Cotton 2040: The Scenarios

Contents

The apparel sector faces some difficult and complex challenges if it is to transform itself into a vibrant, prosperous and durable industry, and securing a sustainable supply chain for cotton is key.”

— Sally Uren, CEO, Forum for the Future

• Introduction

• Key‘certain’factorslikelytoimpactthefutureofcotton

• Otherkeyfactorsthatmightimpactthefutureofcotton

• Scenariosandwhyweusethem

• Thescenarioframework

• Thescenarios

• Getinvolved

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Introduction

Cotton 2040 brings together stakeholders from across the globe to integrate existing efforts and speed up the shift to a sustainable cotton industry. Its four scenarios were created by Forum for the Future, with the support of C&A Foundation, as a practical means of engaging key stakeholders to better understand the barriers to scaling up sustainable cotton, explore the risks and opportunities for the industry, and identify where collaborative action is most needed.

ThejourneytoCotton2040beganin2009whenForumfortheFutureworkedwithapparelgiantLeviStrauss&CotodevelopitsFashionFuturesscenariosforasustainablefashionindustry.Thesescenariosexploredhowclimatechange,resourceshortages,populationgrowthandotherfactorswouldshapetheworldof2025andthefutureofthefashionindustrywithinit.Theyhavesincebeenusedbyfashioncollegesworldwidetoinspirestudentsandbybusinesstochallengeexistingstrategyandprovideaplatformforinnovation.

In2012,ForumfortheFutureworkedwithTheInitiativesforSustainableCotton(representingorganic,FairtradeandCottonMadeinAfricacotton)usingFashionFuturesasthebasistodevelopfuturescenariosandavisionforthecottonindustry.

Cotton2040buildsontheinsightsandlearningfromCottonFuturesandFashionFutures,andbringstogetherstakeholdersfromacrosstheglobetointegrateexistingeffortsandspeeduptheshifttoasustainablecottonindustry.ItsfourscenarioswerecreatedbyForumfortheFuture,withthesupportofC&AFoundation,asapracticalmeansofengagingkeystakeholderswhentheymetinFebruary2015tobetterunderstandthebarrierstoscalingupsustainablecotton,exploretherisksandopportunitiesfortheindustry,andidentifywherecollaborativeactionwasmostneeded.

Duringtheworkshop,theparticipantsidentifiedmajorfuturerisksandchallenges,andareasforwidercollaboration.ForumfortheFutureisnowworkingwithstakeholdersacrossthecottonvaluechaintoco-createandagreecross-industrywork-streamstotaketheactionplansforwardandalignactivitiestowardsasustainablecottonindustryforthefuture.

‘Certain factors’ are driving trends with highly determined outcomes - that is, we can be relatively certain how they will play out over time.

These feature in all the Cotton 2040 scenarios, though emphasis may vary from scenario to scenario, as might the societal response to them.

Resource scarcityKeyresourcesneededtosupporthumankindarebecominglyincreasinglyscarce,andthisonlysettoworsenasthepopulationgrows.

Asresourcescarcityincreases,thecostsfortheseresourcesarelikelytobecomeincreasinglyhighandvolatile,withmassiveimpactsonthepriceofproductionandsupplysecurity.Volatileoilprices,forexample,willhaveadramaticimpactacrosstheclothingsupplychain,withaknock-oneffectonthecostofpolyester(aby-productoftheoilindustry),pesticides,fertilisersandtransport.Cottonproductionisalsolikelytobecomeincreasinglyconstrainedaswaterbecomesscarcerandpesticidesmoreexpensiveandregulated.

Increasingly extreme climate change impactsIndevelopingthefourCotton2040scenarios,wehaveusedtheRCP6.0scenariofromthe2014IntergovernmentalPanelonClimateChange(IPCC)assessment,whichisthehigherofthetwomiddlescenariosandassumesnoadditionaleffortstoconstrainemissions2.Basedonthisversion,itiscleartheclimatechangemitigationeffortshavehadlittleimpactcomparedtowhatisneeded;forinstance,atcurrentrateswewillbreachthecarbonbudgetneededtokeeptemperaturerisesto2°Cby20343.

InthelatestIPCCreport,thelinkwasclearlydrawnbetweenmanmadeclimatechangeandweatherextremessuchasheatwaves,droughts,floods,wildfires,andhighlightstheexposurehumansystemsandecosystemshavetoclimatechange2.

Key ‘certain’ factors likely to impact the future of cotton

1http://esa.un.org/unpd/wpp/unpp/p2k0data.asp|2http://www.ipcc.ch/pdf/assessment-report/ar5/syr/SYR_AR5_LONGERREPORT_Corr2.pdf|3http://www.pwc.co.uk/issues/megatrends/issues/climate-change-and-resource-scarcity.jhtml|4http://www.securetrading.com/blog/online-shopping-trends-2015-rise-mobile-shopping/

Agricultureisveryvulnerabletotheimpactsofachangingclimate,cottonproductionincluded,anditislikelytosufferfromthepredictedrisingtemperatures,decreasedsoilmoistureandmoreextremeweathereventsandflooding2.Althougheffectswillvarybyregion,theoverallimpactofclimatechangeonglobalagriculturewillprobablybenegative.Thisislikelytoexacerbatefoodsecurityconcernsinthefuture,possiblyleadingtodifferentlandusepriorities,suchasgrowingfoodovercotton.

