Modern Slavery Exists: Is Your Business at Risk?
Modern slavery is often discussed as a supply chain problem that happens somewhere far away. But the truth is modern slavery is happening at home too. In fact, Walk Free’s Global Slavery Index estimates that around 41,000 people are living in modern slavery in Australia. While Walk Free notes that nearly two thirds of forced labour cases are linked to global supply chains, modern slavery can also occur in Australia through domestic labour arrangements, temporary migrant workforces, and contracted services. In other words, modern slavery in Australia can affect the people who make, move, clean, package, pick, process, and provide the goods and services that flow through everyday business activity. Australia’s Modern Slavery Act 2018 has helped bring these risks into view. It requires businesses and other entities operating in Australia with annual consolidated revenue of at least $100 million to prepare an annual Modern Slavery Statement that describes how they identify and address modern slavery risks in their operations and supply chains. Monash Centre for Financial Studies’ Modern Slavery Disclosure Quality Ratings: ASX100 Companies Update 2025, published in December 2025, reviewed FY2024 Modern Slavery Statements from ASX100 companies. It found that a clear divide remains between companies showing leadership and those still taking a minimal compliance approach. That divide matters. A Modern Slavery Statement is not just a reporting obligation. It is a public signal of how seriously an organisation understands risk, governance, accountability, and human rights. The next test for Australian businesses is not whether they can produce a statement. It is whether the systems behind that statement are strong enough to find risk, act on it, and show credible progress over time. Modern slavery in Australia is not only an offshore issue At home, modern slavery risk can sit in local labour arrangements, contracted services, temporary migrant workforces, and industries where vulnerable workers may have limited power to speak up. Walk Free identifies domestic forced labour risks in sectors including agriculture, construction, domestic work, meat processing, cleaning, hospitality, and food services, many of which rely on migrant workers entering Australia on temporary visas. As such, modern slavery risk is not something that can be pushed to the far end of an overseas supply chain. It may sit closer to the organisation in domestic labour hire or supplier relationships that have not been examined closely enough. That makes the Modern Slavery Statement more than a disclosure document. It becomes a test of whether the organisation has the visibility and governance to recognise risk before harm is hidden in plain sight. Why compliance is only the starting point An annual Modern Slavery Statement must describe the actions the organisation is taking to assess and address modern slavery risks in its operations and supply chains. The Australian Government publishes these statements on the Modern Slavery Statements Register. A Modern Slavery Statement should give stakeholders a clear view of how an organisation is identifying and addressing risk across areas such as: The legal requirement matters, but compliance is only the starting point. Modern slavery reporting now sits in a broader accountability environment. Boards, executives, procurement teams, sustainability leaders, risk teams, and governance stakeholders are expected to understand not only what the law requires, but how modern slavery risk is being managed in practice. This means a stronger statement cannot be built from better wording alone. It needs to reflect stronger systems. Where Australian businesses still need to improve The Monash Modern Slavery Disclosure Quality Ratings show that many companies have improved their reporting. It also shows that progress remains uneven. The report identifies several recurring weaknesses in low-scoring statements. These include: Supply chain visibility remains one of the most persistent gaps. Monash found that only 52 per cent of reviewed statements described supply chains beyond Tier 1 suppliers – the direct suppliers an organisation buys from or contracts with – in FY2024. That is a significant issue because modern slavery risks often sit deeper in the supply chain. If an organisation only understands its direct Tier 1 suppliers, it may miss risks linked to subcontracting, labour hire, raw materials, high-risk geographies, or outsourced production. The lesson is not that every organisation must have perfect visibility immediately. The lesson is that stakeholders are increasingly looking for evidence of maturity. They want to see whether companies are mapping risk, engaging suppliers, strengthening governance, improving reporting systems, and measuring whether their actions are working. The gap is no longer just between organisations that report and those that do not. It is between organisations that treat the statement as an annual compliance document and those that treat it as evidence of an evolving risk management system. The modern slavery reform conversation The reform conversation has been building since a statutory review of the Modern Slavery Act, which examined the first three years of the Act’s operation and was tabled in Parliament in May 2023. Led by Professor John McMillan AO, the review made 30 recommendations to strengthen the regime, including introducing penalties for non-compliance, lowering the reporting threshold from $100 million to $50 million, requiring entities to report on modern slavery incidents or risks, and requiring entities to have a due diligence system in place. The Australian Government released its response in December 2024, agreeing in full, in part, or in principle to 25 of the 30 recommendations. Those reforms are not yet all in force. But they show the direction of travel: stronger expectations, closer scrutiny, and a shift from disclosure alone toward due diligence and accountability. The arrival of Australia’s first national Anti-Slavery Commissioner also changes the context. Chris Evans, who began his five-year term as the inaugural Australian Anti-Slavery Commissioner in December 2024, has said high-quality reporting is only the first step and must be coupled with action. What better looks like and why the bar is rising Better modern slavery reporting starts before the statement is written. It begins with clearer governance, better supply chain mapping, stronger supplier engagement, and more disciplined risk assessment. It also requires practical systems that
