The overall aim of this study is to trace the current supply chain of the commodity cotton in Ethiopia. Furthermore, a special focus of the study is placed on the local impact and role of certification and due diligence schemes. In the first section, the study elaborates on fundamentals on cotton regarding its life-cycle and cultivation characteristics such as seed germination, growth, outputs, quality and processing. This is followed by insights into the economic embedding of the Ethiopian cotton value chain into the world cotton markets. In the following section various schemes are analysed and evaluated according to their environmental and social ambition levels. Against this backdrop, the focus on the current Ethiopian cotton value chain is illustrated by the results of intensive field research conducted between 16 and 28 July 2018 in Addis Abeba, the Gamo Gofa Region (Southern Ethiopia) and in the Amhara Region (North-Western Ethiopia). Especially, the role of the first cotton cooperative certified according to the EU organic regulation (Organic Crop Producer Association) near Arba Minch was examined in detail. By the prominent combination of the educational approach of “Farmer Field Schools” (FFS) together with the establishment of a strong small-holder cotton cooperative this project will become a blueprint of best practice for the development of Ethiopia’s cotton sector in the future. Especially, the possibility to significantly increase yields and sales prices at the smallholder’s level in combination with a complete abandonment of pesticides is remarkable. The study is complemented by information on process steps further down the cotton value chain and includes the documentation of good practice downstream company examples.