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The 2019 Ethical Fashion Report THE TRUTH BEHIND THE BARCODE
THE 2019 ETHICAL FASHION REPORT
THE TRUTH BEHIND THE BARCODE
Date: April 2019
Project Leads: Libby Sanders, Jasmin Mawson
Lead Researchers: Jessica Tatzenko, Claire Hart, Annie Hollister-Jones
Researcher Support: Meredith Ryland, Luke Medic, Emily Taylor
Behind the Barcode is a project of Baptist World Aid Australia.
New Zealand headquartered companies researched in partnership
with Tearfund New Zealand.
www.behindthebarcode.org.au
Front cover photo: © Baptist World Aid Australia
Report Design: Susanne Geppert
Infographics (pp 10–11): Cadence Media
2
CONTENTS
1. Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3. Industry Influences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5. Traceability and Transparency. . . . . . . . . . . . . . . . . . . . . 28
6. Auditing and Supplier Relationships.. . . . . . . . . . . . 33 Appendices
7. Worker Empowerment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Statements from non-responsive brands 90
Letter from auditor 95
8. Environmental Management.. . . . . . . . . . . . . . . . . . . . . . . 40
Sources 96
9. Brand Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 About Baptist World Aid Australia 97
10. Survey Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Acknowledgements 98
3
1
Executive Summary
This section outlines the research aim
and scope; data collection and findings;
and overall results of all companies.
4
management
Environmental
empowerment
Worker
relationships
supplier
Auditing and
Traceability
Trancparency and
Policies
OVERALL GRADE
D F D– D– B– Abercrombie & Fitch* D–
A B– B+ A+ A+ adidas A
A– D– B– A– A+ ALDI Stores B–
F F F F F Ally Fashion* F
F C– C– D+ A+ Anthea Crawford* C
Overall Grades: A– M
B B– A A+ A+ APG & Co. A–
INTRODUCTION
C D– C– B A+ Arcadia Group C+
A– B– A– A+ A+ AS Colour A–
B D– C B A ASICS C
B C– B A– A+ ASOS B
F F F F F Baby City* F
F F D– C– A– Bardot D+
EXECUTIVE SUMMARY
C+ D D+ B+ A+ Barkers Clothing* C+
F F F F F Bec and Bridge* F
F D– C– C– A– Ben Sherman Australia D+
consecutive report on labour rights and
C+ D– C C+ A+ Best & Less C
based on the strength of their systems to
fashion industry. The 2019 Ethical Fashion
F F D D+ A– Betts Group D
Report grades 130 companies from A+ to F,
environmental management systems in the
C– D+ C B+ A+ Big W B–
F F F F F Bloch* F
Baptist World Aid is pleased to deliver its sixth
labour, and exploitation in their supply chains.
B+ D C+ C+ A+ Blue Illusion C+
mitigate against the risks of forced labour, child
C– D C C– A– Boardriders C–
D D+ C+ B+ A+ Boden C+
C D– C C– A– Boohoo C–
D D D+ C+ A+ Brand Collective (Apparel) C
D C– C B A+ Brand Collective (Footwear) C+
F F F F F Camilla and Marc* F
D+ D C A– A+ Canterbury NZ C+
D C+ A– A A+ City Chic Collective B+
F F D C+ A– Coles* D+
B+ B A– A+ A+ Cotton On Group A–
B+ B A A A+ Country Road Group A–
F D+ C– D A Cue C–
B– C– B B+ A+ David Jones B
F F F F B+ Decjuba* D–
C– D C+ C+ A+ Designworks C+
A+ A+ A– A A+ Etiko A+
F F D D+ A Ezibuy D+
C+ C– C– A– A+ Factory X B–
environmental management.
F F F F B Farmers* F
D F D D A– Fast Future Brands D
D F F F C Forever 21* D–
B+ C– C+ A– A+ Forever New B
A+ A+ A+ A+ A+ Freeset T–Shirts A+
D– D– D C A Fruit of the Loom* D+
A– D+ C+ A A+ Gap Inc. B
F F F F A+ Gazal* D–
B+ D+ B B+ A+ General Pants Group B
For the 43 million workers in the Asia Pacific1
A– C+ A A A+ Gildan Activewear A–
shedding light on the global fashion industry’s
assessment criteria. In 2019, 75% of companies
performance in the arenas of labour rights and
Excitingly, in addition to its traditional focus on
new environmental management metrics in the
B+ C– C A– A+ Gorman B
A+ C– B– A– A+ H&M B+
region, and for millions of others across the world,
labour rights, this year’s research also incorporates
assessed actively engaged in the research process,
B+ C+ B A– A+ Hallenstein Glasson Holdings B+
A+ B+ A+ A A+ Hanesbrands A
F F F F F Hot Springs* F
D– D– C+ B– A+ House of Quirky C
D+ D C– A A+ Huffer B–
B D C– B+ A+ Hugo Boss Group C+
C– F D C A– Hunting & Fishing NZ D+
A+ A– A+ A+ A+ Icebreaker A+
A+ B+ A A A+ Inditex A
A+ B+ B B+ A+ Industrie A–
communities.
A C B+ A– A+ Jeanswest B+
C F D+ C+ A+ JETS C
D+ D+ B– C+ A+ Just Group C+
F D– D+ C A+ K&K C–
B– C– B B– A+ Karen Walker* B
D F D– C– A+ Kate Sylvester* D+
B+ B+ A– A+ A+ Kathmandu A
C– C– B+ A A+ Kmart Australia B+
B+ B– A– A– A+ Kookai A–
*=
A+ A– A A+ A+ Kowtow A+
A– D+ B+ B+ A+ L Brands B
D+ F D+ C– A+ Lacoste C–
A+ D– B– A– A+ Levi Strauss & Co.* B
is a source of exploitation for millions.