Spread of ICTInformationandcommunicationstechnology,orICT,isspreadingatanexponentialpace.In2010,lessthan1%ofonlineretailsalesweremadeviamobiledevices(smartphoneortablet).In2014,37%ofUKonlinesalescamefromthesehandsets,whichrepresentsgrowthof4,000%injustfouryears4.Inaddition,in2014salesviadesktopcomputersdecreasedby3billion,representingaswitchtom-commercethatisexpectedtoaccelerateasmobiledevicesgetcheaperandusersbecomemorecomfortablepurchasingwiththem.

By2040,thelandscapeofICTwillbeunrecognisablefromwhatitistoday,muchlikehowthelarge,mainframecomputersofthelate20thcenturywereradicallydifferenttotoday’shighly-connected,mobile-enabled,always-onworld.ThroughtheincreasedsophisticationandspreadofICT,trackingproductsupplychainsisbecomingmoreaccurate,lessexpensiveandeasierthanever.ThisincreaseintheadoptionofICTisshiftingconsumerexpectations,withmoredemandsfortransparencyandinformationaboutproductsandservices.

Population growthBy2040theworld’spopulationisexpectedtoreach9billion,fromabaselineof7.3billionin2015.Forecasterspredictthattheincreasewillbealmostentirelyintheleastdevelopedcountries,whilethepopulationinthedevelopedworldwillremainlargelystable.

Thisgrowthwillhavesignificantimpactsonthelabourforceandnatureofthedemandfortextiles1.

Other factors will also have a major influence on the future, but we can be much less certain about their outcomes.

Wehavearticulatedtheseasquestions,whichweaddressacrossthescenarios.Theyplayoutdifferentlyineachscenarioandhighlightthedifferentpossibleoutcomestheindustryanditsstakeholdersmighthavetocontendwith.

Other key factors that may impact the future of cotton

• How will the industry respond to resource scarcity, high/volatile input costs and climate change?

• Where will cotton be grown and used in 2025?

• We know ICT is likely to have an impact on purchasing behaviour, but how will ICT change cotton production?

• What type of cotton will farmers grow?

• Will there be more or fewer people involved in cotton production?

• What effect will changing factors have on the future supply and demand of cotton?

• How will the industry be structured in the future?

• How volatile will the price of cotton be?

• What happens to cotton garments at the end of their life?

Scenarios and why we use them

Although we cannot predict how the world will change over the next 25 years, we can be confident that it will be very different from today.

Futurescenariosareapowerfultooltohelpusimaginedifferentpossiblefutureworldsandtobetterunderstandhowkeytrendsareshapingourworldtoday.Theyarenotpredictionsordepictionsofdesirablefuturesthatwewishtopromote,andtheydonotrepresentourvisionofasustainablefuture;rather,theyaimtochallenge,inspireandexcite,sothatwefeelmotivatedtoplanforabetter,moresustainablefuture.

The scenario framework

The scenario frameworkThesescenarioswerebuiltonaframeworkthatForumfortheFuturepreviouslydevelopedwithLeviStrauss&Cotoexplorepossiblefuturesforthefashionindustry.Thatprocessidentifiedtwohighlysignificantanduncertainfactors—thepaceoffashionandtheconnectednessoftheworld—andusedthemtogeneratethefollowingframeworkoffourscenarios.Expertinterviewsandin-depthresearchhelpedustodevelopandadaptthefuturescenariosforthecottonindustryto20401.

1Intervieweesincludedkeycottonandfashionindustryexpertsandstakeholdersacrossthecottonsupplychain.Weareverygratefultoeveryonewhocontributedtheirtimeandexpertise.

The scenarios: Community Couture

The world is struggling to cope with the impacts of climate change and the price hikes on resources caused by their scarcity, and it splinters. Communities strengthen as many strive for self-sufficiency. Nation states are closed and protectionist, focusing on securing food and energy supply for themselves.

LackofwaterdisruptsproductioninfactoriesacrosssomeregionsinChina.

SanFranciscoopenstheworld’slargestclothinglibrary;thecottonsectionisthemostpopular.

Indiadevelopsthe‘LowFlow’communityself-sufficiencymodel–totallyoffgrid,zerofossilfuelandfocusedoncommunity-levelproductionofkeygoodsandservices-whichspreadsglobally.Thefirstsmall-scalecommunitycottongrowingschemeissetupinaLowFlowneighbourhoodinRajasthan,sellingitscottontoDelhi’sluxurymarket.

Highoil,energyandlabourcostspushthepriceoftheaveragecottonT-shirtto$100.

Small-scale,decentralisedrenewableshavebecomeextremelypopular;inmostcommunitiesover50%ofenergycomesfromthesesources.

TheAmazonrainforesthasallbutdisappearedinthepaniclandgrabforfoodandfuel.Astudyrevealsithasreducedto7%ofitssizein2012.

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Consumer preferences and demand for cottonCottonisstillhighlypopular.Designersandmanufacturershavesimplyshiftedtheirfocustocreatingbeautifulremanufacturedcottonclothing.Bespokevirgincottongarmentsexist,butarereservedfortheluxurymarket.Asaresult,cottongarmentsarecherishedandhandeddowntothenextgeneration.Whentheybuynew,peopleinvestinclothingandtextilesdesignedtolast.Somehaveeventakentosellingsecond-handcottonclothingtoboosttheirincome.Thereisalsoanemergingmarketinsecond-handluxuryforconsumerswhoaspireforbetterthingsbuthavelimitedspendingpowerandliveinaworldoflimitedfabricsupply.Forthemasses,thereareplentyofclothes-leasingservices(e.g.clothinglibraries)andrenewaloptionsforexistingclothes.Onlytherelativelywealthycanaffordawashingmachine;mostpeopleusecommunitylaundriesandcatchupwithfriendsortakeeveningclasseswhiletheywait.