Case Study: Lion B Corp
About Lion LION is a leading beverages company with powerhouse brands headquartered in Sydney, Australia, and founded in New Zealand. From iconic classic and craft beers to innovative ready-to-drink offerings, exceptional spirits, remarkable wines and more – LION’s brands have been shaping culture for more than 180 years. Proudly part of global company KIRIN, LION is focused on becoming an unrivalled Force for Growth and Force for Good. Our diverse portfolio of iconic brands includes Hahn, Steinlager, Stone & Wood, Speight’s, XXXX, Tooheys, KIRIN Ichiban, KIRIN Hyoketsu, Mac’s, Panhead, Emerson’s, James Squire and Little Creatures. LION also has an enviable portfolio of New Zealand wine brands; a craft spirits distribution arm in Australia in Vanguard Luxury Brands and Yarra Valley-based Four Pillars Gin. We employ more than 2500 people across our network of iconic breweries and other operations in Australia and New Zealand. www.lionco.com The Challenge LION saw B Corp certification as an opportunity to demonstrate its whole-of-business commitment to sustainability and independently validate the positive impact already being delivered by the organisation. The challenge was achieving certification with proof that its practices are credible, embedded and at scale across the organisation. The process required capturing and evidencing the good business that LION was already doing to be certified. The Solution Becoming a B Corp was closely aligned with LION’s Force for Good ambition, providing an independent, globally recognised framework to validate impact performance and strengthen accountability. With strong foundations already in place, the challenge for LION was to use the certification framework to assess the maturity and strength of its practices and identify areas for improvement, as part of its commitment to drive progress and continuous improvement in its ESG practices and principles. The Approach We supported LION through the B Corp Business Impact Assessment (BIA) to optimise their points by mapping requirements translated into practical, business-ready actions aligned with LION’s purpose, and by implementing and embedding their mature ESG practices into robust evidence ready for B Corp submission. A core element of the project was highlighting the organisation’s commitment to implementing measurable, verifiable practices at scale. This included strong governance principles, strategies, and systems for managing its environmental and social impacts. The project also leveraged compelling examples of impact-driven innovation within the portfolio, including Stone & Wood’s systems-based approach to sustainability, which features regenerative agriculture partnerships and practices that demonstrate how certified-sustainable sourcing can reduce footprint and create additional value for communities and ecosystems. The Deliverables We worked alongside LION to confirm strengths, create evidence for impact practices and identify where existing initiatives could be better defined and measured when seen through a B Corp lens. The deliverables included: Baseline Score established with actions required to achieve certification Target Score identified with detailed underlying action plan delivered for achieving the score ESG Leadership Strengths identified, through the Impact Business Model identification process Comprehensive Action List delivered, enabling LION team to move seamlessly into the implementation phase High Level Implementation Roadmap delivered through co-design for the LION team to have a clear view into the timeline for the submission milestone Internal and External Expertise identified, for any key implementation actions that require specialised or technical skills Stakeholder Engagement Opportunities identified, with broader strategic goals and included engaging teams across the business who have become leaders in continuing improvement plans Support in identifying and completing action items for submission Evidence checking to B Lab requirements and standards LION’s major ESG pillars identified for ESG storytelling Support through the verification process to defend points The Results LION achieved certification demonstrating strong performance across the assessment and reinforcing its whole-of-business sustainability commitment through an independent, globally recognised standard. Achieving certification at this level is particularly significant for a large and complex organisation, where meeting B Lab’s rigorous standards requires consistent policies, controls and evidence across multiple business units, sites and functions. LION’s highest scoring impact areas were Workers, Environment and Community, reflecting mature systems and policies, strong people and community outcomes, and a clear commitment to making a measurable impact at scale. While the certification is fresh, interest and engagement is high, and LION has begun preparing for recertification under the new standards. Starting early is delivering clear benefits, including: Using the momentum of recent certification to drive continuous improvement rather than losing pace after the milestone. Allowing time to identify and sequence changes in a way that can be embedded through controlled