The 2019 Ethical Fashion Report – The Truth Behind the Barcode

The report for 2019, published on April 10, is more complex than ever. The 2019 Ethical Fashion Report ranks 130 companies from A+ to F based on the strength of their supply chains to mitigate the risks of forced labour, child labour, and exploitation.

Researchers reviewed 130 companies representing 480 brands including 50 newcomers. The research methodology has also been expanded to include data on the environmental impact of brands bringing the total number of business criteria to 44.

The 2019 Ethical Fashion Report

At three critical stages of the supply chain, the 2019 Ethical Fashion Report evaluates a large selection of companies on 44 specific criteria across the five key themes.

Baptist World Aid's sixth Ethical Fashion Report ranked 130 companies from A+ to F, with some of Australia's most well-known brands scoring a D+ or less.

Baptist World Aid is an international organisation of Christian aid and development aimed at empowering communities and achieving justice for the poor.

The organisation has focused on fashion and electronics industry ethical consumption, releasing annual reports and guides. Based on 44 specific criteria, the Behind The Barcode project has been running for six years, researching and grading brands.

How are these brands actually graded? 

The research uses raw materials, inputs production, and final stage production to collect and evaluate data from fashion companies.

Company responses are reviewed and further clarified whereby supporting documentation are sought where necessary to verify the data provided by companies.

The grades awarded in the report are a measure of each company's efforts to mitigate the risks of forced labour, child labour, labor exploitation, and environmental harm across their supply chains.

Higher grades correspond to companies with labour rights and environmental management systems that, if implemented well, should reduce the risk and extent of worker exploitation and environmental harm in the production of that company’s products.

Low-graded companies are those who do not take such initiatives, or those who choose not to disclose if they take such initiatives.

Names like Cotton On, Country Road and Kookai all managed top grades, but there are a few of smaller companies, like Showpo, P.E. Nation and Rebecca Vallance, who chose not to participate and were graded with an F. Low-end fashion companies like Lowes, Katies, Miller and Rockman performed poorly, but low prices were not necessarily a sign of low ethical business practices.

Progress in 2019

In 79 percent of the areas assessed, improvements have been made across the industry since last year. Most notable areas of advancement in 2019 are that 61 percent of businesses (an increase of 22 percent) have developed policies to address gender inequality in their supply chain, including the introduction of strategies to address women's discrimination.

Forty-five percent (45%) of companies practiced responsible purchasing practices (an 18 percent increase), as they introduced policies addressing responsible buying practices with the aim of improving working conditions.

Child and forced labour improvement accounted for a total of 35% of enterprises (an increase of 17%) with robust plans for remediation of children or forced labour, if found in their supply chain.

A 14% increase in the brands, accounted for 35% of the company respondents, used the Manufacturing Restrictive Substance List (MRSL) in trying out and testing their standards and procedures to ensure their workers are not exposed to dangerous chemicals with dire environmental impacts.

Gleaned from the 2018 report, some notable outcomes have been noted. More companies are investing in Gender Equality within the supply chain accounted for 22%. About 18% of the brand respondents were found to have sanitized and improved in their Responsible Purchasing Practices. By far, 17% of the brands are ready to deal in looking into its policies that are against Remediate Child and Forced Labour. Significantly, 38% of companies saw an improvement in their grade in which seven (7) received an A grade and seventeen (17) received an F grade. In addition to its traditional focus on labor rights, new environmental management metrics were  also incorporated in the evaluation criteria in this year's research.

In 2019, 75% of companies were actively involved in the research process, shedding light on the performance of the global fashion industry in the labor rights and environmental management arenas.

The global fashion industry remains a significant employer for the 43 million workers in the Asia Pacific region and for millions of others worldwide. 

Baptist World Aid

Baptist World Aid helps Australians address global poverty injustice. They partner with similar agencies to encourage communities to emerge from poverty, challenge injustice, and build resilience.

Baptist World Aid partners in giving, ethical consumption, courageous advocacy, and faithful prayer with Christians and churches in Australia to achieve justice for people living in poverty.

Their community development projects build lasting poverty solutions for entire communities, and their child sponsorship program helps children break down poverty barriers – for themselves and their entire community.

Their main motives are working through their Christian partners, as they say on their official website "we work with communities to identify the root causes of their poverty. We provide support, resources, and training so communities can put their plans to overcome poverty into action."

A high level of community involvement and ownership is central to the success of this type of programming. That's why they work to encourage people to form community-based organisations with their Christian partners.

The community aspect of the organisation is also important. "Community-based organisations received training on agriculture, education, health, child rights, leadership skills and savings. Members are encouraged to act together and discover ways to use their strengths to create change and build lasting solutions." Baptist World Aid partnered with 39 local organisations in 25 countries.

The Progress Made so Far

Chief Executive Officer, John Hickey, commented in an interview for Eternity News, “When we first came out in 2013, most of the corporates were going ‘who is this organisation Baptist World Aid?’, so we probably had less than 30 percent of the companies engaged directly with us on our request for survey information."

