Geelong, Australia

Fashion companies need to continue to escalate actions to address issues ranging from modern slavery to the exploitation of workers and unsustainable environmental practices with a report showing fashion companies in Australia and New Zealand scored an average of just 29 out of 100 in an ethical supply chain assessment.

Fashion industry report1

Workers in the garment industry. PICTURE: Supplied.

The ninth Ethical Fashion Report – which is compiled by Baptist World Aid in Australia in partnership with Tearfund New Zealand – assessed more than 580 fashion brands, owned by 120 companies, against some 18 indicators including whether companies know where their materials come from, how companies have responded to the issue of labour exploitation and how they are responding to climate change.

It found some glaring gaps remain with just 10 per cent of brands, for example, are able to show workers at factories in the final stage of the supply chain are paid a living wage while 40 per cent of companies didn’t know who supplies their raw materials and have no project to trace them and just 15 per cent have a climate target covering their full supply chain.

And for the first time, the report also included a specific focus on footwear companies, finding that they generally performed worse than clothing companies.

“We did find that footwear companies performed below the industry average – so footwear companies had a company average of 23 out of 100 [compared to 29 out of 100 for all companies],” said Sarah Knop, corporate advocacy lead at BWA. “And none of the footwear companies that we assessed were paying a living wage in their supply chain at any point…We also noted that no footwear companies had traced all their input suppliers and also that more than half of the footwear companies couldn’t provide the names and addresses for any of their raw material suppliers. 

“So there’s a significant lack in that process of being able to trace their supply chain but also then [in] the treatment of workers in their supply chain. We acknowledge that footwear is a more complex supply chain than clothing – when you look at something like a T-shirt, it’s often cotton, so one material, whereas a complex sneaker for example can have up to 60 components…But there is a real urgency for footwear companies to take a look at some of their clothing counterparts and really escalate the pace of change towards becoming more ethical and sustainable.”

This year’s report highlights “six spotlight issues” which include tracing materials beyond final-stage, remediation of labour exploitation, payment of living wages, support for worker voice and empowerment, use of sustainable fibres and commitment to climate action.

“They’re areas which we really want to call on fashion companies to apply their focus to but also we think that they’ll be really helpful issues for shoppers to understand…where all the companies, really, have some room to make up to get to that ideal supply chain performance.”

To help with transparency, the latest report also grades companies out of 100, having previous used grades of A to F. 

“In being able to see what companies score out of 100, we think it [gives] a really strong message to shoppers about just how far the industry as a whole has to go,” said Knop.

While the overall average score declined to 29.25 this year (down from 33.6 in 2021) – a fact which is attributed to the large number of new companies (27, including 15 footwear companies, representing 161 brands) included in the report compared to 2021, for companies that had been participating in the report process for two years or more, the average actually moved up from 32.5 to 34.9.

And there have been some companies which have seen some considerable increases in their scores. They include Forever New which rose 20.76 to 52, RM Williams which rose 20.69 points to 33, Rip Curl which rose 13.76 points to 52 and Kmart and Target Australia which rose 9.48 points to 56.

Top score in this years list was made by Mighty Good Basics with a score of 86 followed by Patagonia (68), AS COLOUR (66), Inditex (60) and Adidas (58).

As in previous years, a guide can be downloaded from the Baptist World Aid Australia website which shoppers can take with them as a reference when purchasing fashion items.

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But Knop says the report is about more than shopping.

“We want to be about good stewardship and that means good stewardship of the planet,” she said. “But also for people who work in the fashion industry – we really want to make sure that they’re being dignified in the work that they do. So whilst we really encourage people to assess their shopping habits and think about what they might do differently and use our research in order to inform some of their decision-making go forward, there’s lots of actions that shoppers can take as well to really become advocates for the world that they want to see.”

“The world isn’t operating the way that God intended – it’s not a world where all people can flourish – and so we want to encourage people to take action this year. So when people are on our website looking at brand scores, when they click on a brand they can also use our 'Speak out to brands' tool which is helpful tool that allows you to email the brand directly to tell them what you’d like to see them do better. You can also learn a lot more about ethical fashion through all the different resources we have available on our website that will help you with things like how to research a company that’s not included in our report – there are 600 brands included this year but we do have a focus on companies that earn $A50 million and over - so if you want to research a smaller company, there are tips for doing that.”

Knop said those behind the report also wanted people to speak to others about the issue of ethical fashion.

"When we all collaborate and lift our collective voice, we can have greater impact so talk to others about what you’ve learnt from using our Ethical Fashion Guide and even host a clothing swap which is not only a great way to share the message of ethical fashion but also a great way to make your wardrobe more sustainable by exchanging things that you no longer have a use for and updating your wardrobes through second-hand goods. So there are lots of things that you can do…”