planning for costs and resources, and aligned with other strategic initiatives. Leveraging the Year 0, Year 3 and Year 5 improvement deliverables to drive, shape and influence LION’s broader ESG strategic roadmap. By treating B Corp as an ongoing framework, LION is positioning certification not only as a mark of credibility, but as a structured pathway for sustained impact improvement at scale. Client Testimonial “The Growth Activists have been a trusted partner in our certification journey. LION initially partnered with The Growth Activists to help us navigate the Standard and its requirements and establish a clear action plan that made certification under Standard v1.6 possible. Post certification, we have continued our partnership with The Growth Activists to understand the Requirements of the new Standard 2.1 and the program of continuous improvement required to re-certify in 2028.” Rebecca Loch, LION Sustainability Leader
ESG in 2026: The 5 things you need to get right
ESG is noisy right now. Not because it is going away, but because it is growing up. The expectations are sharpening. The commercial stakes are rising. And the work is moving from sustainability teams into finance, risk, procurement, operations and the boardroom. Here we unpack the five priorities shaping ESG in 2026, and the moves organisations can make now to stay ahead. Economic Essentials The economic case has shifted. The question leaders are asking is no longer what is the cost of transition. It is what is the cost of delay. Deloitte Access Economics modelling shows that transitioning to net zero by 2050 adds $435 billion to Australia’s GDP^. The same modelling cites a $370 billion GDP boost under a 75% emissions reduction target by 2035, with Australia $500 billion better off by 2050. Then there is the capital signal. Responsible investment and sustainable finance are scaling quickly. Current estimates are that the sustainable finance market was about USD 754 billion in 2024 and could reach about USD 2.59 trillion by 2030*, with around 23% annual growth through 2030. What it means is simple. Capital is increasingly pricing performance, not promises. What to do now Regulation Rising Mandatory reporting is not just more work. It is a reset of accountability. Sustainability reporting is already mainstream for the world’s largest companies, with 96% of the G250 reporting, and more than 300 new global regulations introduced since 2019. The direction of travel is clear, even as some jurisdictions adjust timelines and scope. In Australia, mandatory climate reporting under the Corporations Act commenced from 1 January 2025 for the largest organisations, with a phased rollout beginning with $500 million plus entities as the first cohort. The hardest part is not finding the data. It is building governance and capability so disclosures are credible, consistent and ready for assurance. What to do now Systemic Synthesis Fragmented ESG activity will not survive 2026. Systems will. Only 6% of businesses have full traceability in their supply chains. That means most organisations still do not have clear visibility into what is happening at the start of their value chain. At the same time, procurement is tightening. 81% of global trade professionals now use ESG criteria as a primary filter when selecting suppliers. ESG data is becoming a gatekeeper for revenue. This is why the concept of systemic synthesis matters. Instead of collecting ESG data in fragments for different demands, organisations need to stitch it into a single intelligence system that can serve multiple needs across reporting, due diligence, procurement, customer transparency and innovation. Digital Product Passports are one clear example of where this is heading. They have been scheduled to become mandatory in the EU for batteries and textiles from 2027, moving provenance from static documentation to machine readable cradle to grave transparency. They also open circular opportunities like resale authentication, repair enablement and even royalties on second hand transactions. What to do now Value Velocity This is where ESG flips from defence to growth. 2026 is a tipping point where ESG must move from cost of compliance to a rapid driver of value. Market leaders are using sustainability as a performance engine, strengthening enterprise value, winning procurement, and building trust that translates into commercial momentum. Governance maturity is part of the valuation signal now. Recent evidence proves that two thirds of dealmakers pay premiums~ for strong ESG governance, with valuation uplifts of up to 10% when governance resilience can be proven. This is why we challenge teams to do more than report. We want ESG to be embedded and bankable, and we want it to show up in how the business is run. What to do now Transformative Tech AI can be a strategic enabler for ESG. It can process large datasets, support real time monitoring, and make Scope 3 work more manageable. It can also free teams from retrospective reporting so they can spend more time on strategy and transformation. But AI only helps if governance leads. Setting up the guardrails that matter most: accuracy, data ethics and ownership, bias, auditability, and the energy-consumption realities of advanced technology in the context of decarbonisation goals. The opportunity is real. The risk is also real. The organisations that lead will treat AI as part of ESG governance, not separate from it. What to do now Capability is the multiplier ESG training is still fragmented, especially for people outside finance. If you want ESG to stick, build capability across finance, procurement, operations, marketing and sales, not only within the sustainability team. If 2026 is the year ESG becomes normal business, the work is not doing more. It is doing it smarter, with stronger governance, better systems, and clearer value. Contact us to find out what this might look like for your organisation.
