The old mantra, reduce, reuse, recycle, begins with "reduce." As in, better to avoid shopping altogether. Learn to live with less. Buy things that will last, and then get them repaired rather than replacing them as they wear. But we do need food, shelter, clothing. We need tools to cook with, we need furnishings for our homes.
The place to start, then, is buying used. Double bonus: you buy something without the environmental costs of new manufacture, and you keep an item out of the landfill. Some places to start: Better World Books, Craig's List, Goodwill, the Salvation Army, your local thrift or consignment shop.
When used won't do, you can shop from a store with explicit commitments to environmentally friendly materials and good labor practices across the supply chain. Some of the better options:
Ten Thousand Villages
World of Good
Among manufacturers that sell clothing in the US, only H&M, Calvin Klein, Tommy Hilfiger, and Abercrombie and Fitch have signed on to the Accord on Fire and Building Safety in Bangladesh.
Green America recommends fabrics made out of bamboo, organic cotton, industrial hemp, recycled polyester, soy silk or cashmere, and wool. They also publish The National Green Pages, a directory of green businesses, as well as a newsletter with information on fair trade practices across a variety of industries.
In the absence of transparency about labor rights, industrial methods, and green materials, we all need to keep reading about corporate practices and putting pressure on individual companies to improve their records.