By Barbara Dunin, co-lead, RAIN Alliance Sustainability Workgroup and ESG and marketing director of Beontag
It’s amazing how small things can make a big difference.
Most people now know that the path to a more sustainable world must go through our global supply chains, and that these supply chains are massive and complex entities. But one small part, an RFID tag, can have a beneficial effect far out of proportion to its small size and cost.
RFID tags are ultra-high frequency (UHF) smart labels that, when scanned, allow digital systems to see a part or a product. They make inventory management more accurate and efficient, enabling all kinds of supply chain track and trace applications. They can also enable IoT applications. As we like to say, they simply connect products and people.
But relatively few companies are using the full capabilities of RFID to communicate environmental and social governance (ESG) information about products to customers and end users. That’s why the work being done by the RAIN Alliance Sustainability Workgroup is so important.
As co-lead of the RAIN Alliance’s Sustainability Workgroup, I am delighted to be a part of an effort that includes dozens of organizations working together towards better sustainability for supply chains.
Why Sustainable Products Are Gaining a Competitive Advantage
End users care about how their products are manufactured, and many studies have shown that they’re willing to pay more to support better practices.
Brands are taking this seriously: the majority of retail brands now have climate targets. In 2022, we looked at the 50 biggest apparel retailers in the world, and more than 60% of them have climate targets. Of these, more than 70% have targets that are certified by an outside institution as science-based and meaningful targets. Here we have a clear opportunity for the use of RFID Eco tags to a tangible role in the “decarbonization” of the product life-cycle.
For apparel makers and fashion brands, an RFID tag is part of “scope 3” of their carbon emissions – that means that every RFID tag is part of that product’s carbon footprint. If we have tags lower in co2 emissions, we not only help with the data used to improve efficiency and sustainability across the supply chain, but we are also supporting those brands to achieve their Climate targets through the use of more sustainable materials.
New regulations that support better ESG standards are also being enacted every year, especially in Europe and a large proportion of them are addressing traceability of the supply chain and the wider product lifecycle after sale. The sooner the industry adopts ESG standards, the better their competitive advantage, and the bigger the head start they’ll have on compliance. RFID technology can be a major tool to help companies to understand their impacts and make improvements at every step along the way.
Connecting RFID to Greater Goals
When my co-lead, Peter Richards, and I took the helm of the Sustainability Workgroup in October 2022, we concluded with the member companies that RFID needs to go beyond the industry bubble to be perceived as this ESG enabler.
Companies see RAIN RFID as a valuable tool, and it has massive adoption (more than 21 billion items used RAIN RFID in 2020, and analysts predict this will climb to trillions of items by 2030). But most organizations don’t see the greater potential of RFID to speak to their customers to address circular economy projects as well as to address traceability in supply chains. In fact, it’s these traceability systems that consumers want to be able to see.
For example, a clothing brand can use RFID tags to store information about fabrics and other parts. Where and how was the cotton grown? Were ethical labor practices used? What about the carbon footprint? How can the product be recycled? This is the data that consumers want to use to make decisions that extend beyond climate credentials into fair and transparent labor and production methods, which are all part of an ESG mandate that covers all aspects of business practice.
Doing It Right for Maximum Buy-In
The Sustainability Workgroup spent the last months of 2022 developing a very democratically conceived new plan. This democratic process was essential, because it means that we have real buy-in from the member companies, and that will help us get things done as we progress.
As part of the plan, we divided the group into two streams.
The product-focused work stream will develop all the technical studies to define the tags and the main guidelines related to sustainability. For example, what are the main criteria that we need to confirm in order to say that tag is an eco-friendly tag? How do we do life cycle assessments (LCAs) to prove the environmental impact of each tag?
The other workstream will be focused on communication and advocacy — both internally to process teams within companies, and externally with other industries that have never heard about RFID before.
It’s important to educate companies about how RAIN RFID technology can be a huge advantage in achieving sustainability goals and in communicating them. It will be challenging, of course, because we will need to engage with other organizations in the sector, and be creative in terms of securing and building new partnerships.
Greater Things to Come
These are complex projects to implement, but they are possible.
For more than 15 years, I worked with UN initiatives focused on business engagement with sustainability, and I strongly believe in the private sector’s relevance achieving the goals we all want to see. The work that the RAIN Alliance Sustainability Workgroup is doing are the essential and practical steps we need to take to help companies make real improvements.