Case Study: Refuture Foundation
About SCRGroup / Refuture Foundation SCRgroup is a leader in the recovery of unwanted clothing, diverting clothing from landfill and giving garments a second life in local and global communities. Every day, SCRgroup collects a kilogram of unwanted clothing across Australia. They are a certified B Corp and partner with organisations that create jobs and strengthen communities. This includes employment pathways through Australian Disability Enterprises and support for charities such as Lifeline and The Smith Family. Giving back is built into how SCRgroup operates. The Challenge In late 2023, SCRgroup visited Ghana and Kenya to understand on the ground outcomes of secondhand clothing flows. They saw thriving micro businesses supported by the trade, alongside the reality of garments arriving that cannot be sold and end up as waste. The experience highlighted a critical issue: meaningful change requires transparency and responsible practices across every step of the supply chain, from shipping and sorting through to trading and end-of-life outcomes. At the same time, SCRgroup set out to build a Foundation to deliver measurable social impact. The challenge was turning that ambition into a clear strategy, a strong identity, and an operating model built for real outcomes. The Approach The approach involved identifying the priority initiatives that could accelerate growth for the Foundation with strategic planning being the first step. Together we focused on where Refuture could make the biggest difference across international development support, education, advocacy, and thought leadership. Once the strategic plan and roadmap were in place, we turned to the brand. We developed a distinctive brand so that the Foundation could build trust with stakeholders and connect respectfully with communities. The Deliverables The Results Refuture Foundation launched in 2024 with a clear roadmap and a distinctive identity to advance ethical and transparent practices in the global secondhand clothing trade. The Foundation has delivered six projects focused on reducing textile waste and strengthening social and economic outcomes for communities most affected by the trade. Early impact includes US$7,800 to expand The Revival Studio’s upcycling work in Accra’s Kantamanto Market and A$10,000 in crisis relief following the January 2024 fire, supporting market workers and women traders. By backing initiatives like Africa Collects Textiles and broader research into global secondhand clothing flows, Refuture Foundation continues to strengthen fairer trade systems and scale its positive environmental and social outcomes.
The Living Wage Agenda: A New Era for Leadership in Consumer Goods
For decades, the conversation around a living wage has been stuck in a frustrating paradox. As leaders in business and ESG, we’ve seen countless voluntary commitments and well-meaning policies. Yet, the reality on the ground has barely shifted. Less than 2% of global garment workers earn a living wage, and while 80% of companies have responsible sourcing policies, only a third show tangible implementation and wage improvements. This gap between intent and impact is a moral failing and an increasing business risk. The time for voluntary pledges is over. The living wage is no longer a “nice to have” ethical choice; it is rapidly becoming a mandatory legal and investor requirement. The Driving Forces of Change This shift is being driven by two powerful forces reshaping the global business landscape. Investor Pressure: Financial institutions are no longer standing on the sidelines. Coalitions like the Platform Living Wage Financials (PLWF) are actively demanding greater transparency and measurable progress on wages in global supply chains. They understand that inadequate wages are a financial risk, leading to instability, reputational damage, and operational disruptions. Furthermore, the upcoming The newly formed Taskforce on Inequality-Related Financial Disclosures (TISFD) will likely formalise these expectations, putting living wages squarely on the agenda for every board and investor. It will likely have the same level of influence on global regulation and corporate practice as the TCFD and TNFD. New Legal & Reporting Landscape: Governments worldwide are legislating where industries have failed to act. EU Directives: The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) are creating mandatory human rights due diligence and reporting obligations for large companies. This means businesses must now identify and address human rights impacts, including inadequate wages, across their value chains. National Laws: Germany’s Supply Chain Act explicitly requires companies to address human rights risks, including inadequate wages, with penalties for non-compliance. Similarly, Australia, Canada, and the UK have modern slavery acts that are compelling businesses to demonstrate due diligence on worker rights. US States: Despite a federal shift away from ESG, states like California and New York have enacted legislation requiring salary ranges and pay transparency in job postings, pushing for fairer compensation practices. This is just a snapshot of what is happening across a host of other global jurisdictions. The B Corp Benchmark: A New Compass for the New Era Navigating this new landscape requires a new compass. For 19 years, B Corp has served as the gold standard for purpose-driven businesses. Its new standards, representing the most significant evolution in 19 years, provide a clear roadmap for addressing this living wage imperative. The new B Corp framework moves away from a flexible points system towards a set of seven mandatory Impact Topics. ‘Fair Work’ is now one of these mandatory topics, making a credible plan to pay a living wage a baseline requirement for all certified companies with workers. This change is too significant to ignore, as it sets a new minimum standard for what it means to be a leading, responsible business. Key changes to the new B Corp standards include: A “Family” Wage: The definition of a living wage is now explicitly for a worker and their family, removing the concept of an individual-only wage. Action Plans: Companies that are not yet paying a living wage must have a credible action plan and take approved interim steps to close