Cotton production and priceCottondemandandconsumptionisamixedpicture.Virgincottonfibreisaffordabletoluxurymarketsonlyandthereisverylittleofit,althoughevenluxuryconsumershavehadtoadapttohigherprices.‘CottonNu’garmentsaremadefromhigh-quality,affordablecottonfromrecycledfibresandsoldallovertheworld.Sustainabilityisnotprioritisedassuch,sincepeoplejustwanttheircottonforthebestpossibleprice,althoughironicallywearenowlivinginamoresustainableworldsimplyasaresultofextremelocalisationofeconomicactivityandloweroveralllevelsofgrowth.Virgincottonpricesareskyhigh;second-handandCottonNugarmentsaremoreaffordable.

The scenarios: Community Couture

Cotton industry structureThecottonindustrystructurehaschangedradicallysincethe2010s.Cottonfarminghasbecomeprohibitivelyexpensive.Thebestbusinessopportunityin2040iscottonrecyclingandupcycling,andthisiswherethemainstreamoftheindustryisfocused.Inordertoencourageconsumerstosupportthisbusinessmodel,take-backschemesareplentiful,providingmoney,vouchersoraserviceinexchangeforusedcottonclothing.Laboursupplyintheindustryisplentifulwiththemassesofclimatechangerefugeesprovidingthebulkoftheworkforce–especiallythosethatescapetheglobalsouthwherewe’veseenthemostpopulationgrowthandthemostintenseandwidespreadclimatechangeimpacts.Somecommunities,however,havetakenmattersintotheirownhandsandgrowcottononsmallplots.Someoftheprocessingofcottonalsohappensinlocal/regionalcommunityclusters:textilefactoriesareoftencommunity-ownedandrun,andlinkedtothecottonfarmingcooperatives;however,thismakesforverylittlevolume.Aparticularchallengeforthesecommunitiesatthefarmingendisthelackofgoodqualityseed.Becausevirgincottonissoprizedandsorare,community-ownedfarmsandfactorieshave24-hourarmedguardswatchingoverthepremises.Thefalloutforthecommunitiesintraditionalgarment-producingnationshasbeenharsh,withlotsofpeopleoutofworkasthecotton-producingindustryshrinksradicallyandrestructuresintoarecycling/remanufacturingindustry.

Land useLanduseisheavilybiasedtowardsfoodproduction,leavinglittleroomfortextilecropslikecotton.Wherecottonisgrown,thefarmsizestendtobesmallandmultipurpose,switchingbackandforthbetweencottonandfoodcrops,aswellasutilisingcottonseedforfood.Farmsareoftencooperativelyownedbygroupsinthecommunity,andalmostalwaysincluderenewableenergyintegratedwithcropproduction.

Climate change impactsThereisnoglobalagreementtoaddressclimatechange,andeverycountrytriestocopeonitsown.Ironically,thisisamuchmorelowcarbonworld;emissionsaredownsignificantlysimplyasaresultoflowerlevelsofglobalgrowthandindustrialactivity,aswellasthegrowthofsmall-scalerenewablesatthelocalcommunitylevel.Thecottonindustryisrespondingtoclimatechangeandresourceissuesreactively.Yieldsaredifficulttopredictasaresultoferraticweatherpatternsandwaterscarcity.

Input costsInputcostsareprohibitivelyexpensive,particularlyforthingslikeoilandwater.Asaresult,supplyofinputstendstobeprioritisedforessentialslikefood.Thecottonindustrystruggleswithinputcostandsupply,whichmeansthatproductionyieldsareerratic.Asaresult,itisinvestingmoreandmoreinsettingup‘remanufactories’focusedonrecyclingcottonfibres,whicharepoweredbysmall-scalerenewables.Thebulkofthecottoncropisorganic,simplybyvirtueofthefactthatpesticidesandherbicidesaresoexpensive.

End of lifeAtendoflife,cottonisrecycledmeticulously.Notonescrapofcottonfabricisdisposedof,sincecottonfibresarefartoovaluable.MajorCottonNurecyclinginnovationfromJapanmeans‘asnew’cottongarmentscanbemadefromrecycledcottonfibres.Communityrecyclingcentresareopeninguplinkedtonearbyfactories.

The scenarios: Community Couture

The role of governmentGovernmentsarefairlyclosedandnationalisticintheirapproach:‘protectyourown’isthemottoofmany.Countriesstockpilecottonwheretheycan.However,thereisagenerallackofcapacityandmeaningfulfundingtosolvemanyofthechallengesofcommunities,asaresultoffailingtoprepareearlyfortheonsetofclimatechangeimpacts.Thismeansmanygovernmentsareparalysedandcommunitiesaretakingthingsintotheirownhandsintermsofdevelopingandprovidinglocalisedsolutions.Thishascreatedextremelystrongcommunitybondsinmanyplaces,andageneraldistrustofgovernments.

TechnologyThekeytechnologiesemployedinthecottonindustryarefocusedonreuse.Therehavebeenbreakthroughtechnologicalinnovationsincottonyarnrecycling,andrecycledcottonfibrehasreplacedvirgincottonfibreasthemainstayoftheindustry.Thereisalsoinvestmentinclosingthelooponwaterusethroughoutthecottonsupplychain,aswellasno-wastepattern-cuttingtechnology.Atthefarmend,thereisastrongfocusondevelopingmoreresilient,higherqualityorganiccottonseedsthatcansurviveclimateshocksandresourcescarcity,andtherebyincreasethesupplyofvirgincottontothemarket.However,sofarthishasonlyhadlimitedsuccess.Wearestillveryconnecteddigitallytheworldover,andcommunitiesusethistosharebestpracticeandorganisearoundcommoncross-borderinterests.Forexample,thereisavirtualcommunitycampaigningtoresolvetheHimalayanwatercrisisacrossIndia,Nepal,Bhutan,ChinaandPakistan.

