Textile Exchange Certification Toolkit

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Textile ExchangeCertificationToolkitBasic PackageA free resource for thetextile industryIndustry Integrity Team at Textile Exchange

The Certification Toolkit has been produced by the Integrity Team at Textile Exchange, AnneGillespie, Ashley Gill, Charline Ducas, and Lee Tyler. Additional internal review was done by AngelaRengel. We are grateful to have received comments and suggestions from Karlin Warner andOneCert, as well as Georgina Thomas and Sarah Compsen from Soil Association.Designed by Evonne Tan.Disclaimer: The information included in this fact sheet is designed to provide general information only. Whileevery effort has been made to ensure that the information provided is accurate, it does not constitute legal or otherprofessional advice.Textile Exchange cannot be held responsible for the contents of this fact sheet or any subsequent loss resulting fromthe use of the information contained herein.The information in this guide is based on certification, defined as third-party verification to a recognized standard usingtransaction certificates as the chain of custody system. This is the system of standards most recommended by TextileExchange.2Definitions for terms in bold may be found in Appendix 2 – Terms and Definitions. 2012 Textile Exchange

Table of ContentsIntroduction to the Certification Toolkit - Basic PackageWhat is integrity?44Section One – The importance of certification1.1 Why is certification necessary?1.2 Types of verification1.3 Benefits of certification1.4 Challenges of certification55578Section Two – How does certification work?2.1 Certification mechanisms2.2 Flow of documents in transaction certificate system9911Section Three – What are the essential steps of certification?3.1 The essential steps for brands and retailers3.2 The essential steps for suppliers121214Section Four – How to read certificates4.1 Sample scope certificate4.2 Sample transaction certificate151619AppendicesAppendix 1 - Frequently Asked QuestionsAppendix 2 - Terms and Definitions21313 2012 Textile Exchange

Introduction to the Certification Toolkit –Basic PackageProduct integrity is the linchpin ofsustainability in the textile industry. Thoughit is the most effective and transparentmethod of embedding integrity, the thoughtof complete certification may seemoverwhelming. But it does not have to be. TheIndustry Integrity Team at Textile Exchangeput together the Certification Toolkit as aguide to smoothing out the path to productcertification. Taking into special considerationthe needs of brands and manufacturers,the guide will be useful as the first step inunderstanding how certification works andidentifying the actions for your company tobegin certifying your products. For thosewho have already begun to use productcertification, the Certification Toolkit willprovide answers to implementation issues,reading certificates, and additional technicalissues.The Certification Toolkit – Basic Package isa condensed version of the full CertificationToolkit. The complete Certification Toolkitis available as a benefit at no extra chargefor members of Textile Exchange or may bepurchased by non-members for 250. Formore information, contact us at Integrity@TextileExchange.org. The table of contentsfor the complete Certification Toolkit may befound on page 34.What is integrity?Integrity exists when business practices areconsistent with publicly stated principles. Tocreate a more sustainable textile industry, allactions being taken and claims being mademust be truthful and reflect relevant positivechange.“Integrity is what we do, what wesay, and what we say we do.”- Don GalerIndividuals, companies and organizations arecommitting enormous energy and resourcesto bring greater sustainability to the textileindustry, and many significant improvementshave come along as a result; fibers are beinggrown organically, materials are being recycled,non-renewable resources are being replacedby renewable ones, fewer and less toxicchemicals are used, emissions are reduced andenergy, water and inputs are all being usedmore efficiently. These efforts must be built ona foundation of integrity.Integrity in business is about more than justpurity of intentions. It involves understandingthe sustainability issues being addressed, havinga life-cycle approach1, taking actions to verifythe truth and accuracy of all claims beingmade, and being transparent.Life Cycle: Consecutive and interlinked stages of a product or service system, from the extraction of naturalresources to the final disposal. - ISO 14040.2 Draft: Life Cycle Assessment - Principles and Guidelines.14 2012 Textile Exchange