A+ A+ B+ A+ A+ Liminal Apparel A+
F C– B– B– A+ Lorna Jane C+
employer. It also spurs economic growth,
F F F F B– Lowes* F
to improving the lives of workers and their
A– B– A+ A A+ Lululemon Athletica A–
C+ D+ B– B A+ Macpac B–
training, and delivers crucial foreign exchange.
A+ D+ C A+ A+ Marks & Spencer B+
At the same time, however, the fashion industry
the global fashion industry remains a significant
All of these factors can, and often do, contribute
F D C B A+ Max* C
generates tax revenue, provides valuable skills and
F F F F F Merric Apparel NZ* F
non-responsive companies
5
EXECUTIVE SUMMARY
INTRODUCTION
For the majority of workers in the fashion industry, For six years, this research has assessed healthy. Correspondingly, it is the workers in the
wages are so low that it leaves them, and their companies across the globe on the strength of fashion supply chain that most acutely feel the
families, trapped in the cycle of poverty. Beyond their labour rights management systems. In the detrimental effects of poor environmental
this, fashion production throughout the Asia 2018 Ethical Fashion Report, we acknowledged management. This is the first year that the Ethical
Pacific is marred by the prevalence of slavery and that a “truly ethical” company not only ensures Fashion Report will assess companies on their
child labour. In addition, whilst safety standards that its supply chain empowers workers and pays environmental management systems, alongside
have improved, fire safety, structural defects within them a living wage, it also understands its impact their labour rights management systems, in
factories, and unsafe working conditions remain on the environment and manages its footprint to consideration of their final grade.
reasons for continued concern. keep waterways, the earth, and the atmosphere
Overall Grades: M– Z *= non-responsive companies
A+
A+
D+
C+
C+
C+
C+
C+
B+
B+
B+
D–
D–
A–
A–
A–
C–
C–
C–
C–
B–
B–
B–
B–
B–
B–
OVERALL GRADE
A
A
D
D
D
C
C
C
C
B
B
B
B
B
B
F
F
F
F
F
F
F
F
Pavement United Brands*
Voyager Distributing Co.*
Simon de Winter Group
Munro Footwear Group
The Warehouse Group
Retail Apparel Group
Mighty Good Group
The Baby Factory*
Workwear Group
3 Wise Men Ltd.*
Nudie Jeans Co.
Target Australia
The PAS Group
Trelise Cooper*
Nobody Denim
Outland Denim
These 130 companies represent
Wish Designs*
Seed Heritage
Ralph Lauren*
Oroton Group
T&T Fashions*
Sussan Group
Ruby Apparel
Noni B Group
Rodd & Gunn
Zimmermann
R.M. Williams
New Balance
Swanndri NZ
Nature Baby
PVH Corp.*
Tree of Life
The Iconic*
Patagonia
480 brands. To check brand
WORLD*
Showpo*
VF Corp.
Tigerlily*
UNIQLO
Rip Curl
Seafolly
Postie+
RREPP
Oxford
Pagani
Puma
Myer
grades, go to the brand index
Next
Nike
on page 45 or online at
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
A+
www.behindthebarcode.org.au
B+
A–
A–
C–
Policies
A
A
A
A
A
A
A
F
F
F
F
F
F
F
Trancparency and
A+
A+
A+
A+
A+
D+
D+
C+
C+
C+
B+
B+
D–
A–
A–
A–
A–
A–
A–
A–
A–
C–
B–
B–
B–
A
A
A
A
D
D
D
C
C
C
C
B
B
B
B
B
F
F
F
F
F
F
F
F
Traceability
Auditing and
A+
D+
D+
D+
D+
C+
C+
C+
B+
B+
B+
B+
B+
B+
D–
A–
C–
C–
C–
C–
C–
B–
B–
B–
B–
supplier
A
D
D
C
C
C
B
B
B
B
B
B
B
B
F
F
F
F
F
F
F
F
F
F
relationships
Worker
A+
A+
D+
D+
D+
D+
D+
D+
D+
D+
D+
C+
C+
B+
B+
D–
D–
D–
D–
D–
D–
D–
D–
C–
C–
B–
B–
B–
D
D
D
D
B
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
empowerment F
Environmental
A+
A+
A+
A+
A+
A+
A+
A+
D+
D+
D+
D+
C+
C+
B+
B+
D–
A–
C–
C–
C–
B–
B–
A
A
A
D
D
D
D
D
D
C
B
B
F
F
F
F
F
F
F
F
F
F
F
F
F
F
management
6
EXECUTIVE SUMMARY
INDUSTRY PROGRESS
The annual nature of this research enables us to track the
© Solidarity Center via https://flic.kr/p/Lcxknw
progress in ethical sourcing, made by the fashion industry.
Since last year, improvements have been made across the
industry in 79% of the areas assessed. Most noteworthy
areas of improvement in 2019 are:
Gender inequality 61% of companies (an increase of
22%) have created policies addressing gender inequality
in their supply chain, including the introduction of
strategies addressing discrimination faced by women.
Responsible purchasing practices 45% of companies
(an increase of 18%) have introduced policies addressing
responsible purchasing practices, with an aim to improve
working conditions.
Child and forced labour 35% of companies (an increase
of 17%) have robust remediation plans to redress child or
forced labour if it is found in their supply chain.
Manufacturing Restrictive Substance List (MRSL)
35% of companies (an increase of 14%) have a
comprehensive MRSL that they test against to ensure
workers are not exposed to hazardous chemicals with
dire environmental impacts.
An important part of the annual reporting process is
to give companies the opportunity to report on the
improvements they have made, which encourages
continual improvement across the industry. Of the
companies that were assessed by both the 2018 and
2019 Ethical Fashion Reports, 38% improved their overall
grade. The area showing the highest improvement in
2019 is Auditing and Supplier Relationships, followed
by Environmental Management (which was assessed
in 2018, but not included in the grading until 2019). Workers with Bangladesh Independent Garment Workers Union.