The best business opportunity in 2040 is cotton recycling and upcycling, and this is where the mainstream of the industry is focused.

There have been breakthrough technological innovations in cotton yarn recycling, and recycled cotton fibre has replaced virgin cotton fibre as the mainstay of the industry.

The scenarios: Slow is Beautiful

Slow food and fashion are the predominant mindset in this world, with consumption patterns driven by sustainability considerations. Consumption and environmental impact are closely monitored and highly regulated. Cotton has become a high-value product, and with resource scarcity and high input costs, high-quality cotton is looking increasingly like the most sustainable option. Consumers value cotton as a natural premium fibre and are willing to pay more for a smaller number of high-quality cotton products. Consequently, overall levels of production are down, but margins are higher and this sustains the success of the industry.

SuccessfulNGOcampaignsmeancompaniesarescaredofbeingseenasunsustainable,andthedemandforsuppliesofsustainablecottonrisessignificantly.

Aglobalclimatedealissigned.Uzbekistangoesbankruptafteritsexportcottoncropconsistentlyfailstomeetsustainabilitystandardsontheworldmarket.

Theglobalcommunitycreatestradeagreementswithinputfromscientists,sortingoutthebestclimatesfordifferentcropstogrow.

LedbyEurope’sexample,thereisstrongworldwideinvestmentinrenewableenergyandinfrastructure.Globalsustainabilitystandard‘SustainGrade’islaunched.

Aftermorethanadecadeofmassiveinvestmentinclean-techbyChina,theUSAandtheEU,pricesofecologically-sustainablegoodsfallbelowthepricesoftheirunsustainable,resource-intensiverivalsacrossallsectors.

Severedroughtleadstowaterrationingacrosstheworld,withprioritygiventofoodproductionandpersonalconsumptionrations.

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Consumer preferences and demand for cottonCottondemandandconsumptionissustainable.Brandsbuildinhighlevelsoftransparencyaroundwheregarmentscomefrom;‘nutritionlabels’detailinputsintoeachgarment.Brandscurateandsharepersonalstoriesaroundwheregarmentscomefromandthelivesofpeoplewhomadethem.Whenwornout,garmentsarerecycledorremadeintonewones.

Overallconsumptionisdownduetoresourcesconstraintsandtheshiftofvaluesawayfromhigh-consumptionlifestylestoslower,moredurablefashion.Despitethis,demandforcottonishighasitcanbegrownsustainablyandisanaturalfibre.Cotton’smainsourceofcompetitionisfromothernaturalfibressuchasflax,viscoseandhemp.

Themosthighlyvaluedtypeofcottonisvirginorganiccotton,whichhasbeentakentoscale,encouragedbygovernmentsupport.SustainGradecottonisthemostpopularandaffordable,whichmeetsanamalgamationofthebestsustainabilityindicatorsfrompreviousstandardsonsustainabilityandoftenisablendofvirginandnaturalfibres.Theconceptofqualityhasevolvedtotakesocialandenvironmentalfactorsintoaccount.

Brandsbuildandmaintaintheirreputationassuppliersoffabricsfromsustainable,trustedsources,whichconsumerscanverifythrougheasilyaccessibleICT.

The scenarios: Slow is Beautiful

Cotton production and priceCottonisgrowninregionsmostsuitedtogrowingit,particularlyinthemorearidregionswherethereislesswateravailableforfoodproduction.Technologiesaredevelopedtomaximisetheuseofwater,suchasadvanceddripirrigation.Thestrongest’hubs‘areinIndia,Africa,NorthAmericaandTurkey.Tajikistanisaleaderinaluxurioushigh-end,extra-longstaplefibre.Subsistencefarminghasdecreased,aslarger,moreefficientfarmshavedeveloped.Providinggoodconditionsforworkershasbecomeapriorityfortheselargerfarmsandlabourconditionsacrosstheindustryaremonitoredandregulated.Internationalagreementsoncommoditypricesmeanfarmerscanhavegreatercertainlyonforwardprices.

Cottonproductionlevelsaredownoverall,butthequalityofproducedcottonissignificantlyhigheranddesignedforlonger-termuse.Thismeanspricesareconsistentlyhigherandproducersmakebiggermargins.Theindustrycontinuestobesuccessful.

Cotton industry structureThecottonindustryisgloballyinterconnectedandcollaborative.Brandsandretailersareinvestingmoreincottonfarmingandthedevelopmentofmoresustainablepractices,fromagriculturetolabour.Largeclothingrecyclingplantshavegoneonlinearoundtheworld,usingnewtechnologytorecyclecottongarments.

Land useLandisprioritisedfortheproductionoffoodovercottongrowing.Landisnotusedtogrowbiofuelduetoearlyandsuccessfulglobaldevelopmentofrenewableenergythatisnotlandintensive.Manyfarmershaveshiftedtheircropsfromfibretofood;cottonisgrownindrierregionsthathavemoreflexibilityandlowerinputcosts,whereasfoodtakespriorityinregionswherewaterismorereadilyavailable.Agloballand-useorganisationhelpstoorganiseinternationalagreementstobalancerurallandusebetweenfood,fibreandforest.

