A proposed five-level sustainability label for clothing sold in Australia.

1. What the rating measures

• Materials

  Recycled, renewable or responsibly sourced materials.

• Environmental Impact

  Carbon emissions, water use, pollution and chemical impacts.

• Durability and Circularity

  Product lifespan, repairability, recyclability and end-of-life options.

• Supply Chain Transparency

  Whether brands provide reliable information about how and where garments are made.

  
  

2. How the rating works

Rating	Meaning
A	Leading environmental performance
B	Strong environmental performance
C	Meets an acceptable standard
D	Significant improvement required
E	High environmental impact or insufficient evidence

3. Evidence requirements

Ratings should be based on verified product-level information rather than general brand claims.

4. Who would administer it

The framework should ultimately be administered or independently verified through a nationally recognised standard.

Research Brief 02

Why Brand Sustainability Ratings Are Not Enough

Consumers are increasingly seeking sustainable clothing, yet understanding the environmental performance of a garment remains challenging. Independent platforms such as Good On You have made sustainability information more accessible by evaluating fashion brands against environmental, labour and animal welfare criteria. These initiatives have improved transparency and encouraged brands to strengthen their sustainability commitments.

However, there is an important limitation: most existing sustainability ratings evaluate brands—not individual products.

As purchasing decisions are made one garment at a time, this distinction matters.

Brands do not manufacture identical products

A single fashion brand may produce hundreds or even thousands of products each year.

Within the same collection, garments can vary significantly in:

• fibre composition

• manufacturing location

• dyeing processes

• recycled material content

• transport distance

• expected product lifespan

For example, one T-shirt may be manufactured using conventional cotton, while another from the same brand incorporates recycled fibres, renewable energy in production and lower-impact dyeing processes.

Although these products have different environmental footprints, they are often associated with the same overall brand reputation.

This makes it difficult for consumers to compare the environmental performance of the specific item they intend to purchase.

What brand ratings do well

Brand-level assessments remain valuable.

They encourage companies to improve corporate policies, supply-chain management and public reporting. They also reward businesses that demonstrate long-term commitments to sustainability and transparency.

These ratings answer questions such as:

• Does this company publish environmental targets?

• Does it disclose information about its suppliers?

• Does it have policies addressing labour conditions?

• Does it report progress towards reducing emissions?

These are important indicators of corporate responsibility.

However, they do not necessarily answer the consumer's most immediate question:

"Is this particular garment environmentally preferable to the alternatives on the shelf?"

Product-level information supports better purchasing decisions

Around the world, policymakers are increasingly recognising the need for product-specific environmental information.

The European Union's Digital Product Passport (DPP) is one example of this shift. Developed under the Ecodesign for Sustainable Products Regulation (ESPR), the DPP aims to make information about a product's origin, materials, repairability, environmental performance and circularity more transparent throughout its lifecycle. Textiles are expected to become one of the product groups progressively covered by this framework.

Rather than focusing only on the manufacturer, the Digital Product Passport is designed around the individual product itself.

Similarly, France has begun introducing a textile environmental label (often referred to as the Textile Eco-score) to help consumers compare the environmental impact of clothing before purchase. The system considers impacts across the product lifecycle—from raw material extraction and manufacturing to transport and end-of-life—and presents this information at the point of sale.

These developments suggest a broader international trend towards product-level transparency.

Why Australia should consider a product-level approach

Australia currently has no nationally recognised environmental labelling system for clothing.

Existing labels communicate important information about fibre composition and care instructions but provide little insight into environmental performance.

A future Australian Clothing Eco Rating should therefore complement—not replace—existing brand initiatives.

Brand ratings and product ratings serve different purposes:

Brand Rating	Product Rating
Evaluates company-wide policies and commitments	Evaluates the environmental performance of an individual garment
Useful for understanding corporate responsibility	Useful for comparing products before purchase
Changes relatively slowly	Can differ between products within the same brand
Encourages better business practices	Supports informed consumer choice

Together, these two approaches provide a more complete picture of sustainability.

A proposal for Australia

Clothing Eco Rating recommends that any future Australian sustainability label should focus primarily on individual products, rather than assigning a single environmental score to an entire brand.

This approach recognises that environmental impacts vary between garments, even when produced by the same company.

