Behind the Barcode is a series of industry reports which seek to empower consumers to purchase ethically and, by doing so, encourage companies to ensure workers are protected and not harmed; that they are rewarded and not exploited; and that they can work free from the tyranny of modern slavery.
One of these industry reports is the Ethical Fashion Report. It is released with an accompanying Ethical Fashion Guide. The research published in the 2018 Ethical Fashion Report grades 114 fashion companies and 407 brands operating in Australia and around the world, and assesses the systems they have in place to protect the workers in their supply chain from exploitation, forced labour and child labour.
The grades awarded in the report are a measure of the efforts undertaken by each company to mitigate the risks of forced labour, child labour, and worker exploitation throughout their supply chains. Higher grades correspond to companies with a labour rights management system that, if implemented well, should reduce the risk and extent of worker exploitation in the production of that company’s products. That is, companies with the best grades (A and A+) are those companies that have a strong code of conduct, are investing substantially in knowing who their suppliers are, and are actively monitoring and building relationships with those suppliers to ensure adherence to their code of conduct. These companies are also actively seeking to empower workers and taking active measures to ensure that their workers are receiving a living wage. In combination, these steps substantially reduce the risks of slavery and exploitation. Low graded companies are those that are not taking these initiatives or, if they are, have chosen not to disclose it.
It is important to note that a high grade does not mean that a company has a supply chain which is free from exploitation. Rather, it is an indicator of the efforts the company is undertaking and the strength of its systems to reduce the risk of exploitation. Furthermore, The Report’s grading methodology is designed to spread companies out along an A-F continuum based on the relative strength of their efforts, similar to awarding grades on a bell curve (i.e. best performers receiving A’s, worst receiving F’s and many in the middle). It is also worth noting that we do not do site inspections of suppliers and production facilities and, in some instances, we have relied on audit data provided to us by companies to verify conditions and benefits that workers receive.
The grades awarded in this report are a measure of the efforts undertaken by each company to mitigate the risks of forced labour, child labour and worker exploitation throughout their supply chains. Higher grades correspond to companies with a labour rights management system that, if implemented well, should reduce the risk and extent of worker exploitation in the production of that company’s products.
These grades are derived from research undertaken by Baptist World Aid Australia and TearFund New Zealand, and published in The Ethical Fashion Report.
Our research team assesses 33 specific criteria about each company’s labour rights management system. These assessments look at three critical stages of the supply chain as a proxy for the entire supply chain: raw materials, inputs production and final manufacturing. The questions are divided into four sections:
The grades in this year’s report are not directly comparable to past reports. This year’s survey tool asked new questions, removed some old questions and tweaked others. In addition to this, as part of this year’s research process, companies were provided with an Assessment Support Document. The Assessment Support Document acted as a helpful guide for companies, including a rationale for each survey question and several examples of what constitutes a strong labour rights system. The Assessment Support Documents also detailed the validation requirements necessary for demonstrating that systems or policies asserted by companies to be in place, were, indeed, in place. In several instances, the level of supporting documentation or validation requested was greater than in previous reports. Additionally, in a few instances, the threshold necessary to receive credit for a question was increased.
The result of this year’s changes is more robust data and, importantly, a survey tool that is in-line with prevailing best practice across the global fashion industry. However, it has also meant that the rating of some companies (that, in previous years, would have been awarded at least partial credit for these survey responses) has been impacted.
Our research team asks companies for evidence that they are paying workers a living wage. A living wage is defined as a wage sufficient to support all the basic needs of a worker and his or her dependents with some money left over for discretionary spending and saving for emergencies. This amount varies between country and city. The legal minimum wage in many countries is not sufficient for all basic needs and leaves many workers trapped in a cycle of poverty.
Companies are asked to provide a audit reports demonstrating that the wages being paid to entry level workers are consistent with a living wage, as benchmarked against an adequate living wage methodology.
This is a break from past report, where partial credit was given to companies that could demonstrate that wages being paid were substantially above legal minimums.
In conducting a company evaluation, The Research Team assesses a company’s own publications alongside any relevant independent reports and data. The Research Team sends its findings — marked against the assessment criteria — to the company for comment and further input, which is reviewed in turn. For those companies that are non-responsive initially, our research team commits to engaging them through the use of at least three different mediums (e.g. letters, phone calls and emails), it also sends them the final assessment, allowing companies an opportunity to respond. In the majority of instances where companies don’t respond, it’s because they have chosen not to.
Baptist World Aid Australia believes that it’s important that we grade companies even when they do not respond to the research process. If companies haven’t been transparent about what they are doing to uphold worker rights, then there is virtually no avenue for the public to feel confident that their products are being made in a way that is free of exploitation.
Both the report and the guide highlight the companies which haven’t responded to our research team by marking them with an asterisks. We welcome their engagement for our future research.
Baptist World Aid Australia is committed to working productively with companies in order to let the public know what they are doing to uphold worker rights and to help them take further action on this critical issue. Our research team is always interested in hearing more about what activities companies have engaged in to address exploitation, and often shares these stories with supporters of the Ethical Fashion Report.
Many companies have a wide array of brands or, in some cases, separate corporate entities that are held by their company structure. Several department store companies (like David Jones) will have a variety of arrangements with the brands stocked by their stores – including private label, exclusive brands, and non-exclusive brands. In such circumstances, our grading process only considers those brands that are owned or exclusively distributed by these department stores. This can mean that, in the case of some department stores, our grading will only apply to a small portion of what they retail.
Where companies have separate corporate entities or brands that use differing labour rights systems, then we grade them separately (wherever this has been indicated to us). Kmart Australia, Coles, and Target Australia for instance, all have separate grades despite being part of the one parent company: Wesfarmers.
We also encourage you to write to the companies included in the guide and directly inform them that you are a customer who would like to see them guarantee the workers in their supply chain a living wage. Use our letter writing templates to contact the brands you love. Encourage the report’s best performers and thank them for their efforts. Call on those who received a C grade or lower to do more to protect the workers in their supply chain. Your voice can be a catalyst for change!
Learn more, read our set of three fashion industry factsheets. Each factsheet highlights a stage of the supply chain (raw materials, inputs and final stage production), along with a current labour exploitation issue that is affecting the fashion industry in Uzbekistan, India and Bangladesh.
The latest edition of the Ethical Fashion Report grades 407 fashion brands on the systems they have in place to mitigate the risk of slavery in their supply chains.