INTHEBLACK February 2025 - Magazine - Page 28
F E AT U R E
ESG initiatives, such as transitioning to
sustainable materials, enhancing production
processes and conducting supplier audits.
These initiatives often come with higher
initial costs, but they are crucial for
long-term success,” she says.
The installation of solar panels at the
Lorna Jane head office in 2015 naturally
required an initial investment, but has since
significantly reduced energy costs over time
by lowering reliance on non-renewable
energy, says Hochmuth.
It not only provides reductions in cost,
it gives the brand a tangible way to show
its commitment to sustainability, she says.
“We show stakeholders that sustainable
practices build brand loyalty, as more
consumers are prioritising environmentally
responsible brands. These practices also
reduce long-term risks by ensuring
compliance with regulations and creating
more resilient operations — which ultimately
support profitability,” she says.
Lorna Jane also requires suppliers to
provide annual ethical audits, which allows
the business to monitor risks related
to labour practices, environmental impact
and governance across the supply chain.
“We use Fair Supply [an ESG risk
management and compliance company]
for carbon accounting and managing our
non-trade procurement suppliers, helping
us track and reduce our carbon footprint.
In addition, we report under Australia’s
Modern Slavery Act 2018, which ensures
we have a due diligence process in place
to identify and address any potential risks
of exploitation in our supply chains,” she says.
Finance professionals are in a unique
position to help their clients identify elements
of a supply chain that may indicate unsafe
work practices and exploitation, adds Reilly.
“Accountants and financial professionals
can play a role in identifying potential
exploitation by scrutinising the feasibility
of very low garment prices in their clients’
financial data, for example,” she says.
“One of the guiding tools that they have,
to try and understand whether a garment
can be made for a certain cost, is the
value volume. If it is a low price, then it’s
an indicator that there might be some
exploitative labour conditions or ‘invisible
people’ in the supply chain.” ■
28 INTHEBLACK February 2025
HOLDING BRANDS TO ACCOUNT
Labour issues are not limited to developing countries.
There can also be labour and workplace issues in companies
operating in Australia and other developed nations.
Rachel Reilly, national manager of Ethical Clothing
Australia (ECA), notes that their accreditation program helps
businesses understand and comply with existing Australian
labour laws “which can be complex due to multi-layered
clothing supply chains. This includes identifying ‘outworkers’ —
often migrant women working from home — who are at risk
of exploitation,” she says.
Katherine Halliday, advocacy coordinator at Baptist World
Aid and researcher on the biennial Ethical Fashion Guide,
says holding brands to account publically is another way of
raising awareness of the poverty vulnerable fashion-industry
workers may live in.
Halliday notes that the guide aims to move the needle
on supply chain practices by working with companies and
equipping consumers with detailed assessments of various
fashion brands.
“Ultimately, companies will be driven by their bottom line
and its consumers' choices about whether they shop with
a certain brand or not. These factors will drive how
committed a company is to making progress,” she says.
The guide ranks over 450 major fashion brands in
Australia with a score out of 100, rating them on criteria
such as labour rights, environmental impact and supplier
engagement, helping consumers make informed choices
about their clothing purchases and speak out to their
favourite brands.
“We do believe that by giving global citizens the
company scores, we're able to amplify the voices of
everyday Australians who say that we do care about
a company's purchasing practices and it does affect
where we choose to shop,” she says.
READ
UPSKILL
LISTEN
an article about how
Gen Z refashioned
“business casual”
with CPA Australia’s
ESG Reporting and
Disclosure course
to this story