Section One:The Importance of certification1.1 Why is certificationnecessary?Certification is a means to confirm thatthe levels of social and/or environmentalperformance claimed for a product are correctand verified by an external party.Third party certification is considered oneof the strongest ways to ensure the integrityof sustainability claims. In this system, anindependent third party gives assurance that acompany, process, or product is in compliancewith requirements in a particular standard.Certification provides legal and brandprotection, purchase assurance, and greatercredibility to the claims being made.1.2 Types of verificationThird-party verification: The form ofverification most recommended by TextileExchange is third-party certification to arecognized standard, as it ensures the highestdegree of impartiality and assurance. Ideallythe party who has written and owns thestandard is a separate entity from the partycertifying to the standard. The certificationbody will be accredited by another separateparty (accreditation bodies) to ensureprofessionalism and consistency in the way thecertification is carried out.The advantages of working with independentcertification bodies (CBs) are: Above all, certification is a means forensuring that environmental and/or socialimprovements lead to meaningful and positivechange. CBs make an independent assessment thatstandard specifications have been met.CBs are qualified with a high level ofprofessional experience and expertise.CBs have no commercial interests in theproducts, companies or services assessedand certified.CBs are typically licensed or reviewed byaccreditation bodies, which monitortheir integrity and performance.Working with third party certification ensuresthat the evaluation is robust and credible andhence represents the highest level for integrity.5 2012 Textile Exchange

Verification by standard setting body:Some internationally recognized standardbodies also conduct their own audits tomonitor compliance with their standardsrather than using a separate accreditedcertification body.Second-party verification: A brand mayalso choose to verifiy the products andfacilities of their supply chain on their own; anytime that verification is done by a company ina business relationship with the party beingassessed, this is considered second-partyverification. For example, a spinning factorymay be assessed by a customer. It is often atime-consuming and costly exercise for thecompany gathering information, and requires astrong understanding of both the requirementsbeing made and the production processes andbusiness operations of the companies involved.Certification is one of a numberof options to verify claims beingmade on products. While it ismost often considered to be thestrongest method of verification,there may be situations whereother methods are adequate oreven more appropriate.Negative Testing: A product may be testedagainst a list of restricted substances to ensurethat no harmful substances are present in thefinal product.This may be used to support claims madeabout the health benefits for the end user,or to reduce the impacts of production byrestricting the chemicals that are used.Positive Testing: Product testing may bedone by testing a product for the presence ofeither a marker or substance.Example: Company X puts a marker intoits recycled polyester fiber. It can thentest final products for the presence of thismarker, to ensure that their recycled fiberis actually being used.Testing has limited application, as many preferredmaterials are difficult or impossible to test for;they may have identical physical properties to theconventional materials, and be distinguished by theway they were grown, harvested or processed. Notevery substance, even when used in production,will show up in the final product. Product testingmay also be conducted as part of first, second, orthird-party verification.Self-Reporting (First-party verification):Another form of verification is based onreporting product information from the supplychain members themselves. These may take theform of written assurances or formal affadavitsthat their processes and products are inconformance to a given set of requirements;either self-developed guidelines or a thirdparty standard.6 2012 Textile Exchange

