Australia’s Retail Apparel Group - the parent company of YD, Connor and Tarocash - has led the largest overall improvement in ethical and sustainable practices over the last two years.
This is according to Baptist World Aid’s 2024 Ethical Fashion Report, which also shows that despite double-digit improvements for 10 leading brands, only two of the total 120 fashion companies assessed pay a living wage at final-stage factories.
The 2024 report assessed 120 companies representing 460 brands in Australia and found an average score of 31 out of 100, an increase of just two per cent in two years since the 2022 report.
The report analysed six key issues in fashion supply chains: responsible purchasing practices, addressing gender inequality, payment of living wages, water stewardship, use of sustainable fibres and circularity.
Narrowly surpassing activewear brand Lorna Jane, RAG’s lift of 20.5 points to 55 pushed the company into the top 20 per cent of brands that are the most ethical when it comes to its suppliers and their workers and overall sustainability.
Lorna Jane lifted 20.3 points, hitting the top 40 per cent with a score of 40, followed by Munro Footwear Group with a boost of 18.9 points to 36.7.
R.M.Williams came fourth with a lift of 16.1 points, hitting 49.2, with Universal Store up 15.6 points to 37.
The rest of the top ten most improved in order include Sussan Group (up 15.2 points), JD Sports (up 14.7 points), Factory X (up 13.7 points), Zimmermann (up 13.5 points) and Rodd & Gunn (up 10.5 points).
Baptist World Aid added that it is encouraging to see that the average score of brands who have continued to participate in the research since 2022 saw a 12-point increase.
However, the non-profit organisation reported that the overall picture is concerning, with the report also showing that 89 per cent of brands fail to pay garment workers a living wage at any part of their supply chain and most are lacking policies for responsible purchasing and gender equality.
Baptist World Aid’s report also found that fashion companies have higher average scores than footwear businesses.
Meanwhile, just over half of companies assessed (51 per cent) lack a policy or strategy to address gender inequality at production facilities.
A slim majority of 52 per cent use sustainable fibres in less than 25 per cent of their products, with some using none.
And only a third (35 per cent) have a responsible purchasing practices policy and strategy.
“As we release our 10th Edition Ethical Fashion Report on the Day for the Eradication of Poverty, it's alarming to see that only two companies are paying a living wage at all final-stage facilities,” Baptist World Aid advocacy specialist Gina Snodgrass said.
“It’s time to call on companies to play their part and take meaningful action to ensure all workers in their supply chains earn enough to meet their family’s basic needs.
“We hope our engagement with companies has helped highlight the areas where progress could be easily achieved, especially where some brands’ efforts remain lacklustre. As fashion companies generally prioritise profit and the demands of production, addressing these critical issues can often take a backseat.”
Among the top-scoring companies, Australian innerwear brand Mighty Good Basics leads the way with a score of 90, followed by Patagonia (69), Rodd & Gunn (68), Inditex (66), Hanesbrand (65), Adidas (63), Puma (61), Forever New (60), KMD Brand (60), New Balance (60), Kmart and Target (58) and Lululemon (58).
“In today’s cost-of-living crisis, many consumers are justifying cheaper fashion purchases, while some companies are choosing to cut back on their ESG initiatives,” Baptist World Aid advocacy coordinator Kat Halliday said.
“But these choices come at a significant cost - particularly for workers in garment-producing regions, where low wages further exacerbate their already precarious conditions.”
Halliday said companies are only improving at a rate of one per cent per year, indicating that it will take 69 years for most fashion companies to hit 100.
“They must accelerate their progress - not just for the millions of workers facing unsafe and forced labour conditions daily, or the environment suffering from pollution and overproduction, but also to meet their own ESG targets.”