The 2019Ethical FashionReportTHE TRUTH BEHIND THE BARCODE

THE 2019 ETHICAL FASHION REPORTTHE TRUTH BEHIND THE BARCODEDate: April 2019Project Leads: Libby Sanders, Jasmin MawsonLead Researchers: Jessica Tatzenko, Claire Hart, Annie Hollister-JonesResearcher Support: Meredith Ryland, Luke Medic, Emily TaylorBehind the Barcode is a project of Baptist World Aid Australia.New Zealand headquartered companies researched in partnershipwith Tearfund New Zealand.Front cover photo: Baptist World Aid Design: Susanne GeppertInfographics (pp 10–11): Cadence Media2

CONTENTS1. Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42. Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123. Industry Influences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174. Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255. Traceability and Transparency. . . . . . . . . . . . . . . . . . . . . 286. Auditing and Supplier Relationships. . . . . . . . . . . . 33Appendices7. Worker Empowerment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Statements from non-responsive brands 908. Environmental Management. . . . . . . . . . . . . . . . . . . . . . . 40Letter from auditor 959. Brand Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4510. Survey Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Sources 96About Baptist World Aid Australia 97Acknowledgements 983

1Executive SummaryThis section outlines the research aimand scope; data collection and findings;and overall results of all companies.4

FFDFD–D–FD FDDD D–DC–FDC FBBD C–FDA FC–FFFC–A D–D FD C C–C–C B FD–DDFA–B B CFD D–C–FB C–B–A–D FD–A C–FB–D D DFEnvironmentalmanagementDAA–FFBCA–BBFFC FFC FC–FB C–DCDDFD DFB B FB–FC–A FC FDDB A D–A–FB A–B A B A FD–D BC–A A A ACD FB–DB C–B A A–D A A FFA–C A FFAuditing andsupplierrelationshipsD–A A–FD A BA BA–FC–B FC–C D B FC C–B C–C BFA–AC A ADB FC AD A–FDFA–A CAFB AA–A–A–AFB–AB CA AB A–C C CB–C–A AA–A B C–A–A B–FABA BFTrancparency andTraceabilityD–B B–FC–AC–A–CBFD–D FC–CDCFC CC CD CFCA–DA–AC–BFC A–DC–FDFC A DC FBACB–BA FC C–C–DA ABB D B–D BD–A–B A–AB D B–B B–FA B–CCFD–AB–FCA–C A–CBFD C FD CDB–FC C–C C–CC FC B D A–A–C–BD–C A D B–FDD–BA D BD–BA–BB B AFCB–C D A AA–B CC C–BD AB A–A BC–BA C FA–B–B CFPoliciesAbercrombie & Fitch*adidasALDI StoresAlly Fashion*Anthea Crawford*APG & Co.Arcadia GroupAS ColourASICSASOSBaby City*BardotBarkers Clothing*Bec and Bridge*Ben Sherman AustraliaBest & LessBetts GroupBig WBloch*Blue IllusionBoardridersBodenBoohooBrand Collective (Apparel)Brand Collective (Footwear)Camilla and Marc*Canterbury NZCity Chic CollectiveColes*Cotton On GroupCountry Road GroupCueDavid JonesDecjuba*DesignworksEtikoEzibuyFactory XFarmers*Fast Future BrandsForever 21*Forever NewFreeset T–ShirtsFruit of the Loom*Gap Inc.Gazal*General Pants GroupGildan ActivewearGormanH&MHallenstein Glasson HoldingsHanesbrandsHot Springs*House of QuirkyHufferHugo Boss GroupHunting & Fishing NZIcebreakerInditexIndustrieJeanswestJETSJust GroupK&KKaren Walker*Kate Sylvester*KathmanduKmart AustraliaKookaiKowtowL BrandsLacosteLevi Strauss & Co.*Liminal ApparelLorna JaneLowes*Lululemon AthleticaMacpacMarks & SpencerMax*Merric Apparel NZ*OVERALL GRADEB–A A FA A A A AA FA–A FA–A A–A FA A–A A–A A FA A A–A A AA B A A AA BA–CA A AA A A A A A A A FA A A A–A A A A A A A A A A A A A A A A A A B–A A A A FEXECUTIVE SUMMARYINTRODUCTIONBaptist World Aid is pleased to deliver its sixthconsecutive report on labour rights andenvironmental management systems in thefashion industry. The 2019 Ethical FashionReport grades 130 companies from A to F,based on the strength of their systems tomitigate against the risks of forced labour, childlabour, and exploitation in their supply chains.Overall Grades: A– MExcitingly, in addition to its traditional focus onlabour rights, this year’s research also incorporatesnew environmental management metrics in theassessment criteria. In 2019, 75% of companiesassessed actively engaged in the research process,shedding light on the global fashion industry’sperformance in the arenas of labour rights andenvironmental management.For the 43 million workers in the Asia Pacific1region, and for millions of others across the world,the global fashion industry remains a significantemployer. It also spurs economic growth,generates tax revenue, provides valuable skills andtraining, and delivers crucial foreign exchange.All of these factors can, and often do, contributeto improving the lives of workers and theircommunities.At the same time, however, the fashion industryis a source of exploitation for millions.* non-responsive companies5