the gap. Interoperability: The new standards are designed to align with major global and EU frameworks, simplifying compliance for multinational businesses. Evolved Focus: The new standards also have a dedicated Human Rights impact topic to cover supply chain labor issues, while Fair Work focuses on a company’s own employees. This ensures comprehensive coverage of worker rights. B Lab has also expanded its list of approved providers, aligning with the IDH Living Wage Roadmap. This includes primary providers like the Global Living Wage Coalition, WageIndicator, and Fair Wage Network. Fair Wage Network is a best-in-class provider that is unique in also offering a customer-facing certification, turning compliance into a powerful marketing asset. From Imperative to Advantage: Making it Happen This shift demands a strategic, cross-functional approach. Our work with the B Corp manufacturer Active Apparel Group (AAG) is a case in point. By collaborating on a wage gap analysis and a considered roadmap for their primary factory in Ningbo, China, AAG achieved living wage verification. This certification not only enabled AAG’s customers to automatically meet their own living wage commitments but also helped one of their key partners, Lorna Jane, become the first Australian brand to achieve 5 green smiles on Oxfam Australia’s official Company Tracker. This success story highlights a key truth: tackling the living wage agenda requires a nuanced shift in mindset—from viewing it as an ESG cost to embracing it as a strategic investment. Build a Roadmap: This requires developing a cross-functional action plan with clear timelines, financial modeling, budget allocation, and stakeholder buy-in from Finance, Merchandising, and Supply Chain, with the ESG team as the central driver. Crucially, Board and Executive endorsement is critical at every step, requiring a strong business case for sign-off. Collaborate, Don’t Compete: The most effective path forward is to work with factory owners as partners, not just suppliers. This also means engaging in pre-competitive collaboration with other brands that source from the same factories to ensure a unified approach. Be sure to bring your legal team on this journey with you. This approach is fundamental to a ‘Just Transition’, where we reflect on our responsibility to take current factory partners on the journey with us, particularly those smaller suppliers, rather than leaving them behind. Prepare to Get Uncomfortable: This journey requires courage. Be ready to take the business case for a living wage to the highest levels of governance and navigate new legal and financial dynamics. You’ll need to develop the skills to build a unified business case that quantifies both risk and opportunity. This involves collaborating with key internal functions like Finance,
Climate Reporting: The New Thread for Australian Fashion
Rosanna Iacono, CEO of Strategy and Sustainability Advisory, The Growth Activists, shares her expert insights on how Mandatory Climate Reporting is reshaping not only business strategy, but the entire Australian Fashion industry. Download your free copy of the 2025 Sustainability Report here. The fashion industry has long had a reckoning with sustainability compliance on the horizon. Now, an unavoidable shift is here – a mandatory climate reporting framework that came into effect on January 1st 2025 will affect fashion organisations of every size in Australia. This is the moment the industry must face one of its biggest negative environmental impacts: greenhouse gas emissions and climate change. As Joe Longo, the Chair of ASIC, has stated, “(mandatory reporting) is driving the biggest changes to financial reporting and disclosure standards in a generation.” This isn’t just a simple new regulation, it’s a global movement, and Australia’s new legislation – the Australian Sustainability Reporting Standards (ASRS) – activates this shift in our market. The EU has been a leader in this space, and the ASRS is largely aligned with the International Financial Reporting Standards (IFRS) and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This alignment is critical because it ensures Australian businesses are speaking the same language as their global counterparts in the EU, UK, Singapore, Hong Kong, and Japan, as well as specific US states like California. This is driven by a global push for market transparency by investors, who are increasingly demanding reliable data to assess which companies are managing climate risks and are positioned for a resilient, low-carbon future. This global consistency is a good thing; it means a business that prepares for ASRS is already on the path to meeting other international requirements if they trade globally or intend to at some stage. The ASRS framework establishes reporting obligations for different groups of businesses, with a phased rollout. While the visual timeline details the specific thresholds and dates for Group 1, 2, and 3 entities, it’s crucial to understand who we classify as ‘Group 4’. This is a key point that many in the fashion industry have not yet grasped. ‘Group 4’ comprises every other business, including the smaller enterprises that form the vast supply chains of larger reporting entities. This means even if you’re a small-scale designer brand, manufacturer or fabric supplier who doesn’t meet the formal reporting criteria for Groups 1, 2 or 3, you will still be affected, as your products or services contribute to their Scope 3 emissions. For fashion, the reliance on complex, global supply chains makes Scope 3 emissions particularly material, often accounting for over 90% of a brand’s total carbon footprint. Australia’s new rules will eventually necessitate data collection from every supplier in the fashion ecosystem, much like the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) holds large companies accountable for their entire value chain. While this might sound daunting, the real story isn’t about compliance, it’s about competitive advantage and long-term value creation. Mandatory reporting forces us to do the kind of deep analysis of our operations that we should have been doing all along. It’s an opportunity to reframe what can be seen as a cost into a strategic investment. At The Growth Activists, we’ve seen first-hand how companies can turn