Climate change impactsTheimpactsofclimatechangeareevidentgloballyandaffectbusiness,policyandeverydaylife.Thecottonindustryhasrespondedproactivelyandthroughinternationallycoordinatedefforts.WaterisincreasinglyscarceinAsia,SouthandCentralAmerica,andAfrica.Seedresearchandirrigationtechnologyissharedacrosstheglobe.Awarenessoftheinterconnectednessofconsumptionandclimatechangeishighthroughouttheworldanddrivessustainableproductionthroughoutthesupplychain.

Input costsLabourcostshaveevenedoutacrosstheglobeduetointernationalminimumwageagreements.Energyissuppliedprimarilythroughrenewables.Thepriceofoilishighduetohightaxesimposed,butthishaslittleeffectonthetextileindustryasfossilfuelshavebeenphasedoutoverthelasttwodecades,bothintermsofinputsandasprocessedintosynthetictextiles.

The role of governmentGovernmenthasaprominentrolegloballyinco-ordinatingefforts,suchaswherecottoncanbegrown,whatpricingmechanismscanbeused,whatinformationshouldbedisclosed,howproductscanbemarketed,andsoon.Garmentsareproducedinthemostefficientwaypossible,owingtointernationaltradedeals.Workconditionsareconsistentlybetterduetointernationalagreementsonminimumwageandworkingconditions.

TechnologyThemaintechnologiesusedincottonproductionare‘appropriate’,tailoredtotheconditionsspecifictoeachregion.Theuseofgeneticmodification(GM)technologyisillegalinmostcountries.Farmersuseadvancedcroprotationtechniquesandothersustainablepractices.Therehasbeenashifttousingheritageseedvarieties,andresearchanddevelopment(R&D)focusisonpropagatinghigh-quality,condition-specificvarietiessuitablefororganicgrowing,particularlyinmorearidregions.

ICTandtrustedbrandlabellinghelpsconsumersgettransparentinformationaboutallstagesofcottonproduction.

End of lifeAttheendoflife,cottonisrecycledinanefficient,streamlinedway.Designforendoflifeiskeyinthefashionindustry,anddesignershavethetoolstheyneedtoplanfordeconstructionandrecycling.

Cotton production levels are down overall, but the quality of produced cotton is significantly higher and designed for longer-term use. This means prices are consistently higher and producers make bigger margins.

The scenarios: Slow is Beautiful

The scenarios: Techno-chic

The world is healthy, wealthy and ultra-high-tech. We have transitioned to a low-carbon economy earlier than the pessimists thought we would, all thanks to the scaling up of cost-efficient clean technologies. Globally, markets are open with very few trade barriers. Investment in R&D is heavy and distinguishes the winners from the losers in industry. Guilt-free, fast fashion abounds: people believe technology has erased the need to worry about ‘overconsumption’.

Fashiondesignersunveil‘mood-mimicking’clotheswhichchangecolourtoreflectthewearer’smood.Theybecomeaglobalobsessionandarereplicatedonthehighstreetwithindays.

Thefirstglobal‘virtual’fashionweekisahugesuccess.

Chinaring-fences$25b,andIndia$14b,forR&Dforzero-carbontextilemanufacturing.

‘CO0’-thenewzero-carbonsyntheticfabric-takesthevirtualcatwalksandonlinestoresbystorm.

Carbonemissionsandwaterconsumptionaredownby50%comparedto2011,exceedingexpectations.Thisisthankstothescalingupofrenewabletechnologiessuchashydropower,windandsolar,aswellasmassivegainsinenergyefficiencyandCCStechnologiescomingonboard.

Themilestoneof100%digitalfabricationismarkedinSriLanka,makingthecountrythemostadvancedandcost-effectivetextileproducerintheworld.

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Input costsDuetoclimatechanges,moresophisticatedinputsaredemandedbygrowerstoensuregoodyieldsandhealthycrops;butatthesametime,theseinputsaremuchmoreexpensivethantheywerebefore.Oilisnolongertheprimaryenergycarrier,althoughitisstillimportantintermsofthepetrochemicalsrequiredtodevelopthelatestgenerationofpesticidesandherbicides.Alternativeenergyismuchmoreaffordablenowadays,particularlyinplacesinthesouthernhemispherethathavescaledupbigsolar.However,thisadvantageissomewhatoffsetbythehighcostoflabourinthecottonindustry:gonearethedayswhengarmentproductionwasdonebylow-paid,unskilledworkers;in2040itisallabouthigh-skilled‘agroscientists’anddigitalfabrication.Butthecottonindustrystillmanagestosurviveandthrivedespiteloweroverallvolumes.Thisisthankstoitshighmarginsandinvestmentinseedtechnologythatreducesdependenceonwater,pesticidesandotherinputs.GMtechnologiesarewidelyusedandtightlyregulated.

Consumer preferences and demand for cottonGarmentsarenolongerflyingofftheshelves,butoutof3-Dprinters,andareoftendeliveredbydrones.Toconsumers,theshoppingexperiencefeels‘guilt-free’fromtheperspectiveofenvironmentalimpacts,thoughfewaskthemselveswhatunintendedconsequencessuchrampantconsumptionmightbehavingonsocieties.Globalbrandsarebig:thereisverylittlelocalbranddifferentiationpossibleinthishyper-connectedworldwherethelinebetweenconsumerandproducerisblurred,andconsumersareusedtohackingdesignstoadaptthingsexactlyhowtheylikethem.

Cottonconsumptionissignificantlylower,butsteady.Itcaterstoasmallnicheofpeoplewhocravenatural,heritagelifestyles

The scenarios: Techno-chic

andarerebellingagainstwhattheyseeasatechnology-obsessed,alienatingsociety.Theseconsumersarewillingtopaygoodmoneyforaluxury,naturalfabriclikecotton.Thecottonindustryhas,however,hadtoadapttosomeimportantdevelopments,suchaswearabletechnology.Themostpopularcottonproductsonthemarkettakethenatural,wellnesstrendandspinitintohigh-techofferings,suchasclothesthatpurifypollutedair,providenutrientstothewearerandrepairthemselveswhentheywearout.