EXECUTIVE SUMMARYINTRODUCTIONFor the majority of workers in the fashion industry,wages are so low that it leaves them, and theirfamilies, trapped in the cycle of poverty. Beyondthis, fashion production throughout the AsiaPacific is marred by the prevalence of slavery andchild labour. In addition, whilst safety standardshave improved, fire safety, structural defects withinfactories, and unsafe working conditions remainreasons for continued concern.non-responsive companiesWorkerempowermentA FD B–DD–D–B FB–D A FD–BFC–D D–D–FD–D B–B D DD–FFC D FFC–FD–FD FD FDD FFDFC EnvironmentalmanagementA FD A B B–A AFB FA DFA FCAB–DD D BA–A C–ADFFC BFFC–FC DC–D–DFA A FFDFD Auditing andsupplierrelationshipsA DC A–A–B A–A D AC A DB–A D–CA–B A–B–BAAA CBC–FD BBFFA–FBCA–DCFAA–FFB–FC Trancparency andTraceabilityThese 130 companies represent480 brands. To check brandgrades, go to the brand indexon page 45 or online D–BA–C B–CB DB–BA DC–AFD BCBD BBB–B C–B C–FD B D FFBFC–C–B–FCFB C FFC FBPoliciesA A–A A A A A A A–A A A AA A FA A A A A AA A A A A A FAA A FFA FA A A C–AB A A FFAAAMighty Good GroupMunro Footwear GroupMyerNature BabyNew BalanceNextNikeNobody DenimNoni B GroupNudie Jeans Co.Oroton GroupOutland DenimOxfordPaganiPatagoniaPavement United Brands*Postie PumaPVH Corp.*R.M. WilliamsRalph Lauren*Retail Apparel GroupRip CurlRodd & GunnRREPPRuby ApparelSeafollySeed HeritageShowpo*Simon de Winter GroupSussan GroupSwanndri NZ3 Wise Men Ltd.*T&T Fashions*Target AustraliaThe Baby Factory*The Iconic*The PAS GroupThe Warehouse GroupTigerlily*Tree of LifeTrelise Cooper*UNIQLOVF Corp.Voyager Distributing Co.*Wish Designs*Workwear GroupWORLD*ZimmermannOVERALL GRADE* healthy. Correspondingly, it is the workers in thefashion supply chain that most acutely feel thedetrimental effects of poor environmentalmanagement. This is the first year that the EthicalFashion Report will assess companies on theirenvironmental management systems, alongsidetheir labour rights management systems, inconsideration of their final grade.A DB–A–BB–B–A–DB C A DC–AFCBC B–C–C B A–ACBC–FD BC FFBFC C–B–D–CFB BFFCD–B–Overall Grades: M– ZFor six years, this research has assessedcompanies across the globe on the strength oftheir labour rights management systems. In the2018 Ethical Fashion Report, we acknowledgedthat a “truly ethical” company not only ensuresthat its supply chain empowers workers and paysthem a living wage, it also understands its impacton the environment and manages its footprint tokeep waterways, the earth, and the atmosphere6

EXECUTIVE SUMMARYINDUSTRY PROGRESS Solidarity Center via annual nature of this research enables us to track theprogress in ethical sourcing, made by the fashion industry.Since last year, improvements have been made across theindustry in 79% of the areas assessed. Most noteworthyareas of improvement in 2019 are:Gender inequality 61% of companies (an increase of22%) have created policies addressing gender inequalityin their supply chain, including the introduction ofstrategies addressing discrimination faced by women.Responsible purchasing practices 45% of companies(an increase of 18%) have introduced policies addressingresponsible purchasing practices, with an aim to improveworking conditions.Child and forced labour 35% of companies (an increaseof 17%) have robust remediation plans to redress child orforced labour if it is found in their supply chain.Manufacturing Restrictive Substance List (MRSL)35% of companies (an increase of 14%) have acomprehensive MRSL that they test against to ensureworkers are not exposed to hazardous chemicals withdire environmental impacts.An important part of the annual reporting process isto give companies the opportunity to report on theimprovements they have made, which encouragescontinual improvement across the industry. Of thecompanies that were assessed by both the 2018 and2019 Ethical Fashion Reports, 38% improved their overallgrade. The area showing the highest improvement in2019 is Auditing and Supplier Relationships, followedby Environmental Management (which was assessedin 2018, but not included in the grading until 2019).Workers with Bangladesh Independent Garment Workers Union.7