this regulatory change into a powerful driver of commercial value. The benefits are far-reaching and touch every part of a business. Financially, comprehensive reporting can lead to significant cost savings. By mapping out emissions hotspots across the entire value chain, businesses identify opportunities to reduce energy consumption, minimise waste, and streamline logistics. This isn’t about just ticking boxes; it’s about making your business leaner and more efficient. Beyond efficiency, controlling your data and having a decarbonisation plan makes you a more attractive supplier. Your largest customers are now mandated to disclose their Scope 3 emissions and they will increasingly seek partners who can provide accurate and verifiable data. This proactive approach transforms you from a compliance headache into a key strategic partner, future-proofing your business relationship. There are also powerful qualitative benefits. Robust climate disclosures enhance a company’s reputation, attracting a new generation of climate-conscious consumers and building loyalty with existing ones. For investors, high-quality, transparent reporting builds trust, leading to more favourable lending terms and higher valuations from a growing pool of ESG capital. A demonstrable commitment to climate action is also a powerful tool for attracting and retaining top talent who seek purpose-driven careers. It can also drive innovation, leading to the development of new, sustainable products and services that unlock new revenue streams. This is a profound shift for the Australian fashion industry. It requires building new internal systems and capability to truly integrate and operationalise climate action into the business. The time to start is now, not when the first reporting deadline looms. If you haven’t started yet, don’t stress, but do get going. Whether you are a large corporation or a small-scale designer, understanding your climate impact is no longer optional. It’s a new thread that will determine resilience and success in the years to come. Rosanna Iacono is the CEO of strategy and sustainability consultancy The Growth Activists and one of Australia’s leading advisors to the fashion, beauty and lifestyle industries. She is a leading expert on brand strategy, having held global leadership roles at Nike and Levi’s and helped deliver private equity exits for Australian businesses like Sheridan and Jurlique.
Brand Power: Fashion’s Unseen Asset. Why Brand Strategy and Capability are Non-Negotiable in Fashion’s Future
This article was first published on Ragtrader. Ragtrader has been providing comprehensive news, analysis and opinion on the Australian clothing, footwear and accessories sector since 1972. The Australian fashion industry, dynamic and ever-evolving, is a landscape where brand is paramount. Yet, an alarming trend continues to undermine the potential of once-iconic labels: the systematic erosion of brand DNA following changes in ownership. It’s a phenomenon that speaks volumes about a critical oversight in valuing intellectual property and, more importantly, the crucial leadership skills required to nurture it. As a brand strategist with over three decades of experience, including sixteen years in global and regional leadership roles at powerhouses like Nike and Levi’s, and having navigated the complexities of the Australian market, I’ve witnessed firsthand the devastating consequences of what I call “brand blandification.” This isn’t merely about a decline in sales; it’s a lamentable loss of unique identity that disappoints loyal fans and leaves a void in the market, ultimately leading to the economic erosion of a once-valued asset. Consider Sass & Bide. Once the undisputed darling of Australian fashion, a brand synonymous with a highly distinctive design handwriting crafted by its visionary founders, it was snapped up by Myer in 2013. What followed, however, was a masterclass in how not to manage a brand post-acquisition. The original essence, the very soul of Sass & Bide, was seemingly left undocumented, uncodified. There was no “codes and cues handbook” to capture its unique spirit, no clear mandate to preserve its distinctive aesthetic. The result? A brand that, to its original devotees, became a shadow of its former self, struggling to differentiate itself from high-street and private label offerings and, regrettably, losing its compelling edge. Whilst revenue today is reportedly just a fraction of what it was at the time of the transaction in 2013 (when the store footprint was many times larger), it is the value of the brand as an asset that is most eroded. Sass & Bide is far from an isolated incident. We’ve seen similar fates befall Marcs, Willow, and Lover – brands once celebrated for their unique brand pillars, now seemingly bereft of their original identities, reduced to brand marks applied to private label offerings. And the most lamentable stories are those of brands that, having lost their way after a change in ownership, ultimately succumbed to oblivion, such as Alannah Hill and Charlie Brown. While it’s easy to point fingers at the new owners, the reality is more nuanced. The issue isn’t simply the change of hands; it’s the profound misunderstanding and undervaluation of brand as a living, breathing asset. In my experience leading private equity assignments for premium retail businesses, a brand-led approach is crucial for maximising exit value – and a truly healthy brand should always be sale-ready. In an acquisition, the purchase price often exceeds the fair market value of the tangible assets (like buildings, equipment, inventory) and is recorded as “goodwill” on the acquirer’s balance sheet. A significant portion of this goodwill is attributable to intangible assets, and the brand (its reputation, customer loyalty, recognition, and future earning power) is a major driver of that. I’ve experienced firsthand that there are strategic acquirers who deeply understand the power of brand, and empower leadership teams to drive growth and equity through a consumer-first, brand-centric approach. The notion that private equity inherently strips value is a dated generalisation; in reality, brand mismanagement can occur under any ownership, be it trade, private equity, or otherwise. Leader businesses understand that a brand’s name alone is