Cotton production and priceCottonproductionlevelsarelowerbecauseoftoughcompetitionfrominnovativesynthetics.However,theindustryachieveshighmarginsbecausecottonisprocessedusinghigh-techmethodsandisamoreluxuriousfibrecommandingaveryhighprice.

Cotton industry structure

Competitionfromsyntheticfibreshasseenthecottonindustryshrinkdramatically.Theindustryhashadtorestructureextensivelyintherunupto2040,withalargepercentageoftraditionalplayersfailingalongtheway.Manylosttheirjobs,causingabigdisruptionglobally–thetransitionyearswereextremelytough,particularlyonthesmallholderswhoselivelihoodswerenotresilienttobeginwith.Butthe‘winners’whoremaindowellforthemselves.Theindustryismorestreamlinedandefficientthaneverbefore:numerousintermediariesandhighly-decentralisedproductionareathingofthepast.Thenowsmallercorehashadtoprofessionaliserapidlyinordertosurvive.Thismeansfewerplayersinthesupplychainoverall,andlargerfarmsthataredirectlyconnectedwithbuyers.Digitaltrackingsystemsmakeitall100%transparent.High-techseedsmeancottonisable

Land usePressuresonlandhaveeasedsomewhat:therehavebeensignificantefficiencygainsinagricultureandfooddistributionsystems,andin2040weliveinaworldofzerowaste.Buttherearealotofpeopleontheplanetandittakesrealefforttokeepallthesystemsworkingsmoothly.Foodisgrownundergroundandonverticalfarms;butsincesyntheticfabricshaveadvancedsomuch,lesslandisneededtogrowplantslikecottonandflaxfortheproductionoftextiles.Cottonisstillgrown,butthisisamuchsmallervolumethaninthepast.

Climate change impactsWehavemanagedtostaywithina2°Criseinaverageworldtemperaturesby2040,andintheprocesshaveadaptedtolowercarbonlifestyles.However,thathasnothelpedwardofftheimpactsofclimatechange,whicharehittinghardduetocarbonemittedbeforeaglobalcarbonagreementwasstruckandeconomiestransitioned.Day-to-daylifeispunctuatedbyincreasinglyintensestorms,wide-rangingwildfiresandmoredrought,amongotherchanges.Weneedallthetechnologywecangettoensurepeoplearelivingcomfortablelifestyles,regulatingerratictemperaturesandinvestinginexpensiveinfrastructuresolutionsthatprotectusfromextremeweather.

Asmaller,morehigh-techcottonindustryisrespondingtoclimatechangeandresourceissuesthroughtechnology-focusedinnovation,asaremostothersectorsoftheeconomy.Becausecottonisanexpensive,high-endmaterial,cottongrowersareabletoinvestinGMthatensuresdrought-andflood-proofseeds.Furtherupthesupplychain,clothesaredesignedandmadetorequirenowashing.Synthetically-coatedcottonisthepinnacleofluxury‘natural’fabric.

TechnologySophisticatedtechnologypermeateseverystageofcottonproductionandconsumption,fromhigh-techseeddevelopmenttosmartirrigationsystems,fromdigitalfabricationmethodstowearabletechnologyapplicationsthatconsumerslove.Digitalplatformshelpmakethesupplychainsuper-efficientandthereforecost-effective.Inanefforttocompetewithsynthetics,thecottonindustryhasinvestedheavilytogozerocarbon,includingintheusephaseofthegarmentsitsellstoconsumers:self-cleaningcoatingsmakeclotheswashingathingofthepast.Wasteisano-no,sincecottonfibresareexpensiveandthereforetheindustrygoestogreatlengthstorecyclethem.Nottomentionthatconsumersaskforextensivecustomisation,sotheindustryhashadtostructureitselftoallowformade-to-ordermodularproductiontocutdownonwaste.Apparelbrandsprovideweb-basedpatternsthatallowconsumerstocustomiseclothingdesign,whichisthensentontothelocalandregionalmanufacturerstoproduce.

End of lifeAtendoflife,cottonisalwaysusedasaresourceforsomethingelse.Allclothingisdesignedfordegrading,disassembly,remanufacturingand/orreuse.Fromtimetotimetherearescandalsinvolvingsyntheticfibrepollutionwhereclosed-loopsystemsgowrong,butclothingwastetolandfillisrare.

togrowinmoreplaces,sofarmingistypicallyclosertoprocessingandmanufacturing.Thenotionofsweatshopsisnolongerfamiliarinpopularculture,notleastbecauseproductionismostlyautomatedanddigitised.Thepeoplewhostillworkintheindustryaremainlyhighly-qualifiedprofessionalsratherthanlow-skilledlabourers.Itisaprestigiousjobtohaveandtheseworkershavealotofleverageintheindustry.Asiaisakeygeographiclocationandbillsitselfastheartisanalandheritagehubofcottonproduction.

The role of governmentGovernmentsensuremarketsareopenandtradeflowsfreely;mostcountrieshaveseenbigeconomicbenefitsfromtheabilitytosharetechnologyandinnovationeasilyacrossborders,soprotectionismisoutoffavour.However,governmentsdoinfluenceR&Dandinnovation,channellinginvestmentsintoareastheyseeashighpriorityforeconomicdevelopment.Inthecontextoffibre,thisoftenmeanssupportingthedevelopmentofalternative,syntheticfabricsthatcanhelpachievenational-levelgoals,suchasgoingzerocarbon.

