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Earthsight Report Highlights The Underbelly Of Brazil’s Cotton Industry

• By  Textile Excellence
• April 16, 2024

According to a recent report by UK based NGO Earthsight, popular items of H&M and Zara clothes and homeware are linked to large-scale illegal deforestation, land grabbing, violence and corruption in Brazil.

UK investigative NGO Earthsight claims to have spent over a year analysing satellite images, court rulings, shipment records and going undercover at global trade shows to trace nearly a million tonnes of tainted cotton from some of the most notorious estates in Brazil to clothing manufacturers in Asia that are suppliers of the world’s two largest fashion retailers.

Owned by some of Brazil’s richest families, the industrial-scale farms are among the country’s biggest cotton producers. They have a long record of court injunctions, corruption rulings and millions of dollars in fines related to clearances of around 100,000 hectares of Cerrado wilderness. Foreign investors include Crispin Odey, one of the biggest funders of the Brexit campaign, who has equated environmental infractions in the Cerrado to a “parking fine”. This vast region of dramatic plateaus and lush valleys covers a quarter of Brazil and is home to 5% of all the world’s species, including the giant anteater and giant armadillo.

Over half the Cerrado has been cleared for large-scale agriculture, mostly in recent decades. The destruction creates climate impacts equivalent to 50 million more cars on the road each year, the Brazilian government estimates. Hundreds of species now face extinction due to habitat loss. Each year, billions of litres of fresh water are diverted to cotton fields that are doused with 600 million litres of the most poisonous pesticides.

The situation is getting worse - deforestation rose by 43% last year. Almost all is illegal, cleared by a few mega-estates that represent just one percent of all rural properties. The Cerrado is being sacrificed to industrial farming in order to spare the Amazon, ecologists say.

The ‘smash and grab’ methods used by the biggest estates investigated by Earthsight are typical for export-oriented producers, Earthsight says. Brazil has increased cotton production dramatically in recent decades, almost all in the Cerrado, where it is now routinely grown in rotation with soy. By 2030, Brazil is expected to overtake the US as the world’s largest cotton exporter.

As cotton grew, traditional communities declined. A ruinous mix of corruption, greed, violence and impunity has led to the blatant theft of public lands and dispossession of local communities. It is rare for large-scale farms not to grab land, local campaigners in one region told Earthsight. People that have lived in harmony with the Cerrado for centuries are forced off their land, blocked from subsistence activities, subjected to surveillance, intimidation and cattle theft by estate gunmen, as well as shootings and other violent attacks on their leaders.

Earthsight tracked 816,000 tonnes of cotton from the investigated estates to 8 Asian firms that made nearly 250 million items of finished clothing and homeware over twelve months for global stores of H&M and/or Zara and Zara’s sister brands Bershka, Pull&Bear, among others. The goods are worth many hundreds of millions of Euros and include apparent best-sellers: items shown at the top of results page following generic searches on retailer websites. “We have failed, there is no doubt about it,” an H&M sustainability manager told the Swedish press.

All the tainted cotton traced by Earthsight was certified as sustainable by Better Cotton (BC), the estates told Earthsight. Annual company reports show that most H&M and Zara products are made with BC cotton, making them by far the world’s biggest BC users. Nearly half of all BC comes from Brazil, more than any other country. In September 2023, BC announced a 12-week investigation in response to Earthsight’s findings. Inditex this week criticised BC in a letter, shared with the press. The letter suggests Inditex has relied heavily on BC to monitor its supply chains, despite BC long being accused of greenwashing, secrecy and failing to protect human rights. BC and other such schemes appear to be useful scapegoats to deflect criticism from industries that trade on low cost raw materials, Earthsight said. BC updated its rules on 1 March 2024, but they remain riddled with holes, conflicts of interest and weak enforcement, Earthsight said. Under the new rules, cotton from land illegally deforested before 2020 can still be certified as sustainable by BC, even if the land was stolen from local communities, Earthsight said.

Earthsight director Sam Lawson said: “While we all know what soy and beef have done to Brazil’s forests, cotton’s impact has gone largely unnoticed. Yet the crop has boomed in recent decades and become an environmental disaster. If you have cotton clothes, towels or bed sheets from H&M or Zara, they may well be stained by the plundering of the Cerrado. These firms talk about good practice, social responsibility and certification schemes, they claim to invest in traceability and sustainability, but all this now looks about as fake as their highstreet window arrangements. It has become very clear that crimes related to the commodities we consume have to be addressed through regulation, not consumer choices. That means lawmakers in consumer countries should put in place strong laws with tough enforcement. In the meantime, shoppers should think twice before buying their next piece of cotton clothing.”

A number of laws to regulate supply chains are in force or soon will be. The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) should be finalised in April or May, but will only cover the largest firms. A new EU Deforestation Regulation forces firms to trace some raw materials back to production that must be deforestation-free and legal, but neglects cotton. The same blind spot afflicts regulatory efforts in the US and UK, which are also limited to illegal deforestation. Brazil’s PPCerrado plan to reduce deforestation in the Cerrado fails to address deforestation authorised by local governments, leaving the door open to unsustainable policies at that level. It should instead halt all large-scale deforestation, Earthsight said.

Commercial agriculture and logging are the biggest drivers of deforestation and forest degradation globally. In terms of pressure on land stemming from EU consumption, textiles are second only to consumption of food. Almost all of that pressure happens overseas, and almost all relates to the cultivation of cotton. The biggest culprits are the biggest consumer markets. The EU is the largest importer of clothing in the world, and the US is the second largest.

UK investigative NGO Earthsight claims to have spent over a year analysing satellite images, court rulings, shipment records and going undercover at global trade shows to trace nearly a million tonnes of tainted cotton from some of the most notorious estates in Brazil to clothing manufacturers in Asia that are suppliers of the world’s two largest fashion retailers.