In the world of sustainable supply chains, transparency and traceability are often used interchangeably, but they mean different things. The rise of due diligence regulations, such as Germany’s LkSG (still in effect despite announced repeal), the upcoming Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Deforestation Regulation (EUDR), is forcing companies to get clear on the distinction.

Despite their popularity, these terms are still commonly misunderstood in the context of supply chains. A brand might say, “We use QR codes on our product to show its journey, demonstrating transparency.” In reality, that’s better defined as traceability – if your suppliers aren’t publicly disclosed, you’re not transparent. Or you might see a statement like, “We list our suppliers publicly, showcasing traceability.” Great, that’s a perfect description of transparency, but not traceability, unless you can prove the movement of materials along the supply chain.

Transparency ≠ Traceability, but one enables the other.

In this post, we’ll explain the difference between these two terms and show how transparency serves as a necessary foundation for traceability. We’ll also use Open Supply Hub (focused on transparency) and FibreTrace (focused on traceability) as a case study to show how transparency and traceability tools can work together to bridge the gap.

Let’s start with definitions and walk through a real-world example.

Transparency is about the who and where: publicly disclosing the supply chain actors involved in making a product and including enough information to make this disclosure meaningful. 

What transparency is NOT

Before diving into how transparency works in practice, let’s clarify what transparency is not:

• Internal data sharing: Sharing supplier information only with direct partners, consultants, or internal teams isn’t transparency – that’s supply chain management. Real transparency requires public disclosure.
• Partial information: Sharing incomplete details – like a supplier name without an address, or an address without a facility name – offers little real value as it prevents stakeholders from actually identifying the production location. Without specific locations, civil society organizations can’t support remediation or on-site assessments, other brands can’t recognize shared suppliers for potential collaboration, and investors can’t evaluate geographic risks.
• Partner-only disclosure: If the information isn’t publicly accessible, it doesn’t enable the collaborative mapping that creates comprehensive pictures of supply chain networks, identifies shared suppliers, and uncovers opportunities for industry-wide sustainability initiatives.

When multiple actors within a supply chain transparently share information on their suppliers, partners, and stakeholders, it becomes easier for everyone to map the supply chain, creating a comprehensive picture of the network of relationships, dependencies, and potential risk points across all tiers. 

Stakeholders, from civil society to other brands, can understand not just individual facilities but how they connect to form the broader supply chain structure. This mapping also helps identify gaps in knowledge (like missing data for Tier 2 suppliers) and reveals opportunities for collaboration on sustainability initiatives. 

In practice, this means a company might publish the names and locations of its Tier 1, 2, and 3 suppliers on Open Supply Hub (OS Hub).

Imagine an apparel company that produces cotton T-shirts.

• Tier 1 suppliers in the apparel sector are typically garment factories: the facilities that cut, sew, and finish the T-shirts.
• Tier 2 suppliers are often the textile mills: where raw cotton is spun into yarn and woven or knit into fabric.
• Tier 3 includes the ginners and raw material processors: the sites where cotton is separated from its seeds and prepared for spinning.
• Some companies go even deeper to Tier 4, which would include the cotton farms or cooperatives themselves.

By disclosing this information, the company provides visibility into who is in the supply chain and where they are located. 

But mapping the supply chain alone does not tell us what happens to the cotton as it moves from farm to finished product.

That’s where traceability comes in.

Traceability is about the how and when: tracking the journey of a specific material or product through the supply chain. In our example, the apparel company would not only know who its suppliers are, but also be able to trace the physical flow of the cotton:

• When the cotton is harvested at Farm A, a batch number or digital marker is created.
• At Gin B, that batch is processed and passed to Mill C, where it is spun into yarn.
• The yarn is then sent to Factory D, where it’s sewn into T-shirts.

At each step, the cotton changes hands, changes form, and may be blended with other batches. Traceability captures that chain of custody through documentation, barcodes, digital systems, or physical tracers, enabling the brand to prove, for instance, that a specific T-shirt was made from cotton grown at Farm A.

While transparency provides a static map of who is involved, traceability creates a dynamic path of how materials move through them.

Both are essential — but one must come first.

You can’t trace what you haven’t mapped, and you can’t map effectively without transparency.

Can a company trace the movement of products and materials across complex supply chains if those supply chains are siloed, fragmented, and opaque? Simply put, the answer is no.

Traceability becomes exponentially harder when a company lacks visibility into its own supply chain. If you don’t know who your suppliers are or how they connect to one another, it becomes nearly impossible to track how raw materials move through them. The exchange of data, purchase orders, shipping documents, and batch numbers breaks down without a shared understanding of who the facilities are and how they relate to each other. 