A product-level framework could assess factors such as:

• material selection

• manufacturing impacts

• durability

• repairability

• recycled content

• transparency of supporting data

By presenting this information through a clear and standardised rating, consumers would be better equipped to compare garments using consistent environmental criteria.

As international initiatives continue moving towards product-specific environmental information, Australia has an opportunity to develop a practical and transparent system that supports both informed purchasing decisions and continuous improvement across the fashion industry.

References

• European Commission. Digital Product Passport.

• Regulation (EU) 2024/1781 establishing a framework for ecodesign requirements for sustainable products (ESPR).

• European Parliament. Digital Product Passport for the Textile Sector (2024).

• French Ministry of the Economy. Textile Eco-score: What You Need to Know (2025).

Research Brief 01

Australia's Clothing Labels Tell Consumers What They Are Buying—Not How It Was Made

Every garment sold in Australia comes with information intended to help consumers make purchasing decisions. Typically, clothing labels identify fibre composition, care instructions and, in many cases, the country of origin. These requirements improve consumer protection by helping shoppers understand what a garment is made from and how it should be maintained.

However, as sustainability becomes an increasingly important purchasing consideration, an important question remains unanswered:

What is the environmental impact of the garment?

Current clothing labels provide almost no information about this.

What Australian clothing labels currently require

Australian regulations require clothing suppliers to provide information that enables consumers to identify and care for textile products correctly. Mandatory care labelling includes either written care instructions or internationally recognised care symbols, ensuring consumers know how garments should be washed, dried and maintained.

These labels generally communicate:

• fibre composition

• washing and care instructions

• manufacturer or brand information

• country of origin (where applicable)

This information protects consumers, but it was never designed to measure environmental performance.

As a result, two garments labelled "100% cotton" may appear identical even though their environmental impacts differ substantially because of variations in irrigation, energy sources, manufacturing processes, transport distances and waste management practices.

Consumers are increasingly expected to make sustainable choices

Public awareness of fashion's environmental impacts has grown rapidly over the past decade. Many consumers actively seek products marketed as sustainable, responsible or environmentally friendly.

At the same time, businesses are making more environmental claims than ever before.

The challenge is that these claims are rarely presented using a consistent methodology.

One brand may define sustainability by using recycled fibres.

Another may focus on renewable electricity.

A third may highlight reduced water consumption.

Without standardised reporting, consumers cannot meaningfully compare products.

The Australian Competition and Consumer Commission (ACCC) has identified this as a growing concern. It notes that environmental claims must be truthful, evidence-based and not misleading. Vague expressions such as "green", "eco-friendly" or "sustainable" may mislead consumers when they are unsupported or lack sufficient context.

Information asymmetry creates a market problem

Economists describe this situation as information asymmetry—where sellers possess significantly more information than buyers.

Manufacturers generally understand how products are sourced and produced, while consumers must rely on marketing material and voluntary disclosures.

This imbalance makes it difficult for consumers to reward genuinely lower-impact products.

It also disadvantages companies that invest in sustainability but compete alongside businesses making broad environmental claims without equivalent evidence.

Lessons from existing labelling systems

Australia has successfully introduced simple environmental labels in other sectors.

Energy Rating Labels allow consumers to compare household appliances using a common methodology.

Similarly, the National Australian Built Environment Rating System (NABERS) translates complex building performance data into a straightforward star rating.

Both systems demonstrate that technical environmental assessments can be communicated through clear, standardised labels that support informed purchasing decisions.

The clothing sector currently lacks an equivalent national framework.

Towards a Clothing Eco Rating

Rather than replacing existing textile labels, Clothing Eco Rating proposes adding an environmental performance label that complements existing consumer information.

Such a framework could allow shoppers to compare garments using consistent environmental criteria rather than relying solely on marketing language.

Importantly, the objective is not to simplify sustainability into a single marketing claim. Instead, it is to translate complex environmental data into information that consumers can understand and use at the point of purchase.

As governments around the world continue exploring product environmental labelling, Australia has an opportunity to develop a transparent, evidence-based system that helps consumers make more informed decisions while encouraging greater accountability across the fashion industry.

References

Australian Competition and Consumer Commission. (2025). Environmental and sustainability claims.

Australian Competition and Consumer Commission. (2023). Care labelling for clothing and textiles mandatory standard.

Australian Competition and Consumer Commission. (2023). A guide to making environmental claims for business.