Cotton production levels are lower because of tough competition from innovative synthetics. However, the industry achieves high margins because cotton is processed using high-tech methods and is a more luxurious fibre commanding a very high price.

The scenarios: Techno-chic

The scenarios: Patchwork Planet

Regional self-sufficiency predominates in this fragmented world, which is broken into cultural ‘blocs’ with unequal economic performance and conflict over scarce resources. Trade is tightly controlled by governments and its barriers (tariffs and quotas) are high.

Some regions produce a lot of cotton for local consumption and trade, though this is offset by other regions which no longer produce any. Where it is grown, cotton production levels are high and the fibre is in great demand. Consumers want fast, flexible fashion that reflects their local identity and supports the regional economy.

The cotton industry is responding to climate and resource shocks in a reactive, patchy way. As climate impacts worsen, the industry is collapsing in some regions and struggling to adapt in others, resulting in increasing resource conflicts between regions.

EightmajorcoordinatedterrorattacksincitiesacrossNorthAmericaandEuropeleadtounprecedentedlevelsofsecurityandsuspicion.

TheWorldTradeOrganisationdisbands,bucklingafterheavytradedisputesbetweenChina,theEUandtheUS.

Oilpricesbecomeveryvolatile;drasticpriceshiftspersuadepeopletostartexploringmorelocalandsecureproductionalternatives.

Indiaimposesitsfourthconsecutiveannualcottonexportban.

ScandaleruptswhenGreek‘seedspies’arecaughttryingtostealcottonseedtechnologyinTurkey.

FouryearsofdroughtleadtocottongrowingbeingabandonedthroughoutlargetractsofSouth-EastAsia;wholecommunities,includingfactories,aredesertedaspopulationsofclimaterefugeesleaveforcitiesormorefertileregions.

ResourceconflictseruptbetweenGreeceandTurkey,andincreasinglyinotherregions,overfood,waterandothercommodities,includingcotton.

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pronetoflooding,forexample,andtemperature-adaptivecottonpredominatesinplaceswheretherearealotofextremeheatevents.

Input costsInputcostsaremoderate,oftenmaintainedthroughgovernmentintervention.Thecostofoilishigh,butmosteconomieshavetransitionedawayfromrelianceonfossilfuelstomorelocally-availablealternatives.Africainvestedheavilyinsolartechnology;otherregionsrelyonnuclear,biofuels,solarandwind.Governmentcontrolsmaintainpricesthatareaffordable.Labourcostsarelow,duetocheaplabourfromclimatechangerefugees,theincreasedmechanisationoffarmsandproductionprocesses.

Consumer preferences and demand for cottonCottondemandandconsumptionisfast-pacedandlocally-flavoured.Consumerswantfashionthatreflectstheirregionalidentity.Companiesprovideclothingwithastronglocalheritage;globallyinfluencedfashionsaremetwithdisapprovalandsuspicion.

Citizensare‘fashionengineers’:cheapDIYsetshelppeoplemaketheirownoutfitsandaccessoriesoutoflocally-availablematerials.Retailersofferstronglocalpresenceandidentity,’fashionupgrades’tolocaltrends,virtualpersonalisationandfastdelivery.Consumersarefocusedongettingwhattheywant,whentheywantit,andarelessconcernedwiththesustainabilityofproduction.

Wherecottonisavailable,demandishigh,andthemostpopular(andaccessible)islocally-grown.Thisleadstoincreasingresourceconflictsassomeregionsbecomelessabletoproducetomeetdemandduetoclimatechange

The scenarios: Patchwork Planet

impacts.SomecountriesinSouth-EastAsia,wheredemandexceedslocalsupply,areseekingtocapturemorecottonfromabroad,butsupplyisvolatileduetoprotectionistpolicies.

Cotton production and priceCottonisgrowninregionsaroundtheworld.Manycountriescelebrateitasa‘localfibre’.Thecottonlabourforceissmallerthanitwas20yearsago.Advancesintechnologymeancottonproductionislesslabourintensive.Manycountrieshavehadtoinvestintechnologyinordertomovemanufacturingclosertoconsumers.

Thelabourpoolandskillcapacityvariesacrosscountries:insomeregionscottonproductionisthriving,whereasinothersitisindecline.

SomeAsiancountries,wheredemandisoutstrippinglocalisedsupply,arealsoseekingtocapturemorecottonfromabroad.Cottonfarmingistypicallydoneonaverylargescaleonhighly-mechanisedfarms.

Cotton industry structureThecottonindustrystructureisradicallydifferent,withnationalentitiesplayingadominantrole.Globalcottontraders’monopolieshavebeenbrokenupinfavourofnationalandregionalplayers.Globalbrandsstilloperate,butwithregion-specificmarketingandsupplychains.

Land useLanduseisdividedbetweenfoodproduction,energyandfibre,usuallythroughstrictgovernmentcontrol.Whereconditionsaregood,foodandcottonarebothgrown.Inmanyregions,however,foodisprioritised,leadingtoshortagesofcottonandpeopleturningtoalternativefibres.Sometradeagreementsenablenon-cotton-producingcountriestoobtainit,thoughsupplycanbeunreliableduetoprotectionistpolicies.Thescaleofcottonfarmingistypicallylargerthanitwasintheearlypartofthecentury,andhighlymechanised.