1.2 Benefits of certificationLegal: Because product claims may invokelaws2 around truth in advertising, and certainwords like “organic”, “natural” and othersare legally protected in some countries,certification provides documentation toback up claims being made and meet legalrequirementsBrand Protection: A company’s reputationmay be at stake when claims made about theirproduct are disputed. Certification providesa credible voice, outside of your company,verifying that your claims are valid. If falseaccusations arise, certification can safeguardyour company and prevent actual costs ofdamage control through documented proof.Purchase Assurance: Higher social orenvironmental performance typically comeswith additional cost; certification works toensure that you are getting what you paid for,so your investment is protected.Credibility: Certification through standardsstrengthens recognition of terms like“recycled” or “organic” for the entire industry.It ensures both buyers and consumers that theenvironmental and social product claims arebacked up by a recognized standard.Creating Synergies: Certification tointernationally recognized standardscontributes to greater industry alignment onspecific issues. The greater number of productscertified under similar standards, the easierit is to compare and assess the progress ofthe standards. This allows for appropriaterevision and moves the industry along muchquicker than if every company used their ownstandards.2Speaking the same language: The systemof recognizable standards creates a commonlanguage for suppliers, brands, retailers, andconsumers globally.Demonstrates commitment tointegrity: Rather than an organizationor company simply claiming to addresssustainability challenges, certification providesan opportunity for the company to qualifytheir commitment and have their products orservices verified by a third party.Competitive advantage: Voluntarycertification supports leadership andenhances global competitiveness, by creatingdifferentiation among similar products. Beingcertified to recognized standards createsopportunities to open doors to new markets.Improving product value: Certificationgives an opportunity for manufacturers andproducers to upgrade their products andimprove production practices, which canlead to improved product quality and marketpositioning.Improved recordkeeping: Certificationand its requirements can result in improvedmanagement and recordkeeping. Manycompanies have experienced improvementin strategies and efficiencies aroundrecordkeeping and management practices.Check the labeling laws in the country of sale; or for online sales, check the country where the item is being sold into.7 2012 Textile Exchange

1.3 Challenges ofcertificationCertification is a snapshot in time andin space: Certification is a tool that supportsintegrity. It also supports change as internalcontrol systems are built. However, the audithappens at a particular space and time whichwould not guarantee the situation betweenvisits. Capacity building on the ground ishence very important to ensure continuousimprovement and behavioral change andcreate partnerships beyond traditional buyerseller. No system is fool-proof, but doingnothing is not an option and certification isone of the best tools we have. It should alwaysbe considered as a means and not as an end.Increased Cost: The audit process can becostly for smaller operations. Because thecost is based on the number of facilities,those companies producing a small numberof certified products may find the costsprohibitive. Preparing processes accordingto the standard before the audit occurscan save money. Increased consolidation ofcertified products will also create greater costefficiency.There may also be costs associated withbringing production under compliance. Thesecosts will be upfront, but most companiescan expect increased business and customerloyalty.For more information on the costs ofcertification, see Section 5.Establishing New Relationships: Gettingyour entire supply chain certified may provedifficult. The process seems to be easiestfor those that work through certificationalongside their suppliers. Companies mayalso experience challenges finding acceptablecompanies already certified. Working out thenew relationships may be time-consumingand costly. This process can be streamlined byfinding the company through the standardssetting organization and by consulting theSection 3: Essential Steps of Certification foradditional information.Too many audits can become aburden: External audits take time andrequire additional internal resources. Whenmanufacturers are required to comply withmany different standards, multiple audits occur.This can become burdensome for them andresult in less diligence with each audit. It isimportant to carefully select well establishedstandards that are widely used in the market.ConclusionDespite some of the challenges, certificationremains one of the strongest methods ofensuring product claims are accurate andclear. The value of third-party certificationin verifying product integrity and buildingstrong relationships between suppliers, brandsand retailers greatly outweighs the costs ofbecoming certified.8 2012 Textile Exchange

