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I recently wrote an article about LEGO, where I cover my passion for the classic bricks toy and how much I enjoyed them growing up. A passion that years later I extended to my oldest nephew. However,as my concern about plastic waste increased, my younger niece and nephews started getting more wooden toys.
Now, the reason I wrote about LEGO, might make for another turn of mindset for me: the toy giant announced that it will increasingly and rapidly move toward certified recycled resin as raw material in their products, aiming to have 30% of their resin purchases certified in 2024 (50% by 2026 and 100% by 2032).
The “certified” part of this exciting news it’s the key. In order to substantiate their claim of recycled plastics, LEGO will be implementing a chain of custody approach through the Mass Balance model in their supply chain. This initiative demonstrates how a robust chain of custody can support sustainability goals within complex value chains. But, what exactly is a chain of custody and how is it that they can prove the use circular or renewable nature of a LEGO brick? That’s what I’ll be aiming to cover in this piece.
Chain of Custody refers to the systematic documentation and verification of the custody, control and transfer of materials, products or data throughout a supply chain. It ensures traceability, integrity, and authenticity by meticulously recording each step from origin to final destination.
Chain of Custody plays a vital role in maintaining transparency, demonstrating compliance with legal and regulatory standards, and supporting ethical and sustainable practices.
It's no secret that in the global business environment, tracking the chain of custody is complex due to the number of trading partners and multi-party transactions involved in moving raw materials, components and final products. However, modern digital supply chains, which use a single chain of custody model, are simplifying the process and minimizing the risk of tampering, contamination or loss.
The benefits of implementing a robust chain of custody system are numerous:
The identity preservation model is a traceability system that ensures certified products maintain their unique identity from the production site to the final point of transformation or labeling. By keeping certified materials separate from others and rigorously documenting every step, this approach preserves the integrity and distinctive qualities of products, such as those in organic agriculture, ensuring they remain authentic and verifiable throughout their entire journey.
The segregation model ensures that certified products are kept separate from non-certified ones throughout the supply chain, allowing products to be mixed only if they come from certified sources adhering to the same standards. This approach maintains the integrity of certified materials while allowing blending from multiple certified sources, with strict documentation to verify their origins. Commonly used in industries like pharmaceuticals and food, this model helps prevent cross-contamination.
The mass balance model is a practical approach for industries where it’s difficult or too expensive to keep certified and non-certified materials completely separate. Unlike models that require strict separation, mass balance focuses on accurately tracking the flow of materials through volume reconciliation.
That means that certified and non-certified products can be physically mixed at any stage of the supply chain, but the quantities are carefully controlled to ensure that the volume of certified input matches the volume sold as certified output. This ensures that sustainability claims are supported by robust data, even if the certified content is not physically isolated.
Mass balance operates on different levels:
The degree of physical mixing and the point in the supply chain where segregation is lost can vary, affecting the level of certainty about the presence of certified content in the final product. However, the model’s focus on balancing input and output volumes ensures that certified claims are still reliable and transparent. This approach is especially valuable in industries like forestry, biofuels and recycling, where maintaining physical separation can be logistically challenging.
The book & claim model separates certified products from their sustainability claims, allowing certified and non-certified materials to flow freely through the supply chain. Sustainability certificates or credits are issued by an independent body at the start of the supply chain and can be bought and sold via trading platforms.
This model is used when directly sourcing certified products is difficult, as it allows companies to meet sustainability targets without physical traceability, although the end product contains no certified content or controlled equivalent under a chain of custody system.
Each chain of custody model has its own set of pros and cons. Traceability within the chain of custody is essential for advancing toward a more sustainable value chain. When selecting a model, you must consider the sustainability standards, certification types and the specific requirements that you need for your products.
As globalization advances, emerging technologies—such as blockchain and AI—are poised to enhance and streamline chain of custody systems. Blockchain, in particular, offers a powerful solution for improving the transparency and security of chain of custody records, something really important in today's business landscape.
Our digital platform, MARCO Track & Trace, leverages multiple chain of custody models to provide our clients with a comprehensive solution for tracking and verifying the flow of products throughout the supply chain. We’ve worked with Segregated, Mass Balanced and Book & Claim processes across many of our customers in capital intensive industries. Some of our case studies include:
Cepsa Case: MARCO Track & Trace enables Cepsa to implement a digital traceability system for tracking each batch of vegetable oil from its origin to its biodegradable production. The platform also automates bookkeeping and accurately determines the percentage of output derived from renewable and circular inputs.
SABIC Case: As a chemicals industry leader, SABIC has become the first in its sector to achieve batch-level traceability from waste to packaging for its TRUCIRCLE products using MARCO Track & Trace; it supports end-to-end digital traceability of circular feedstock in customer products.
Repsol Case: A client since 2018, Repsol extensively utilizes our digital traceability solutions across multiple business areas. One of those businesses includes the use of our digital ecosystems to trace low-carbon fuels such as HVO (Hydrotreated Vegetable Oil), as well as circular chemical products such as packaging.
By implementing MARCO's chain of custody system, our clients can:
At Finboot, we are dedicated to empowering businesses to foster trust, transparency and accountability.
Our goal is to help companies like LEGO to substantiate their ESG and sustainability credentials with evidence-backed data; ensuring that their targets are followed through and leveraging digital technologies to monetize their sustainability transformations. The mass balance model together with other chain of custody approaches are a core part of our offering. We need to enable scalable and auditable record-keeping for our customers to accelerate production of circular, low carbon and renewable products.
If you want to learn more about how to implement mass balance in your manufacturing processes, contact us and our team will reach out to you!
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