Ethical practices in Australian fashion industry stalling, report finds

Sustainable and ethical practice within the Australian fashion industry has stalled and is at risk of falling behind, a report has found.

Baptist World Aid's Ethical Fashion Report analyses 500 brands across 48 different measures including governance, supply-chain tracing, supplier relationships, worker empowerment and environmental sustainability.

The 11th edition of the report, released today, found on average that brands scored 31.5 points out of a possible 100, representing an 0.2 per cent improvement from 2024.

Baptist World Aid ethical fashion lead Katherine Halliday said brands were failing to follow through on supply chain improvements.

"Over the lifetime of the report, we've seen that fashion companies are getting better at setting policies and outlining their commitments for ethical practice, but they're falling short of really implementing those to make change for the workers," she said.

The report found 93 per cent of companies had policies for workers' rights and sustainability but many lacked visibility beyond direct suppliers.

Ms Halliday said brand transparency was improving thanks to growing consumer awareness and modern slavery legislation, but it was not reaching the areas that were the most impactful for workers, such as living wages or the ability to advocate for workers' rights.

"We know that almost no garment worker in the supply chain is being paid a living wage. And that's not a luxury. It's just enough to make ends meet," she said.

The report found while some companies offered grievance mechanisms, these were only accessible to 20 per cent of workers at less than a quarter of the brands.

Luxury and fast fashion rank similarly

Outdoor and technical brands were among the highest ranked by the report, including Patagonia, which scored 70 points.

Ms Halliday said the sector had performed well for some time.

"I'm really heartened when those brands that look environmental and ethical can actually back it up with strong certified material use and strong supply chain practices," she said.

Ms Halliday encouraged shoppers to check the ethical fashion guide rather than rely on a brand's image.

Despite vast price differences, the report found luxury and premium brands (38.63), on average, only scored marginally better than fast fashion brands (37.91).

Thirty-eight per cent of brands used sustainable fibres, which was an improvement from 30 per cent in 2024.

But the report found the overall rise in fibre production, particularly petroleum-based synthetics, outpaced any environmental benefits of the materials used.

Harriette Richards, from RMIT University's School of Fashion and Textiles, said it was difficult for fast fashion brands to be considered truly sustainable, based on the volume of production alone.

She said use of natural or recycled fibres did not mean a garment was built to last and could also leave questions about how the fibres were made.

"I think it can sometimes be used, dare I say it, as a greenwashing tactic, or as simply a distraction from some of the other more complicated issues that are at play when it comes to mass production," Dr Richards said.

Seven per cent of brands received a perfect score for responsible purchasing practices, a criteria assessed on whether brands conducted business in a way that enabled their suppliers to act ethically.

Ms Halliday said a brand might have a code of conduct that asked suppliers not to make workers do overtime, but then undermine that by setting short timelines or having "a lot of pressure in turnaround and the pricing negotiations".

Dr Richards said deadlines set by Australian brands could put expectations on offshore producers that they could fulfil, so they had to pass the work on to subcontractors operating under unethical conditions.

"There's this real, like, trickle-on effect, just by someone saying, 'I need this order by this date,'" she said.

What needs to be done to improve fashion ethics?

To improve the industry's performance further, Ms Halliday would like to see the Modern Slavery Act strengthened.

"What we need to move to now is building in due diligence to that Modern Slavery Act that is requiring action rather than just requiring reporting," she said.

Dr Richards agreed that governments and consumers needed to take "collective responsibility" for driving improvements, as businesses might not other have the will to change.

"It's the consumers who can do things to put pressure on businesses, to say, 'We're not going to buy from you if we know that you're producing unethically,'" she said.

"If that's not working, then it's up to governments to say, 'This is not on, this is not the sort of product that we want to bring into the country.'"

A spokesperson for activewear brand Lorna Jane, which had the largest improvement between 2024 and 2026, said the industry needed to move away from the idea brands needed to solve these challenges independently.

"Many fashion brands share the same suppliers, operate within the same manufacturing regions and face similar challenges around living wages, working conditions and worker representation. Yet too often, we're approaching these issues in isolation," the spokesperson said.

Waste, circularity and recycling have been a major focus of sustainability in the fashion sector, but Dr Richards cautioned that it may be "slightly misplaced".

"Textile recycling is in such a nascent phase and it is unclear whether it's ever actually going to fulfil what it says that it's going to be able to do," she said.

"I think we need to be taking responsibility for what we're importing into the country in the first place."