7
EXECUTIVE SUMMARY
INDUSTRY CHALLENGES
Despite the significant progress we’ve less visibility, comes greater risk. The prominence most companies seeing value in the process of
seen across the industry in the last six of forced and child labour is well documented at being benchmarked and gaining feedback.
these earlier stages of production.2 Several companies with no publicly available
years, serious concerns remain that
information regarding their ethical sourcing
need addressing. Transparency practices have chosen not to engage with the
Investment in transparency demonstrates a research process, and so receive F grades in the
Traceability company’s willingness to be accountable to 2019 Ethical Fashion Report. Without making
A company’s investment in traceability and its consumers, civil society, and workers; and makes information known, it becomes impossible for
knowledge of suppliers remains a key pillar of it easier for these groups to collaborate to ensure the public to know if these companies are doing
a strong labour rights management system. that the rights of workers are upheld. There are anything to combat exploitation in their supply
If companies don’t know (or don’t care) who many examples of corporate transparency around chains. A number of companies in this Report were
their suppliers are, then there’s virtually no way supply chain practices, but one of the most non-responsive, but still scored reasonable grades,
of ensuring that the workers who make their significant examples would be the publication as high as a B, due to the amount of publicly
products aren’t being exploited. It is encouraging of a list of suppliers, that includes supplier available information they published. For more
then, that this continues to be one of the most business names and addresses. The 2019 Ethical information about the research process and non-
significant areas of improvement for the industry Fashion Report has found that 37% of companies responsive companies, refer to the methodology
— since Baptist World Aid began publishing this have published a complete list of all final stage (page 12). Non-responsive companies were also
research in 2013, there has been a 32% increase in suppliers, increasing to 50% when including given the opportunity to provide a statement
companies who are tracing their inputs suppliers companies that have published information about about why they chose not to engage with this
and a 31% increase in companies who are tracing at least some suppliers. research. These statements are included on
their raw materials supplier. Despite the percentage of companies publishing page 90.
Notwithstanding these improvements, traceability full supplier lists having more than doubled since But transparency is no longer an expectation only
remains a significant challenge across the industry. we began this research in 2013, transparency driven by consumers, this expectation has also
While 69% of companies could demonstrate remains an ongoing challenge in the industry. Low been legislated in a number of countries. The USA,
tracing all final stage suppliers, only 18% have transparency is one of the biggest determinants France, the UK, and, now, Australia (through the
traced all inputs suppliers, and just 8% have traced for the receipt of a low grade, because companies introduction of a Commonwealth Modern Slavery
all raw material suppliers. Although the majority of are graded based on a combination of publicly Act) all require companies to publish details of the
companies have begun tracing suppliers at these available information and any information they are systems they have in place to ensure that workers
deeper stages of their supply chain, it is evident willing to disclose to our researchers. aren’t being enslaved. You can read more about
that many still have no knowledge of where their As mentioned previously, 75% of companies chose the introduction of modern slavery legislation in
inputs and raw materials are being sourced. With to engage with the research process this year, with Australia on page 18.
8
EXECUTIVE SUMMARY
INDUSTRY CHALLENGES
Living wage Environmental management Of these areas of concern, water use is one of the
A living wage is a wage that is sufficient for The environmental impact of the fashion industry most substantial issues. Up to 20,000 litres of
workers to be able to afford the basics (food, water, is significant with the apparel industry accounting water is needed to produce 1kg of cotton — with
healthcare, clothing, electricity, and education) for 10% of global emissions.4 Up to 20,000 litres it taking up to 2,700 litres of water to produce a
for themselves and their dependants. Yet most of water is needed to produce 1 kg of cotton — single cotton T-shirt. We found that just 12% of
garment sector workers receive wages well below with it taking up to 2,700 litres to produce the companies were collecting and benchmarking
this figure. It comes as no surprise, then, that low cotton needed to make a single T-shirt.5 Globally, water use data from all of their water intensive
wages are among the chief concerns for workers.3 humans are consuming 800 billion new pieces of facilities. When it comes to wastewater, again, just
clothing per year, 400% more than we consumed 12% of companies are monitoring the wastewater
The benefits of a living wage are substantial. In fact,
two decades ago. Australia is the second largest from all wet-processing facilities to ensure it is not
payment of a living wage could transform the lives
consumer of new textiles after the US, averaging environmentally hazardous.
of millions by allowing people to lift themselves out
of poverty and, at the same time, drive economic 27 kg of new textiles per year.6 Even more Positively, an increased number of companies
growth within communities and nations. However, concerningly, Australians are currently disposing are investing in more sustainable fibres. Just
it remains one of the most poorly assessed areas of 6,000 kg of fashion and textile waste every ten over a third of companies have assessed the
of our research. minutes, with the majority of this going to landfill.7 environmental impact of the fibres they use and
It is the poor and vulnerable who feel the impact are investing in more sustainable fibres in their
Questions around living wage make up a significant of this environmental damage most acutely, with product design and production as a result.
portion of the Worker Empowerment section of the effects of landfill, water pollution and poor
this research. Worker Empowerment is 2019 Ethical chemical management impacting on the health More information about the fashion industry’s
Fashion Report’s lowest scoring section, with a and wellbeing of workers throughout the apparel environmental impact can be found on page 22.
median grade of D. Just 5% of companies could supply chain.
demonstrate that they were paying a living wage
to all workers at their final stage of production. This year, for the first time, the Ethical Fashion
Report assesses the effort of companies to
While the industry still has a great deal of work mitigate their environmental impact. 11 questions
to do to in the area of living wage, small steps are were asked in order to measure a company’s
being taken. In 2019, 48% of companies assessed impacts on climate, chemical management
reported that they had started to develop a living practices, water usage, use of sustainable fibres,
wage methodology and 24% of companies had provision of take-back and repair programs, and,
published a commitment to pay a living wage. finally, whether had completed an environmental
For more information on the fashion industry’s impact assessment.
approach to tackling the continuing issue of living
wage, see page 19.
