Conclusion
Blockchain can strengthen evidence for sustainable material origins, bring life-cycle impacts and emissions into view, support reuse, resale, repair and recycling, and help workers report their workplace experiences. These uses draw on decentralization, immutability, consensus and provenance, but the energy demands of proof-of-work remain a concern. Proof-of-stake and DAG-based protocols offer lower-energy approaches within the examples discussed here. As fashion supply chains continue to explore these applications, their ability to provide transparent, verifiable information will remain central to sustainable fashion.