not enough. They powerfully capture their brand cues, embedding them in rigorous brand guidelines, and then work tirelessly to keep them alive while continuously making them relevant and compelling to new audiences. Chanel is the quintessential example. Long after Coco Chanel’s passing in 1971, her iconic design cues – the quilting, tweed, gold chains, pearls, camellias, and monogram buttons – have been meticulously carried forward. Karl Lagerfeld, and later Virginie Viard, masterfully reinterpreted these signature elements, ensuring their resonance with emerging consumer groups. As we eagerly await Matthieu Blazy’s vision for Chanel, we can be confident that whilst his artistic direction will be fresh, the brand’s core cues will be powerfully reinterpreted, not erased. Critical lessons for new owners So, what are the critical lessons for new owners keen to preserve and indeed amplify the value of these intellectual property assets, using them to fuel continued growth? The first is to acknowledge that a brand is an asset of profound value, not merely a logo or a name. It is the sum of experiences, perceptions, and emotions that resonate with consumers. This asset must be nurtured, protected, and continuously modernised without losing its essential characteristics. Zimmermann, a global success story, exemplifies this beautifully. Its private equity owners have wisely retained the services of the original founders, Nicky and Simone Zimmermann, understanding that their vision is intrinsically linked to the brand’s enduring power. Similarly, Ksubi’s resurgence, propelled by the return of a brand impresario like Pip Edwards, demonstrates the profound impact of re-igniting original brand DNA for a new global customer base. The second and perhaps most crucial learning concerns leadership capability. Far too often, particularly in the Australian market, managers appointed to lead acquired fashion businesses come from a high-street retail background, where brand is often secondary. While their operational expertise is valuable, they frequently lack the intrinsic brand management skills honed through experience with global icon brands or the rigorous brand discipline learned in branded consumer packaged goods. This skill set simply doesn’t cut it when the task is to preserve and evolve a brand’s unique identity. Another error that is often made is to leave the work of defining brand to newly appointed design leaders, yet this function also often lacks the intrinsic skill if they have not had experience in global leader brands, having come instead from high-street retail where the default approach is to take inspiration from global catwalks versus truly conceptualise a distinctive signature. This is
Why Governance Matters More Than Ever
“The fashion industry is increasingly targeted as needing major reform to bring it into the circular economy world.” This article was first published on The Fifth Estate, Australia’s leading online news source for sustainability and ESG in the built environment. As I conclude my term as acting Independent chair of Seamless, Australia’s clothing stewardship scheme, I’m reminded more than ever of the vital role governance plays in shaping a future that honours both present realities and long-term objectives. Seamless is Australia’s clothing stewardship scheme and the world’s first circular product stewardship scheme. It aims to make Australian clothing circular by 2030 and significantly reduce the 222,000 tonnes of clothing that currently go to Australian landfills each year. We help Australians choose, enjoy and recycle clothing more responsibly by working together with retailers and key stakeholders so that people and nature thrive. We are building a critical mass for collective progress, with nearly 60 brands and retailers registered as stewards, and more than 110 supporter organisations across the clothing value chain. In these complex and often turbulent times, balancing today’s needs with tomorrow’s aspirations is not simply a duty, but a strategic imperative demanding the attention of every Director across every Board. Governance, at its core, establishes the rules, practices and processes that ensure accountability, transparency, and ethical behaviour in the pursuit of an organisation’s objectives. It’s the framework that guides decision-making and ensures things are run well. At Seamless, robust governance is foundational for ensuring sound and sustainable financial stewardship as we pursue our purpose. It becomes even more critical when we consider our specific stakeholder deliverables – the essential environmental and social benefits we are obligated to create for the natural world and its inhabitants, and which can only be fully achieved through industry-wide participation. There’s no denying that almost every sector, including apparel, faces significant headwinds. Some of these are impeding how our economy can be reshaped into one that thrives whilst generating value for a broader group of stakeholders. The term “poly-crises” hardly seems sufficient. The majority of Australians are confronted by a cost-of-living crisis squeezing discretionary spending. As a result, ultra-fast fashion continues to grow relentlessly, gobbling up mainstream fashion market share, as financially constrained consumers trade down. The anti-ESG agenda of the new US administration has been embraced by some corners of the Australian business community. Growing geopolitical unrest and the economic threat posed by trade wars loom large. And the politicisation of critical social and environmental issues by select segments of the media diminishes the importance and respect these matters urgently deserve. Yet, amidst this, positive disruptors are emerging. The growth of the clothing resale, rental, and repair markets is rapidly accelerating, with the global resale market growing at double the rate of new fashion sales, according to ThredUp. Global regulatory shifts, including the EU Green Deal and its many directives, are accelerating the adoption of circularity, transparency and consumer empowerment. China’s emergence as a clean energy superpower is setting the pace for other global economies. Australia’s mandatory climate reporting signals a growing national commitment to embedding environmental accountability within our