9
2019 at 38%
a glance of Companies saw an
improvement in their Grade
from the 2018 Report
130 Companies
assessed
some of the biggest gains
C+ Median
grade
B C C- D 22% 17% 15%
A+ Traceability & Auditing &
Environmental
Worker
Empowerment
Policies Management
Transparency Supplier relationships
7
Companies
received A+
17
Companies
received F
more
Companies
are ready to
address and
Remediate
Child and
more
Companies
are investing
in Responsible
Purchasing
Practices
more
companies
are investing
in Gender
Equality within
the supply
Forced Labour chain
10There have been many
improvement in 2019, Changes in the
such as... industry through
the years
61%
of Companies are investing
in using sustainable fibres
...but despite the progress, 49% 81%
significant issues remain:
17% 48%
5%
of Companies can
2013 2019 2013 2019
demonstrate paying a living Companies working to Companies working
wage to all workers at Final trace where their raw to trace where their
Stage facilities materials come from fabrics come from
18% 37%
From 2013 to 2019 the percentage of
companies publishing full direct
supplier lists has increased2
Methodology
This section outlines the aims and scope of our
research, the process of data collection and
evaluation, and our company grading system.
12METHODOLOGY
The 2019 Ethical Fashion Report provides
a picture of ethical sourcing practices in the Statement on Non-Responsive Companies
fashion industry as a resource for consumers,
Companies that are non-responsive, along brands are investing sufficiently to mitigate
corporations, investors, and policymakers. with those that do not provide any substantive these risks.
information, are indicated in the Report Companies may prefer to disclose their supply
and Guide with an asterisk (*) next to their chain management practices publicly, instead
This research seeks to empower consumers
name. These companies are also given the of responding to our survey (e.g. they might
to make more informed and ethical choices in
opportunity to provide a short statement as be surveyed by multiple research projects or
purchasing fashion and footwear and provides
to why they chose not to respond, found on they might prefer a single public disclosure,
insight into supply chain governance for
page 90 of this report. rather than disclosing through the survey).
investors. It also aims to assist companies with
benchmarking and learnings, as well as identify We acknowledge that many of the non- By assessing non-responsive companies on
issues for policymakers to address. By presenting responsive brands may be doing more to publicly available information we can give
the performance of companies (relative to one improve their ethical sourcing that we have due credit to these efforts. In the history of
another) in an A+ to F grading system which is been able to assess them on. However, if our research, non-responsive companies
updated on an annual basis, individual companies, brands do not disclose, or are unwilling to have received a wide range of grades based
and the wider industry, are encouraged to engage disclose, what they are doing to ensure that on their publicly available information. In the
in continuous improvement with respect to their workers are not exploited in their supply 2019 Ethical Fashion Report non-responsive
ethical sourcing practices. chains, then it becomes almost impossible for companies received grades ranging from a B
consumers and the public to know if these to an F.
We recognise the fashion industry’s potential for
positive impact around the world. The ultimate
goal of this project is to work collaboratively
alongside companies in the fashion industry
research considers five broad themes of social environment. In order to ensure that the research
to contribute to ending worker exploitation,
responsibility and environmental impact: policies, remains the fashion industry benchmark when
alleviating poverty, and building environmental
traceability and transparency, auditing and it comes to ethical and sustainable sourcing
sustainability throughout the fashion industry.
supplier relationships, worker empowerment, and environmental metrics were developed in 2018.
environmental management (outlined on page 15). These metrics were initially weighted at 0%, to
Scope of the research ensure participating companies had adequate
This year marks the first year that environmental
The 2019 Ethical Fashion Report Grading Tool lead time ahead of a new focus area being added
management metrics have been included in the
classifies the fashion manufacturing supply chain to the performance assessment process. From
assessment criteria, expanding this research
into three stages of production: final stage, inputs this report onwards, the environmental metrics
from its purely labour rights focus. It is widely
stage, and raw materials (outlined on page 15). will inform each company’s grade, contributing
understood that the fashion industry has a
Across these three stages of production, this to 10% of the final grade.
considerable, and often negative, impact on the
13METHODOLOGY
It is worth emphasising that Baptist World Aid data. Our researchers then send the findings
© ILO via https://flic.kr/p/V9uWtJ
does not conduct site inspections of factories. (marked against the assessment criteria) to the
Therefore, company grades are not an assessment company for comment and further input. This
of actual conditions in factories and farms, but input is then further reviewed. Baptist World Aid
rather an analysis of the strength of a company’s seeks to engage with companies, collect evidence,
labour rights and environmental management and understand their processes and systems;
systems. This research relies on data that is publicly however, we do not conduct site inspections as
available, alongside evidence of systems and part of the grading process.
practices provided by the companies themselves. Beyond engaging brands, our researchers also
work with relevant certifiers to get a better
Data collection and evaluation understanding of what systems are covered by
As a proxy for the entire fashion supply chain, their certification. Where companies use these
the 2019 Ethical Fashion Report assesses a large certifications, information from the certification
selection of companies on 44 specific criteria body is considered in the process of the
across the five key themes, at three critical stages company’s assessment. Certification bodies that
of the supply chain. have been engaged with include Better Cotton
The survey and the weightings applied through Initiative, the Global Organic Textile Standard,
the Grading Tool has been developed with input Fairtrade and Ethical Clothing Australia.
from supply chain specialists, non-government Our researchers actively seek to engage
organisations, and company experts (see companies (and pursue contact with non-
‘acknowledgements’ on page 97). The criteria responsive companies) using at least three
contained within the Grading Tool draws upon different mediums: phone calls, emails, and
international standards, including those articulated letters. All non-responsive companies receive their
by the International Labour Organization, the findings twice by post. Letters are also mailed to
Sustainable Development Goals, and the United the company’s Board Chair and CEO. This process
Nation’s Guiding Principles for Business and seeks to ensure that, in almost every instance
Human Rights. The Grading Tool will continue to where a brand has not responded, it is because it
evolve over time to incorporate new learnings and has intentionally chosen not to do so.
reflect changing industry best practice.