He notes that this year "we were up to over three-quarters of the companies but a hugely expanded run of companies and brands, so we now have 130 companies and over 430 brands that we’re assessing through the report. So there’s been a big change in the scale but also in the number that engage directly with it."

"In 2013 barely any companies were talking about living wage, which was one of our key things. We’ve still got a long way to go, but companies are talking about it now. The percentage of actual living wages is still very low, but at least you can see the trend there, which is really exciting … So they’re researching much better what’s going on – now they need to act on it."

He noted there was a huge shift in the way companies kept track of suppliers. "Last year, we’ve seen 32 percent more companies tracing the inputs of suppliers, 31 percent more companies are tracing raw materials suppliers. That’s a huge shift because often companies would look one step back in the supply chain and not go much further, but clearly the supply chain starts with the production of the raw materials, then there’s the basic milling, then there’s a garment manufacturer, and so on."

The best method to produce an accurate and honest report is to go through the whole supply chain, and "not just a part that’s most visible to you, and think responsibly about that. That’s a whole area that we want to focus on now with companies. Because … often bad environmental impact has a clear line of affecting the vulnerability of people living around the production place."

The report is also aware of the problem of pollution, and has taken into account the sustainability of fashion companies. "There’s a statistic that one T-shirt can take up to 2500 litres of water to produce, so it’s a huge amount of water that is used for a start, but secondly what we also know is that with manufacturing processes you get polluted water … and also air pollution. So we’re really conscious of trying to shift the major players to think about not just the day-to-day work environment but the whole environment that people in the supply chain are enduring based on the manufacturing practices."

There's a potential improvement in standards, but he warns that  "it’s a process – we’re not expecting spectacular change, but it’s a journey and you see positive change over time. Only 8 percent of companies could demonstrate the presence of trade unions or collective bargaining agreements in all of their factories, and 21 percent could demonstrate the presence in the majority of factories, so we think that is a low percentage."

He concluded the interview with the goal of "a respectful balance – we would not have a strong economy without good business generating employment, but at the same time there needs to be a sense of being reasonable and there is a need to have a collective approach."

Some statements from non-responsive companies

Even though the Report has gained traction in recent years, there are still companies that refuse to supply their data. Here are their reasoning behind that decision:

World

    WORLD was founded by Dame Denise L'Estrange-Corbet and Francis Hooper in Auckland in 1989, and while they were non-responsive they sent a statement outlining their position.

    "WORLD has chosen not to partake in the Tearfund questionnaire. Whilst WORLD appreciates what Tearfund is endeavouring to achieve, we do not believe at this time, that the Tearfund Survey is applicable to, or understanding of New Zealand garment production. WORLD will continue to champion New Zealand manufacturing and help maintain a local industry that is receding at an alarming rate, whilst applying our community’s high ethical and moral standards."

    Fruit of the Loom

      Fruit of the Loom has been a leading manufacturer of clothing for more than 165 years; their range, quality, service and value, established in 1851 by two brothers in Rhode Island, USA.  The name of the company is one of the oldest trademarks in the world and this also means that it is older than Coca-Cola, the light bulb and even the modest bag of paper. They refused to participate in the report, however, and sent only a statement.

      "At Fruit of the Loom we are committed to conducting business in accordance with the highest standards of business ethics and respect for human rights and the environment. We operate in accordance with these standards as set forth in our Code of Conduct in all facilities that supply our products. We take pride in creating an environment of continuous improvement where both employees and the business can be successful, balancing the needs of the business with our impact on the environment, the people involved in our supply chain, and the communities in which we operate. We choose suppliers that share our commitment and work with us to achieve a sustainable supply chain by adhering to our Code of Conduct, which is monitored through regular assessments conducted by third party firms."

      They commented how their worker safety policies are critically important aspect of their program. Accordingly, they have adopted a "Factory Safety Policy” to clarify our expectations of all suppliers to honour our commitment to worker safety. In addition, we support the major initiative supporting Bangladesh Worker Safety: The Accord on Fire and Building Safety in Bangladesh. Beyond these efforts, Fruit of the Loom is a signatory to the Apparel & Footwear Industry Commitment to Responsible Recruitment to join the industry to address potential forced labor risks with regards to migrant workers, and we are committed to be in full alignment with the Transparency Pledge with respect to our Supply Chain. "

      The Baby Factory

      NZ's leading specialist in babywear and nursery furniture serving NZ with 25 nationwide stores and a matching online shopping service for over 25 years. Thy are proud to be a family run business owned in New Zealand that employs more than 200 New Zealanders. Even so, they refused to participate, and this is their explanation.

      "Because we are such a small company operating in predominantly one small market (NZ), and our clothing volumes are small, we only use overseas and local agents to source our clothing, which comes predominantly from China . Manufacturers do not wish to deal with us directly because of the small MOQ’s we use. We are therefore unable to obtain the information you have requested."

      2018's Ethical Fashion Report was downloaded over 50,000 times. The 2019 report is expected to hit an even larger audience, as the report can also be read quick and easy via the mobile app ' End Poverty' published by Baptist World Aid.

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