Section Two:How does certification work?This guide will focus on how the system ofthird-party certification works. It is importantto have a solid understand of the terms usedto explain the process of certification.You canfind a list of key terms in “Appendix 2 – Termsand Definitions”.2.1 CertificationmechanismsThird-party certification is critical to verifyingthe validity of product claims by monitoringwhat happens throughout the entireproduction process.For organic materials, certification ismandatory at the farm level, and is conductedby certification bodies to a farm standardsuch as the USDA NOP standard, or the EU834/2007. After an audit at the farming sites,upon approval, the certification body will issuea certificate of compliance.In order for a brand to sell goods as certifiedto a voluntary standard the entire supply chainmust be certified. This means that the facilitywhere each production step occurs (farming,spinning, fabric manufacturing, dyeing andfinishing, etc.) must be inspected by a licensedcertifier and given a scope certificate, or‘certificate of compliance’, that shows theyare certified to produce goods to the givenstandard. Note that the scope certificate isnot enough to show that the products theyare making have actually been produced tothat standard, as most companies will bedealing with both certified and non-certifiedproducts. Certifications are generally valid forone year, after which another inspection andcertification is required.Producer groups and supply chain membershave access to various certification bodiesdepending on their geographic region, and itis not necessary for brands to specify whichone should be used. However, it is importantto specify which standards the productsshould be certified against, and ensure that thecertifiers they use are accredited or licensedto certify against the required standard.Different certifiers may certify different partsof your supply chain. Each certification bodyshould accept valid documentation fromother certification bodies, as long as they areaccredited to the given standard.As the raw material moves along theproduction chain, transaction certificates(TC’s) are issued each time goods are shipped.The transaction certificate is issued by thecertification body to the producer andrecipient. For example, if the spinning millis sending a batch of yarns to the fabric mill,once the order has been shipped, it will sendthe details of the shipment to the certificationbody requesting a transaction certificate.The spinning mill will then send that TC tothe fabric mill, so that the fabric mill hasassurance that the yarns were certified to thegiven standard. The fabric mill, in turn, will gothrough the same process when it ships to thegarment maker.9 2012 Textile Exchange

The transaction certificate allows certifiersto perform a mass balance test that looksat the total amount of certified inputs thata company received, and the total amount itshipped out (taking into consideration thegain or loss during production). Becauseall certified inputs that a company receivesmust have a TC with each shipment, and thecompany must send a TC with all outgoingshipments, the total flow of certified materialis captured in these documents, and thecertifier can review them during a scheduledor random inspection.When a transaction certificate is attachedto all shipments that contain certified input,complete chain of custody is possible. TC’smay be issued by different certification bodieswithout affecting the tracking or validity of thefiber flow.Your suppliers may show a transactioncertificate that simply shows the inputs theyhave purchased are certified. However, thisdoes not give proof that these inputs wentinto your products – it is even possible thatthe supplier could send the same transactioncertificate to many different customers; morethan could be supplied by the original amount!It is therefore essential that you receive atransaction certificate for each order ofcertified goods that you receive.If a transaction certificate is issued from thelast point of production, it means that thewhole chain has been certified up to yourcompany and that the certified productscontain the claimed material and have beenprocessed according to the specification ofthe given standard. Make sure the TC lists thename of your supplier and lists your companyas the consignee; you should also ensure theproduct information matches the products youhave received from the supplier.If there is any concern about the validity of thecertificate, contact the certifier and ask themto verify that they have issued it. If you arenot familiar with the name of the certificationbody, you may want to double-check thatthey are licensed to the named standard. Thismay be done by referencing the standards’organization website, or contacting themdirectly.Note that transaction certificates may notbe issued until a short time after the goodshave been shipped, i.e. an invoice or shippingdocument has been issued. Because of this, it isimportant to allow for a week or two beforereceiving themFor more information on reading transaction andscope certificates, reference “Section 4 – How toread certificates”.10 2012 Textile Exchange

2.2 Flow of documents in the transaction certificate systemRaw MaterialStandard /VerificationFarm / Raw teKnitting/WeavingDyeing/FinishingSewingBrand / ficateScopeCertificate11 2012 Textile Exchange

Section Three:What are the essential steps of certification?The roles and responsibilities involved withcertification differ depending on which part ofthe sup

The Certification Toolkit – Basic Package is a condensed version of the full Certification Toolkit. The complete Certification Toolkit is available as a benefit at no extra charge for members of Textile Exchange or may be purchased by non-members for 250. For more information, contact us at Integrity@ TextileExchange.org. The table of contents

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