economy, incentivising sustainable practices across all sectors, including clothing. These forces, both negative and positive, require a strong and steady strategic response. We must double down on our commitment to build better systems that prioritise human and environmental wellbeing without compromising financial rigour. Now more than ever, it is imperative to reframe ESG not as a short-term expense but as a long-term investment. To do this, directors need to be confident that operational teams can demonstrate to stakeholders and shareholders that sustainable transformation drives immediate returns and long-term resilience. It has been my observation that truly competitive businesses build resilience to these risks and leverage material issues like sustainability as a core driver of motivation, innovation and growth – “good” can, and must, be good for business. The responsible organisations that have joined Seamless recognise that the benefits of best-in-class sustainability practice are leading to stronger employee engagement, greater industry collaboration, commercially sustainable innovation, improved access to capital, and deeper customer loyalty. These outcomes are measurable and essential. I shared these sentiments in the first episode of the Seamless Leadership podcast, and many executive leaders who also featured in the podcast series shared similar workplace realities. I believe that governance is not just a framework; it is the foundation of vision, resilience, and legacy. So, my counsel on strategic action for directors and decision-makers undertaking purposeful transformation is to: Maintain fortitude for the moral obligation: We must articulate the business case behind every initiative, whether driven by risk or opportunity, and demonstrate the economic value creation in sustainable transformation – yet we must also acknowledge the profound moral obligations inherent in these issues and summon the courage to champion them. Elevate governance: The “g” in ESG is more critical than ever. Strong governance frameworks embed sustainability into strategy, protect against short-termism, and uphold trust with your most critical stakeholders, starting with employees and extending to customers. Backtracking on commitments risks eroding stakeholder trust and causing lasting reputational damage, outweighing any fleeting gains. Harness stakeholder purpose: In directorship, actively seek to contribute to a larger, lasting purpose. Embrace connection and collaboration with other purpose-driven leaders and critical stakeholders to fuel your optimism and drive the action needed to tackle the complex and interconnected systemic challenges facing our organisations and our industry.
Case Study: Bassike – Achieving B Corporation Certification
About Bassike Bassike is an Australian designer fashion brand that champions local production of high-quality, sustainably-made wardrobe essentials. With eight stores across the country and products stocked by over 80 retailers worldwide, Bassike is regarded as an Australian leader brand in the designer fashion segment. The Challenge In 2019, Bassike made a strategic commitment to elevating responsible business practices as a core part of its purpose and vision. Recognising the challenge of turning their commitment into action, the leadership team engaged The Growth Activists as external ESG experts for guidance. The Solution The Growth Activists had previously worked with Bassike, supporting annual strategic planning and implementation. As part of this work, B Corp certification was identified as Bassike’s best ESG global accreditation option. This certification demonstrates the brand’s commitment to ethical and responsible business practices and the positive impact of its ESG efforts. The Deliverables The Growth Activists guided the Bassike team through the B Impact Assessment (BIA) process, identifying actionable items and operational practices that could lead to significant additional points, referred to as Impact Business Models (IBM). After receiving the BIA report and comprehensive action list, the Bassike team began implementing the next stage, concentrating on improving their policies and operations. Upon completion, they submitted for certification through B Lab, which involved standard evidence verification. The Results Bassike became a Certified B Corp in June 2022, achieving an outstanding score of 92.6 – an exceptional achievement for a fashion retail business. It also demonstrated remarkable success in the BIA by scoring strongly in two impact areas, Community (28.9 points) and Environment (26.1 points). The BIA process and subsequent implementation plan helped the Bassike leadership team identify ethical and responsible business practices that were already implicitly ingrained in the organisation, but importantly the framework helped them articulate them more explicitly and effectively. The BIA also helped them to recognise strengths, identify areas for improvement to meet the standards, and underscored the importance of documentation of evidence of processes and policies as foundational to good ESG practice. Furthermore, the BIA process led to an enhancement of existing operational procedures. Notably, Bassike was able to enrich its Sustainable Ethical Manufacturing Index (S.E.M.I.), a proprietary internal framework developed to guide internal decision-making around Bassike’s supply chain. S.E.M.I. screens and ranks Bassike’s fabric mills, manufacturing partners and the material composition of every Bassike product across three pillars; environment, labour and animal welfare. The BIA framework enabled the Bassike team to cross-reference standards and enhance the process. Finally, the process highlighted the opportunity to strengthen the brand’s ESG narrative for critical stakeholders, particularly for employees and customers, who offered valuable insights into material issues that matter. This led to an employee education program enabling store staff to understand what it means to be a B Corp and engage with customers confidently on the positive impact of the brand on people and planet. In 2023 Bassike also published its first impact report, leveraging the important chain of evidence already created through the B Corp certification process to tell their impact story to all their stakeholders.