In 2019, 75% of brands engaged directly with this
In conducting a company evaluation, our research process.
researchers assess a company’s own publications,
Garment factory in Hung Yên, alongside any relevant independent reports and
14METHODOLOGY
What the research covers
Policies Transparency Auditing and Supplier Worker Environmental
The research collects and evaluates data
and Traceability Relationships Empowerment Management
from fashion companies using the following
(and living wage)
classification of the supply chain and across
the following themes of social responsibility. Why it matters: Why it matters: Why it matters: Monitoring Why it matters: For a Why it matters: The
Policies form the In order to ensure facilities and building labour rights system fashion supply chain
standards that that worker rights relationships are critical to to improve working can cause significant
RAW MATERIALS brands want their are being upheld, ensuring policies are adhered conditions, workers must environmental
production to brands need to to and improvements in be empowered, allowed degradation, which
• Cotton (farming) adhere to. They know which facilities working conditions are a voice, and have their affects the wellbeing
• Wool, etc (husbandry, are the baseline are responsible for being delivered. While most critical concerns of workers, the
by which a brand the production of no monitoring process addressed. It is workers communities they live
shearing etc)
can measure the their product. is perfect, high quality themselves who have the in, and their natural
• Crude Oil for synthetic effectiveness of monitoring helps to provide best visibility of working environment. By
fibres, plastics, etc What we assess:
its overall efforts a better understanding of conditions. assessing the materials
How much of
(extraction, refining) to uphold worker
the supply chain
the conditions of workers.
What we assess:
and facilities they use
rights. A focus on strengthening to make their products,
a company has Whether workers are
relationships allows trust brands can take
What we assess: traced; what it able to unite through
building, and increases a informed steps to reduce
Provisions to does to monitor democratic trade unions;
brand’s capacity to drive their environmental
prohibit forced and address whether collective
change. impact from the farm to
labour and child subcontracting; bargaining agreements
INPUTS PRODUCTION labour, allow what efforts it is What we assess: What have been established;
the final item of clothing.
• Textiles production for freedom of undertaking to percentage of production whether effective What we assess:
association and trace the remainder facilities are audited; grievance mechanisms Whether the company
(ginning, spinning, knitting,
protect worker of its supply whether unannounced and are in place; whether has done its own
dying, embroidery) health and safety; chain; a brand’s offsite worker interviews workers are receiving a assessment of the
• Leather (tanning) whether a brand transparency and anonymous worker living wage so they can environmental impact
• Plastic (processing, intends its policies and how willing surveys are used; whether support their families; a throughout its supply
moulding) to cover the entire they are to be checks are done on high risk brand’s efforts in moving chain; the percentage
production process; held accountable activities like labour brokers towards paying a living of sustainable materials
whether the brand through the and recruitment fees; wage. used; if the company has
is undertaking information it shares whether the brand is willing collected data on water
important measures about it’s supply to be transparent about its use and chemical use in
towards improving chain. results and remedial actions; its facilities; monitoring
FINAL STAGE PRODUCTION working conditions whether brands are actively systems to improve
in facilities. involved in building supplier chemical and water
• Cut-Make-Trim (CMT) relationships through management; whether
manufacturing (cutting, consolidation, collaboration, take-back and repair
supplier training and long programs have been
sewing, printing)
term relationship building. offered to customers.
15METHODOLOGY
Data verification Grading because it allows the benchmark of an ethically
To verify the data provided by companies, The grades awarded in the Report are a measure managed supply change to shift as the industry
company responses are reviewed and clarification of the efforts undertaken by each company to standard improves. Using an adjusted bell curve
and supporting documentation are sought where mitigate the risks of forced labour, child labour, rather than a fixed standard, means that it is
necessary. In some instances, the audit data worker exploitation, and environmental harm industry practice (and not Baptist World Aid)
provided by companies is relied upon to verify throughout their supply chains. Higher grades that sets the standard of ethical supply chain
conditions and benefits that workers receive. correspond to companies with labour rights management. Companies are incentivised to
Wherever possible, our researchers and company and environmental management systems that, continue improvements in order to align with the
representatives work through the survey questions if implemented well, should reduce the risk and progression of the industry.
together, allowing both parties to be satisfied that extent of worker exploitation and environmental Some company structures own several brands
the data presented is an accurate representation harm in the production of that company’s with differing supply chain management systems
of the company’s policies and processes. products. Low graded companies are those that in place. In these cases, the 2019 Ethical Fashion
To ensure consistency in the assessment of are not taking these initiatives, or those choosing Report grades brands separately. Individual brands
companies after completing the survey, company not to disclose if they are taking such initiatives. corresponding to a single company are listed,
responses are cross-checked by another member It is important to note that a high grade does not alongside their grade, in the Brand Index of this
of our research team. mean that a company has a supply chain which Report (see page 45).
is free from exploitation or environmental harm.