Climate change impactsTheindustryisrespondingtoclimatechangeandresourceissuesinareactive,self-interestedway.Climateimpactsarehittinghard,withmoreextremeweather,increasingwaterscarcityandfallingyields.Disruptiveproductionshocksunderminetheindustryandregionsrespondindifferentways.Asclimateimpactshaveincreased,agriculturalyieldshavefallen,particularlyinplaceswherethereisn’tmoneytoinvestinadaptation.Intheseplaces,thecottonindustryhasshrunk,asacutefoodandenergysecurityissuesleadtotheprioritisationoflanduseforfood,biofuelsandsolarenergy.Insomeregionstheindustryhasdisappearedaltogether:cottongrowingandproductionwasabandonedinlargetractsofSouth-EastAsiaafterconsistentyearsofdroughtandfloods.Wholepopulationshavebecomeclimatechangerefugees,leavingforthecitiesandmorefertileareas.Theseregionsturntootherfibresorlooktoimportfromproductiveregions.

Themoresuccessfulcountriesinvestinseedtechnologiesthathelptheircottoncropadapttoclimatechange.Someregions,suchasChina,focusonGMtechniques,whileothers,includingIndia,usehighly-specialisedplantbreeding.Submergence-resistantcottonisthenorminlow-lyingareas

The role of governmentGovernmentinterventionisheavyandpreoccupiedwithnarrowself-interest.CountriesandcompaniesjealouslyguardtheirIntellectualProperty(IP)againstseedtheft.Cropsinproducingregionsareoftenprotectedbythemilitary,ascottonisseenasakeystrategicasset,especiallyinwaterscarceregions.

TechnologyThekeytechnologiesusedinthecottonindustryaretheonesthatmaximiseyield.Thereisahighdegreeofacceptanceoftechnologicalinterventioningeneral.Seedpoliciesareoftennationalistic.GMiswidelyusedinmanyregionstoadapttoclimatechangeandwaterstress(butbannedinsomeregions).CountriesguardtheircottonseedIPjealously,butdespitethisseedtheftisrife.Cottoncoatingsreducetheneedforwashingandironing,andpeopleusewaterlesswashingmachines.Track-and-tracesupplychaintechnologiesworkinindividualregions.Thereis,therefore,alotofinvestmentintechnologiesdesignedtodeliveryieldimprovements.

ThankstoICTadvancesandregionalisedproduction,supplychainsareshortenedsocottonproductsarriveonthemarketswiftly.

End of lifeInmanyregions,cottonandresourcesareincorporatedbackintothesupplychainattheendoflife;however,insomecountriesitjustgetssenttolandfill.Inotherareas,cottonisrecycledandcombinedwithvirgincottonforbetterqualityre-usablecotton,orsoldtoregionsthatcannotproducetheirownforrecyclinganduseintheirmarkets.

The cotton industry structure is radically different, with national entities playing a dominant role in the industry. Global cotton traders’ monopolies have been broken up in favour of national and regional players. Global brands still operate, but with region-specific marketing and supply chains.

The scenarios: Patchwork Planet

These four scenarios were used by industry stakeholders to identify risks and opportunities facing the cotton industry to 2040, and priority areas for collaborative action.

DetailsofthepriorityareasforactionbeingaddressedthroughCotton2040aredescribedin“Cotton2040:CaseforAction”,availableonhttps://www.forumforthefuture.org/project/cotton-2040/overview

Forum for the FutureForumfortheFutureisanindependentnon-profitthatworksgloballywithbusiness,governmentandotherorganisationstosolvecomplexsustainabilitychallenges.Weaimtotransformthecriticalsystemsthatwealldependon,suchasfoodandenergy,tomakethemfitforthechallengesofthe21stcentury.Wehave19years’experienceinspiringnewthinking,buildingcreativepartnershipsanddevelopingpracticalinnovationstochangeourworld.Wesharewhatwelearnfromourworksothatotherscanbecomemoresustainable.

Systeminnovationisattheheartofourstrategy.Oneofourkeyapproachesiscreatinginnovationcoalitions,bringingtogethergroupstosolvebiggersustainabilitychallenges-includingthosethatworkacrosswholevaluechains.TheSustainableShippingInitiative(SSI),Tea2030,andtheProteinChallenge2040arejustsomeexamples.

Discoverourstoriesandwhatwe’velearnedaboutbuildingasustainableworldatwww.forumforthefuture.org,orfollowusonTwitter(@Forum4theFuture)andLinkedIn.

Get involved

C&A Foundation C&AFoundationisaprivateglobalfoundationthataddressesthesystemicchallengesoftheapparelindustry.Itisworkingtotransformtheapparelindustryintoafairandsustainableindustrythatrespectstherightsofworkers,improveslivelihoodsandconservestheenvironment.AffiliatedwiththeglobalclothingretailerC&A,thefoundationsupportsandactivelydrivesinitiativesthathelptransformthewaytheindustryworks.

Cotton 2040 offers a unique opportunity to the industry to address current and future challenges, so that the impact of its actions is more than the sum of its parts. All parts of the value chain need to be involved. If you are a part of the cotton sector, you have a role to play. Join us in the next phase in helping to create a more sustainable future for cotton.

Cotton 2040 is led by Forum for the Future, and made possible through the support of C&A Foundation. It is engaging widely with stakeholders throughout the cotton and apparel industry, including brands and retailers, standards, cotton producers, NGOs and more.

For more information or to get involved, contact Charlene Collison on c.collison@forumforthefuture.org

You can also find information on Cotton 2040 at: http://www.forumforthefuture.org/project/cotton-2040/overview

Cotton2040scenariowriters:CharleneCollison,IvanaGazibara,AlexaSchubert,JamesGoodman.Design:LuluKitololoStudio