EXECUTIVE SUMMARYINDUSTRY CHALLENGESDespite the significant progress we’veseen across the industry in the last sixyears, serious concerns remain thatneed addressing.TraceabilityA company’s investment in traceability and itsknowledge of suppliers remains a key pillar ofa strong labour rights management system.If companies don’t know (or don’t care) whotheir suppliers are, then there’s virtually no wayof ensuring that the workers who make theirproducts aren’t being exploited. It is encouragingthen, that this continues to be one of the mostsignificant areas of improvement for the industry— since Baptist World Aid began publishing thisresearch in 2013, there has been a 32% increase incompanies who are tracing their inputs suppliersand a 31% increase in companies who are tracingtheir raw materials supplier.Notwithstanding these improvements, traceabilityremains a significant challenge across the industry.While 69% of companies could demonstratetracing all final stage suppliers, only 18% havetraced all inputs suppliers, and just 8% have tracedall raw material suppliers. Although the majority ofcompanies have begun tracing suppliers at thesedeeper stages of their supply chain, it is evidentthat many still have no knowledge of where theirinputs and raw materials are being sourced. Withless visibility, comes greater risk. The prominenceof forced and child labour is well documented atthese earlier stages of production.2TransparencyInvestment in transparency demonstrates acompany’s willingness to be accountable toconsumers, civil society, and workers; and makesit easier for these groups to collaborate to ensurethat the rights of workers are upheld. There aremany examples of corporate transparency aroundsupply chain practices, but one of the mostsignificant examples would be the publicationof a list of suppliers, that includes supplierbusiness names and addresses. The 2019 EthicalFashion Report has found that 37% of companieshave published a complete list of all final stagesuppliers, increasing to 50% when includingcompanies that have published information aboutat least some suppliers.Despite the percentage of companies publishingfull supplier lists having more than doubled sincewe began this research in 2013, transparencyremains an ongoing challenge in the industry. Lowtransparency is one of the biggest determinantsfor the receipt of a low grade, because companiesare graded based on a combination of publiclyavailable information and any information they arewilling to disclose to our researchers.As mentioned previously, 75% of companies choseto engage with the research process this year, withmost companies seeing value in the process ofbeing benchmarked and gaining feedback.Several companies with no publicly availableinformation regarding their ethical sourcingpractices have chosen not to engage with theresearch process, and so receive F grades in the2019 Ethical Fashion Report. Without makinginformation known, it becomes impossible forthe public to know if these companies are doinganything to combat exploitation in their supplychains. A number of companies in this Report werenon-responsive, but still scored reasonable grades,as high as a B, due to the amount of publiclyavailable information they published. For moreinformation about the research process and nonresponsive companies, refer to the methodology(page 12). Non-responsive companies were alsogiven the opportunity to provide a statementabout why they chose not to engage with thisresearch. These statements are included onpage 90.But transparency is no longer an expectation onlydriven by consumers, this expectation has alsobeen legislated in a number of countries. The USA,France, the UK, and, now, Australia (through theintroduction of a Commonwealth Modern SlaveryAct) all require companies to publish details of thesystems they have in place to ensure that workersaren’t being enslaved. You can read more aboutthe introduction of modern slavery legislation inAustralia on page 18.8

EXECUTIVE SUMMARYINDUSTRY CHALLENGESLiving wageEnvironmental managementA living wage is a wage that is sufficient forworkers to be able to afford the basics (food, water,healthcare, clothing, electricity, and education)for themselves and their dependants. Yet mostgarment sector workers receive wages well belowthis figure. It comes as no surprise, then, that lowwages are among the chief concerns for workers.3The environmental impact of the fashion industryis significant with the apparel industry accountingfor 10% of global emissions.4 Up to 20,000 litresof water is needed to produce 1 kg of cotton —with it taking up to 2,700 litres to produce thecotton needed to make a single T-shirt.5 Globally,humans are consuming 800 billion new pieces ofclothing per yea