Consumers are ramping up the pressure on fashion brands to ethically make clothes, resulting in a slow but significant shift across the industry, a report has revealed.
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More than a third of brands have improved their rating since last year, according to the latest Baptist World Aid report.
But paying a living wage to workers continues to be a huge challenge for retailers, with only five per cent of companies proving they were doing so at their final stages of production.
The sixth Ethical Fashion Report, released on Wednesday, graded 130 apparel companies, including 480 brands, from A+ to F on their policies, transparency, worker rights and environmental management.
Using this system, the 2019 report pegged Australia's best and worst performers alongside international brands, with Etiko, Outland Denim, Kookai, Cotton On and Country Road among those handed an A- or above.
So-called poor Australian performers included the Noni B Group, which owns brands such as Katies and Miller, swimwear company Tigerlily and discount clothing store Lowes.
In the past, some retailers - many of which have external auditors - have challenged the ranking system because it's based on information submitted by participating companies and Baptist World Aid does not conduct site inspections to verify details.
For example, the April 2019 dated audit by Bureau Veritas of Tigerlily's 28 manufacturing partners, published on the retailer's website, showed all are signatories to a code of ethical trade and 26 are ethically certified, with certifications for the final two pending by 2020.
Baptist World Aid CEO John Hickey says overall fashion companies have felt the pressure from consumers since the first report was released in 2013.
"People want to know they're not doing harm in what they're purchasing," he told AAP.
Last year there were 50,000 downloads of the organisation's ethical shopping guide, and thousands of others viewed the website and printed versions.
This year, the guide will be available through an app for the first time.
Governments are also turning up the heat through legislation.
Mr Hickey said the Modern Slavery Act, introduced on January 1, would make "waves" across the Australian fashion industry, which was worth close to $23.5 billion last year.
"The beginning of the supply chain is where the risk of child labour, forced labour and exploitation is most prevalent," he said.
The report revealed fashion brands rated most poorly on "worker empowerment", with a median D grade for this section of the report.
Nearly half of companies (48 per cent) had started to develop a living wage methodology, while 14 per cent of companies have projects to improve wages in the majority of factories, the report said.
Tanya Deans, Brand Manager at BONDS and its owner Hanesbrands, says working with third parties in the supply chain was one of the biggest challenges when aiming for ethics and sustainability.
Ms Deans said the company had scored an A partly because it owned a significant proportion of its manufacturing.
"If we own it, we can control workers rights in that process," she said.
While the company admits it's not perfect, Ms Deans said it was making a genuine effort to improve.
Some changes have come faster than others, with the company making big inroads in environmental sustainability by reducing greenhouse gases and water use, saving $10 million and reinvesting in local communities, Ms Deans said.
Australian Associated Press