Survey support document Rather, it is an indicator of the efforts the company
2018 saw the introduction of the Survey Support is undertaking and the strength of its systems to
Baptist World Aid’s methodology
Document (previously referenced as the reduce risk. Furthermore, the 2019 Ethical Fashion
and grading process has been audited,
“Assessment Support Document”). This document Report’s grading methodology is designed
for detail please see page 95 of the
was reviewed and updated after the release of to spread companies out along an A+ to F
continuum, based on the relative strength of their Appendices.
the 2018 Ethical Fashion Report. It was once
again provided to companies as part of this year’s efforts and awarding grades on an adjusted bell
research process. curve (i.e. the best performers receive A+ grades,
the worst receive F grades, with many others in
The Survey Support Document acts as a helpful the middle).
guide for companies. It includes a rationale for
each survey question, and examples of what The adjusted bell curve is a key element to support
constitutes a strong labour rights system. The this project’s advocacy purpose. It encourages
Survey Support Document also details the companies to continue working on improving
validation requirements that need to be adhered their supply chain management, as the bell curve
to, in order to demonstrate that a system or policy grades a company comparatively against industry
is in place. peers. This is preferable to a fixed standard
163
Industry Influences
This section looks are three areas that are currently having
a significant influence on the fashion industry; The Modern
Slavery Act, Living Wages and Environmental concerns.
17INDUSTRY INFLUENCES
THE MODERN SLAVERY ACT
For six years now, Baptist World Aid has called or providing false or misleading information. It also Slavery Act, we acknowledge that more work
on fashion companies to disclose their efforts instates a state-level, independent Anti-Slavery needs to be done to ensure it is as robust as
Commissioner — tasked with educating the public possible. We will continue to call for penalties for
to address the risk of slavery in their supply on the issues of modern slavery and promoting companies that fail to comply with the reporting
chains, reporting on these efforts through the action to end it. requirement, and an Independent Commissioner
Ethical Fashion Report. to ensure that the legislation is effectively
Commonwealth Modern Slavery Act 3 implemented.
Through this research, we have become After years of advocacy from civil society groups,
increasingly aware of the critical role that including Baptist World Aid and our Coalition Impact
governments have to play in ending child labour partner, STOP THE TRAFFIK, Australia now has There is no doubt that this new legislation will be
and exploitation in corporate supply chains. For this a federal Modern Slavery Act. This is a welcome a catalyst for change in the business community.
reason, we have been resolute in our calls for supply first step in addressing transparency and modern We look forward to seeing how the fashion
chain regulation in Australia and our organisation slavery in corporate supply chains. industry responds, not only to these new legal
has been invited to participate in the various The Modern Slavery Act, which became effective requirements placed upon it, but also to public
conversations and inquiries to achieve this end.1 on 1 January 2019, requires entities that are pressure, as consumers are presented with more
either based, or operating, in Australia, that have detailed information about how their favourite
2018 saw the introduction of two important pieces brands produce their clothes.
of anti-slavery legislation in Australia. an annual consolidated revenue of more than
$100 million, to report annually on the risks of We also anticipate that other groups within civil
modern slavery in their operations and supply society, like investors and boutique fund managers,
New South Wales Modern Slavery Act 2
chains. This annual report, known as a ‘Modern will now have a more direct avenue to both
In June 2018, New South Wales became the first
Slavery Statement’, must list the actions a engage with, and measure, a company’s appetite
Australian jurisdiction to introduce modern slavery
company has taken to assess and address those for corporate social responsibility as it relates
legislation.
risks, as well as gauge the quality of the company’s to the issue of modern slavery. In turn, we are
The NSW Modern Slavery Act requires commercial response. This statement must be approved by the hopeful that this will further drive improvements in
entities with an annual turnover of at least $50 company’s Board of Directors, or an equivalent, corporate practice.
million, and at least one employee in New South and signed by a Company Director. Once Finally, this legislation adds significant weight to
Wales, to annually report on the structure of submitted, this statement will be made publicly the efforts of Baptist World Aid in this space, as
their supply chain; key risk areas and mitigation available on a central repository known as the it addresses several areas that we have — and
strategies; policies and due diligence processes ‘Modern Slavery Statements Register’ 4. will continue to — assess companies on. There
relating to modern slavery; and training practices
It is estimated that these requirements will affect are many brands in the fashion industry that
relating to modern slavery.
approximately 3,000 businesses.5 have worked collaboratively with Baptist World
The NSW Modern Slavery Act also provides for Aid to reduce the risk of modern slavery in their
While Baptist World Aid welcomes the
penalties of up to $1.1 million for non-compliance supply chains. These companies will now be well
introduction of the Commonwealth Modern
positioned to report on their achievements to date.
18INDUSTRY INFLUENCES
LIVING WAGES
Low wages and excessive working hours are This results in minimum wages that are far below Not being paid a living wage is one of the most
endemic and persistent issues in global supply what would regularly be considered a living wage. significant issues faced by fashion supply chain
In Bangladesh for example, living wage estimates workers 4, as the benefits of receiving a living
chains, which, all too often, leave full-time are 2.8 times its current minimum wage and, in wage would be nothing short of life-changing.
workers, and their families, trapped in a cycle Vietnam, the current minimum wage is half of the The reality is, the payment of a living wage could
of poverty. Baptist World Aid, through this estimated living wage 3. transform the lives of millions by allowing people
assessment of companies and their brands,
promotes the adoption of a living wage
© World Wide Fund via https://flic.kr/p/81oLDu
that will meet a workers’ basic needs and
allow them to maintain a safe and decent
standard of living.
State of the industry
Fashion is a lucrative industry. The Australian
Fashion Industry alone, was worth close to
$23.5 billion in 2018 1. Its value is projected to
continue growing, with fast fashion, in particular,
expected to grow at 6.2% over the next five
years 2.These profits extend beyond Australia,
underpinning the economies of developing
countries such as Bangladesh, Cambodia, and
Vietnam, where garments are amongst the largest
exports.
