Fast-Fashion Retailer Shein Surpasses Australian Retailers in Ethical Practices, Report Finds

Online fast-fashion retailer Shein is outperforming several prominent Australian retailers in terms of ethical standards, according to a new industry assessment.

The 11th Baptist World Aid ethical fashion report, released on Tuesday, evaluated the ethical practices of 138 Australian and international companies, representing 543 fashion brands.

The report revealed that only 13% of surveyed fashion companies could demonstrate evidence of paying a living wage to workers in their supply chains.

Baptist World Aid assesses companies across five key supply chain areas, including worker empowerment and environmental sustainability, assigning each brand a score out of 100.

Shein received a score of 28 in the latest evaluation.

The Chinese e-commerce giant has faced criticism for its environmental footprint and allegations of promoting overconsumption through extremely low pricing strategies.

The Baptist World Aid report highlights that Australia leads the world in per-capita textile consumption, with over 200,000 tonnes of clothing discarded annually.

“Overproduction continues to pose significant challenges for sustainable fashion,” the report stated.

Despite scoring below the average of 31.5, Shein outperformed major retailers such as Myer, Windsor Smith, Ghanda, and Quiksilver owner Boardriders.

Ghanda and Windsor Smith received the lowest possible scores of zero, while Temu, another Chinese e-commerce platform and Shein competitor, also scored zero.

Swimwear brand Seafolly earned a score of one, activewear manufacturer 2XU received two, and Boardriders—which owns Roxy and Billabong—along with Bec and Bridge both scored three.

Myer achieved a score of 20 for its retail operations and apparel division.

This year’s report noted that Shein provided additional information to Baptist World Aid, whereas Myer, Seafolly, Ghanda, Windsor Smith, Boardriders, 2XU, and Bec and Bridge did not respond.

Companies that did not participate were evaluated solely based on publicly available information, which typically results in lower rankings.

Baptist World Aid emphasized its thorough engagement process, ensuring companies were aware of their inclusion in the research and given opportunities to participate.

“Our researchers conduct extensive outreach throughout the 13-month evaluation period, contacting companies via email approximately 16 times, including when sharing final scores,” said a Baptist World Aid spokesperson.

More than half of the evaluated companies failed to respond to researchers, with 58% assessed only on publicly available data compared to 42% that provided additional information.

Critics of sustainability reports like Baptist World Aid’s argue that focusing on living wages can sometimes benefit international fast-fashion brands over local retailers.

Companies were scored on their efforts to protect workers and the environment across their entire supply chain, from raw material sourcing to garment manufacturing.

The highest-scoring brands demonstrated comprehensive practices, including factory audits, worker rights training programs, and environmental impact assessments of their primary materials.

Katherine Halliday, Baptist World Aid’s ethical fashion lead, defended the methodology and noted that some companies simply have a greater willingness to embrace transparency.

“This report aims to answer a critical question: ‘How robust are a company’s systems for preventing worker exploitation throughout their supply chain?'” she explained.

Halliday expressed encouragement that Shein’s score had improved from previous years, attributing the progress to increased public scrutiny driving operational changes.

The evaluation was based on over 15,000 data points gathered through analysis of company policies, practices, and performance metrics.

Denim brands, intimate apparel manufacturers, outdoor and technical performance gear producers, and select luxury labels performed well in this year’s assessment.

Australian underwear brand Mighty Good Basics achieved the highest score of 94, though the report classified the brand as an “outlier” in the dataset.

“Everyone still has considerable room for improvement,” Halliday acknowledged.

Since the previous report in 2024, average industry scores have improved by only 0.2%.

Halliday observed that while more companies have pledged to enhance their ethical standards, these commitments have not yet translated into meaningful outcomes for workers.

“Simply producing a modern slavery statement isn’t sufficient to create real change in these practices,” she noted.

The stagnant scores indicate a need for stronger governmental mandates to compel fashion companies to implement substantive improvements, according to Halliday.

Temu responded to its zero score by stating that all sellers must comply with a third-party code of conduct prohibiting forced, penal, or child labor while ensuring adherence to wage regulations and safe working conditions.

Guardian Australia has reached out to the companies mentioned in this article for comment.

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