Goat to coat

Last updated: 4 March 2022

By Peter Kujawinski

At this point in the world's sustainability journey, we’ve picked the low-hanging fruit. Our light bulbs are more efficient, we use less paper, and we recycle a widening variety of products. Many of us drive hybrid or electric vehicles. Like individual consumers, businesses are on the same journey, having notched initial successes but also cognisant that there is a long road ahead. Consumers and businesses alike realise that the next steps in sustainability may not be as simple as the first ones, though arguably they will have a more profound and lasting impact.

Take, for example, an initiative to reimagine the supply of an ever-popular gift like the cashmere sweater. An ambitious project in Mongolia to make cashmere more sustainable has been running for several years, and includes organisations as varied as mining giant Rio Tinto, luxury goods maker Kering, the nonprofit Wildlife Conservation Society (WCS), Stanford University, and even NASA. The project highlights the challenges and opportunities of taking big sustainable steps. A Stanford article succinctly describes its potential: “[the project] has implications far beyond Mongolia, as global actors in business, development finance and civil society are engaging actively to innovate together, learn what is working, and then scale.”

The story of the South Gobi Cashmere Project begins in the desert of southern Mongolia. It is a unique ecosystem of grasslands and rock-strewn terrain, a place of dinosaur fossils, snow leopards and Bactrian camels. Summers are hot, but in the winter, temperatures can plummet to -40 Celsius. To visitors and inhabitants alike, the distinguishing feature of the land is its limitless sky and horizon. Amar Batkhuu worked for Rio Tinto at its Oyu Tolgoi copper mine in Mongolia. Of living and working in the Gobi Desert, he said, “You get this feeling that every time that you look at the horizon, it's so far away. It’s not blocked by forests or mountains. It gives this feeling of vastness.”

These vast plains of Mongolia’s South Gobi Desert are at the centre of the country’s cashmere production. Goats of different breeds roam in herds across the desert grasslands and every spring, the goats are sheared for their wool. Only the fine undercoat is used to make cashmere.

It is truly an incredible material: several times warmer than sheep’s wool, as well as softer and lighter. However, it is also much more difficult to procure. One sheep produces enough wool in a year to make 4 sweaters. To produce 4 cashmere sweaters in a year, it would take anywhere from 16 to 32 goats. This discrepancy lies at the core of the stubbornly difficult quest to make cashmere sustainable.

For centuries, production of cashmere wool had its own equilibrium. Mongolian herders included goats as part of a diverse herd of animals that also included Bactrian camels and horses. These domesticated animals were sustained on the vast lands of Mongolia, and their numbers never overwhelmed the ecosystem. Even natural predators, such as the snow leopard, existed and thrived in this equilibrium.

A generation ago, the balance was thrown off when global demand for cashmere skyrocketed. Dr Helen Crowley, who worked separately for the WCS and Kering on the South Gobi project, said the general estimate is that to meet this demand Mongolian herders quadrupled the number of goats they owned. In an arid rangeland such as the Gobi Desert, the addition of so many more goats degraded the land, negatively impacted wildlife and threw the ecosystem into disarray.

The “Goat to Coat” project, as it is informally known, was set up to not only repair ecological damage, but also to preserve the livelihood of Mongolian herders and to protect the wild animals of the region. Key partners in this project were WCS, the world’s second biggest mining company Rio Tinto, its partner Oyu Tolgoi, a world-class Mongolian copper-gold mine, as well as French-based Kering, the company behind luxury brands such as Gucci, Saint Laurent, Balenciaga and Bottega Veneta.

WCS saw the project as a way to provide technical support to communities of the South Gobi regarding animal husbandry and wildlife protection. The unique and fragile ecosystem of the Gobi Desert is home to such diverse species as the Asiatic wild ass, goitered gazelle, ibex, argali and snow leopard. Rio Tinto’s role stems from its presence in the southern Gobi as partial owner and operator of Oyu Tolgoi. This mine, one of the largest of its type in the world, has committed to delivering net gain on priority biodiversity features of the region such as khulan, goitered gazelle and the rangeland.

Broadly speaking, Oyu Tolgoi has agreed to leave the environment in the south Gobi in better condition than when it arrived. One of the programs that help fulfill this promise is the cashmere project. When Oyu Tolgoi opened, large parts of the South Gobi rangeland were already at risk of degradation. The project is attempting to reverse this degradation while also ensuring that herders’ livelihoods are not negatively impacted.

To reconcile these disparate objectives, WCS and Rio Tinto worked closely with luxury purveyor Kering. It proved to be a crucial partnership for one key reason. WCS and Rio Tinto sat at the beginning of the cashmere supply chain, while Kering sat at the end.

Stuart Anstee, Program Director of the South Gobi Cashmere project, said that when the project started, the goal was to take a cautious approach to the supply chain, taking care not to disrupt it. But after “going through a very, very steep and very, very informative learning curve,” Stuart and others realised that the cashmere supply chain needed disruption. It was the only way, he said, to ensure that herders would be able to profit more from the cashmere their goats produced.

At the beginning of the project, Mongolian herders were price-takers, meaning that they sold their raw cashmere wool for whatever price they could get. Stuart estimates that if a dollar represented the value of cashmere, herders received only 5 cents for their efforts. Receiving such a small percentage naturally incentivised herders to produce as much cashmere as possible, which meant raising more goats and increasing pressure on the Gobi rangelands. The cashmere project allowed herders to move further up the supply chain.

Even relatively modest steps such as the herders taking on the separation of the fine cashmere undercoat from the coarse top coat – the very first step in preparing cashmere for sale – had an enormous impact. Stuart estimates that herders doing this work, called dehairing, meant they could keep 50 cents out of every cashmere dollar instead of 5 cents. If herders could keep more of the money and become price-makers, they would no longer need ever larger herds of goats.

It’s a simple idea but difficult to implement in the sprawling, transnational cashmere market, as Stuart and others involved in the project can attest to. It meant setting up herder cooperatives and working with supply chains to buy directly from these cooperatives rather than long-established intermediaries. This is where Kering stepped in, by promising to buy cashmere from herders at a premium. In return, Kering demonstrated their commitment to sustainability while also giving consumers more detail on the origin of their clothes.