But in the majority of circumstances, these
profits do not reach the workers who make these
garments. This is because garment-producing
countries, in an effort to retain the investment of
foreign companies, frequently set minimum wages
too low. Fearing that higher prices, might drive
interested companies to competitor countries. Cotton picker in Shayampet,
19INDUSTRY INFLUENCES
LIVING WAGES
to lift themselves — and their families — out of civil society, consumers factory management, and One of the most important first steps a company
poverty and, at the same time, drive economic workers. can take when seeking to pay its workers a living
growth within communities and nations. There are many initiatives currently working wage, is deciding on a robust methodology to
However, the reality of paying living wages is to progress the payment of living wages, two help determine a figure for each region it sources
complex and difficult to implement. It is well worth mentioning are the Anker Methodology, In from. 48% of companies assessed by this report
recognised that attaining a living wage is not partnership with the Global Living Wage Coalition received credit for taking this step. The majority
something that can be achieved by retailers alone. (GLWC), and ACT. cited using the Anker Methodology.
It requires a multi-stakeholder approach, that
includes companies and their brands, government, Anker Methodology ACT
The Anker Methodology defines a living wage as, ACT (Action, Collaboration, Transformation) is an
agreement between international brands, retailers,
© ILO via https://flic.kr/p/eiJ64a
“Remuneration received for a standard work week
by a worker in a particular place sufficient to manufacturers, and trade unions, to address the
afford a decent standard of living for the worker issue of living wage in the textile and garment
and her or his family. Elements of a decent supply chain. ACT aims to improve wages in
standard of living include food, water, housing, the fashion industry by establishing collective
education, health care, transport, clothing, and bargaining in key garment and textile sourcing
other essential needs, including provision for countries, at an industry level, supported by world-
unexpected events 5.” class manufacturing standards and responsible
purchasing practices.
Developed by academic researchers and
economists Martha and Richard Anker in ACT is a collaboration of global brands and the
partnership with GLWC, the methodology has two Industrial Global Union, representing garment,
main components 6: textile, and footwear workers from around the
globe. Of the 21 brands that are members of ACT,
1. Estimating the cost of a basic decent lifestyle ten are represented in the 2019 Ethical Fashion
for workers and his/her family in a particular Report:
geographical location; and
2. Determining whether the estimated living wage • Arcadia • Inditex
is being paid to workers. • ASOS • Kmart Australia
The Ankers have conducted robust research • Canterbury • Next
to develop living wage calculations for a number • Cotton on Group • PVH
of regions across the Asia Pacific and continue
• H&M • Target
Garment factory in HCM City, Vietnam. to include more regions in its analysis, annually.
20INDUSTRY INFLUENCES
LIVING WAGES
Members of ACT agree to the following However, when looking at tangible benefits So, whilst the fashion industry’s progress towards
principles 7: to workers, only 20% of companies could understanding the importance of a living wage is
demonstrate that they were paying a living wage promising, much more work needs to be done in
• A joint approach is needed where all participants
in global supply chains assume their respective to some portion of their supply chain, with a order to ensure workers receive the living wage
responsibilities in achieving freedom of mere 5% of these companies paying a living wage they deserve.
association, collective bargaining and living to all workers in their final stage of production.
wages.
© Asia Development Bank via https://flic.kr/p/dQCiZw
• Agreement on a living wage should be
reached through collective bargaining between
employers and workers and their representatives,
at industry level.
• Workers must be free and able to exercise their
right to organise and bargain collectively in
accordance with ILO Conventions.
Collective bargaining is at the heart of ACT’s
work. ACT believes that effective freedom of
association will empower workers to negotiate
tailor-made solutions which allow both flexibility
and security.
Corporate response
Baptist World Aid has observed an increasing
number of companies that are taking meaningful
action to work towards paying a living wage
to workers in their supply chains. 48% of
companies have started to develop a living
wage methodology for the regions they source
from. 24% of companies have published a level
of commitment to pay their workers a living
wage, demonstrating their willingness to be
held accountable and their recognition of the
importance of paying a living wage. Workers in wool manufacturing plant in Bangladesh.
21INDUSTRY INFLUENCES
ENVIRONMENTAL CONCERNS
Across the last six years, the Ethical Fashion Environmental and social ethics matter The type and severity of impact that an item of
Report has assessed the labour rights deeply to consumers too. 86% of the general clothing will have depends significantly on the
population think companies should be addressing material that it is made from. Cotton, polyester,
management systems of fashion companies social and environmental issues 3. When looking neoprene, and recycled fibres are made and
across the globe. In the 2018 Ethical Fashion at Gen Z — the generation that will account processed in very different ways and require
Report, we acknowledged that a “truly ethical” for 40% of consumers by 2020 — this statistic different solutions to mitigate their effect on the
jumps to 94% 4. The purchasing decisions of environment. The fashion industry is a significant
company not only ensures their supply chain
consumers are already guided by their values 5, consumer of fresh water, using approximately
empowers workers and pays them a living and this trend only looks set to grow. For the 79 billion cubic metres per year 8. Conversely,
wage, it also understands its impact on the fashion industry, increasing consumer concern synthetic fibres made from plastic and chemically
environment and manages its footprint to and the continued significant environmental processed plant materials use less water and land
impact of production signal a strong impetus to process, however they create other effects, such
keep waterways, the earth, and the for change. as a significantly higher greenhouse gas emission
atmosphere healthy. Correspondingly, it is the footprint than cotton 9. Companies therefore need
workers in the fashion supply chain that most Environmental impact concerns to take tailored approaches to reducing their
in the fashion industry impact, however there are some common themes
acutely feel the detrimental effects of poor
of environmental impact across fashion supply
environmental management. Like many other industries, the fashion industry’s
chains. Chemical use, water use, and the treatment
impact on the environment is diverse. Research
of wastewater are vital considerations when
has documented direct impact on climate change
The significant environmental impact of the managing inputs facilities, such as dyeing and
through high CO2 emissions; significant freshwater
fashion industry — starting from the raw materials finishing facilities.
withdrawal to grow fibres and for the dyeing and
stage and continuing across all stages, through The impact of the fashion industry on the
finishing process of fabrics; impacted ecosystem
to the end-of-life of a garment — has been well environment varies significantly depending on
quality through a range of forms of pollution; harm
documented. The breadth of environmental issues which stage of production is being observed, what
to human health; and resource depletion 6.
that the industry touches on is also wide, from raw material is used, and where the production is
carbon emissions to water consumption, and It is important to note that most of the
taking place. In order to capture this complexity
waste concerns 1. Across time, the rapid growth environmental impact caused by the fashion
and advocate for better practice in environmental
of production and consumption in the fashion industry occurs within its supply chains, most
management, we asked fashion companies to
industry has seen the environmental impact of notably at the raw materials and input stages 7.
address aspects of environmental management
the industry grow 2. The depth, breadth, and rapid Therefore, companies which have put significant
which were at the intersection of the impact and
scaling-up of the fashion industry’s environmental effort into tracing facilities deep in their supply
the fashion industry’s ability to act.
impact, highlights that there is a need to chain are at an advantage to understand and
understand and address the issue. improve environmental management practices.