This is where transparency and data interoperability become critical. Transparency provides a shared foundational knowledge of who the supply chain actors are, and interoperability allows systems and organizations to work together by using common data formats and identifiers.

In short:
You can’t trace what you haven’t mapped.
Brands must first achieve transparency — knowing and publicly disclosing their supply chain — before they can build systems that enable traceability. While companies could theoretically map their own supply chain and build traceability systems behind closed doors, public disclosure makes supply chain mapping significantly more effective.

Here’s how transparency lays the foundation, using Open Supply Hub and its OS IDs as a case study:

• Data Interoperability
  Transparency platforms like OS Hub help brands identify and connect supply chain actors using a consistent, open format. When brands use shared facility identifiers, it reduces confusion and duplication across traceability systems. For example, if both a brand and a traceability platform like FibreTrace recognize the same OS ID for “Mill C,” data can flow between platforms without costly integration work.
• Network Effect
  Public transparency drives alignment. As more brands publish their supplier data using common standards (e.g. OS IDs, public facility lists), it becomes easier for other actors — from traceability platforms to watchdog groups — to plug into that ecosystem. This network effect lowers the barrier for smaller brands or new initiatives to build traceability capabilities without starting from scratch.
• Data Standardization
  OS Hub assigns unique IDs to each facility and maintains a shared, structured record of names, addresses, and relationships. These standardized data points allow traceability technologies to tag and track products at each step without confusion over facility names or locations. For example, FibreTrace can map traceability data directly to OS IDs, creating a seamless link between public transparency and private traceability records.

In this way, transparency is not just a parallel concept to traceability, it is a prerequisite. Traceability systems need clean, standardized, and connected data to function — and transparency is what delivers it.

Physical traceability: Verifying the data behind transparency

Once transparency establishes the who and where of supply chains, physical traceability technologies can verify the how and when of material movement. But without that transparent foundation, even the most sophisticated traceability systems struggle to function effectively.

Let’s take FibreTrace®, for example. They have a patented luminescent pigment technology that embeds directly into raw fibers during manufacturing. This pigment creates a unique, scannable identifier that remains with the material throughout its entire supply chain journey.

The system works by using specialized scanning technology to detect and verify the luminescent pigment at any point in the process. This provides immediate, reliable confirmation of fiber authenticity and origin, creating a tamper-proof link between the physical product and its digital records.

However, this physical verification is only as effective as the transparency infrastructure supporting it. When companies need to track, verify, and report on material movement and processing, the pigment ensures that digital records accurately reflect the true physical journey of each item. But those digital records must flow between known, mapped suppliers using standardized identifiers — exactly what transparency platforms like OS Hub provide.

The combination of transparency and physical traceability creates a more robust system. Different stakeholders can share and verify information across various platforms while having confidence that the data corresponds to both the actual material and the correctly identified facilities processing it.

As Danielle Statham, Cofounder at FibreTrace, explains, this interdependence between transparency and traceability is crucial for supply chain integrity:

“Without physical traceability, that data that underpins transparency could be confused or misinterpreted, undermining the integrity of the transparency process. Traceability isn’t just about tracking the movement of materials; it’s about ensuring that the data supporting those movements is accurate, consistent, and verifiable across various platforms and stakeholders.

When data is shared at every step of the supply chain, it becomes consistent, traceable, and easy to validate. More so, when traceability and transparency combine, it fosters trust.”

Start with transparency, build towards traceability

Transparency is about naming and showing your supply chain, identifying who is involved and where they operate. Traceability is about tracking movement, following materials as they flow through that chain.

Both are essential, but transparency must come first.

If you are a brand, supplier, or multi-stakeholder initiative looking to improve your data systems, meet upcoming regulatory demands, or build trust with your customers, start by mapping your supply chain.

We invite you to:

• Explore the OS Hub open database: https://opensupplyhub.org
• Learn more about FibreTrace and their traceability technology: https://fibretrace.io
• Get started with transparency today — disclosing your supplier list on OS Hub is easy! You can find the instructions here.

Have feedback or want to share how your organization is approaching transparency and traceability? We’d love to hear from you.

Let’s build the future of responsible supply chains — together.

OS Hub is a non-profit platform that relies on philanthropic support to sustain the world’s most complete, open and accessible supply chain map. Join us in powering the transition to safe and sustainable supply chains by making a donation today. 

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