22INDUSTRY INFLUENCES
ENVIRONMENTAL CONCERNS
Benchmarking environmental “What percentage of the company’s final product Companies can (and should) also actively seek to
management in the fashion industry is made from sustainable fibres?” use fibres that are available from more sustainable
These are the metrics used to assess companies, We recognise that fibres have different impacts sources, including those cultivated from less
including the questions asked and a rationale depending on their type, source, and how they are water-intensive or chemical-intensive raw materials
as to the significance of each question. Of the processed. Our first question regarding materials and recycled fibres.
44 questions asked overall in our Grading seeks to grow understanding of the top three
Tool, 11 were dedicated to environmental fibres used by volume in a company’s supply Emissions
management, contributing to 10% of a company’s chain, then encourage implementation of that This year, we also asked, “Has the company
overall grade. understanding into the product design stage. publicly announced a net-zero carbon emissions
Environmental impact can thereby be prevented, reduction target by 2050 for its supply chain? Or
Governance rather than treated after-the-fact. The percentage is it lobbying for this target in the countries that it
This year we asked, “Has the company undertaken of companies that have assessed the impact of is operating in?”
an assessment of its environmental impact and their top three fibres and used these assessments Carbon emissions are a consequence of all stages
risks throughout its supply chain?” to inform changes in their design and production of the supply chain. The Paris Agreement is a
increased by 7% in 2019. worldwide framework to address greenhouse
A clear starting point in managing the risks of
harmful environmental impact within the fashion
industry, is for companies to understand the
© ILO via https://flic.kr/p/BUtnpt
risks at play in their own supply chain. Company
decision-makers will be best situated to develop
a strategic approach to managing environmental
matters, when they are aware of the current
environmental impact of their company and the
possible environmental risks throughout its
supply chain.
Materials
We asked companies two questions related to the
materials used in their supply chain. These were:
“Has the company assessed the environmental
impact of its top three fibres and materials used
in its apparel products and implemented learnings
from this assessment into product design and
production?” and; Better Work Factory in Vietnam.
23INDUSTRY INFLUENCES
ENVIRONMENTAL CONCERNS
gases emissions, including carbon emissions. including testing, were being used to ensure that “For what percentage of wet-processing facilities
The net-zero carbon emissions reduction target final products complied with the RSL. has the company collected wastewater quality
aligns with the Paris Agreement. We believe that data?” and;
Secondly, and deeper into the supply chain, a
company commitment to this target does two “Of these, do all have wastewater improvement
manufacturing restricted substance list (MRSL)
things: firstly, it indicates to governments that strategies?”
defines banned and restricted hazardous
the private sector endorses and seeks to align its
substances to prevent their use and discharge into Wet-processing facilities include those that
practices with the Paris Agreement; and secondly,
the environment during manufacturing. Again, it undertake viscose-manufacturing, weaving,
it sets a target for companies to bring their supply
was important for us to see that quality assurance dyeing, printing, and finishing processes. These
chain energy usage into line with. To acknowledge
systems were in place, such as monitoring of facilities are more likely to have effluent that is
that companies may be taking a range of differed
chemical management systems and water quality. environmentally hazardous, if not treated prior to
actions to this end, we noted in our assessment
Since our preliminary analysis of companies in release into the environment.
that companies may alternatively, or additionally,
2018, we have seen a 14% increase in companies
engage on this issue with the government in the Wastewater management can be achieved
checking compliance with their MRSL.
countries where they operate through various through wastewater treatment systems, inputs
forms of lobbying. There has been a 10% increase management, wastewater quality testing,
this year in the number of companies receiving full Water use
standards development and implementation, and a
credit through publicly committing to a target or This year we asked, “For what percentage of water
combination of the above.
lobbying governments. intensive facilities has the company collected and
benchmarked water use data?” and; The number of companies using wastewater
improvement strategies has grown this year. For
Chemical use “Has the company used the above data to
companies which are collecting wastewater quality
Regarding chemical use, we asked two key implement a water use plan?”
data on their facilities, only 15% do not have
questions of companies this year. These were: Garment production is water-intensive. Our first improvement strategies implemented in any facility.
“Does the company have a restricted substances question aims to increase company understanding
list against which it tests compliance?” and; of actual and ideal water usage in water-intensive Material/product waste
facilities throughout their supply chain, while the The 2018 assessment also recognises that
“Does the company have a manufacturing
following question aims to encourage companies textile waste is a major and growing problem.
restricted substances list against which it tests
to implement these learnings. We therefore asked a final question to this end,
compliance?”
namely, “Does the company make available to
Firstly, a restricted substance list (RSL) defines the Wastewater customers a take-back and/or repair program?”.
permitted levels of chemical content and chemical Similar to the above questions, we also sought
exposure for final products being produced by Take-back programs have the potential to lead
to explore wastewater management through the
a company. It was important for us to see that to textile recycling into new textiles, insulation,
following questions:
not only was this RSL being communicated to and other products. Repair programs allow for
suppliers, but that quality assurance systems, longevity of garment use.
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