SHEIN and Fast Fashion’s Supply Chain Problem

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SHEIN's greenhouse gas emissions continue to rise. Picture: SHEIN
SHEIN's explosive growth has amplified its ESG impact, raising pressing questions about fast fashion’s sustainability and supply chain practices

The Ellen MacArthur Foundation reveals a stark reality: every second, a truckload of discarded textiles ends up incinerated or in landfill. The fast fashion industry, a significant driver of this waste, ranks as the third most polluting sector globally, following food and construction.

Within this sector, SHEIN, the world’s largest fast fashion retailer, embodies many of the sustainability challenges inherent to the industry.

With estimated revenue of US$32.5bn in 2023, SHEIN lists between 2,000 and 10,000 new items daily, offering full outfits for under US$15. Yet, despite the affordability of its products, the environmental and social costs of its supply chain operations continue to mount.

The company’s explosive growth—over 1,000% from 2019 to 2023—has amplified its ESG impact, raising pressing questions about fast fashion’s sustainability and supply chain practices.

Chris Xu, CEO at SHEIN

“At SHEIN, our mission is to make the beauty of fashion accessible for all," says Chris Xu, CEO at SHEIN. "However, we recognise that producing affordable apparel and delivering it quickly to our customers all over the world comes with significant challenges that we, along with the rest of the industry, must address."

The carbon cost of SHEIN’s supply chain

SHEIN’s greenhouse gas (GHG) emissions paint a troubling picture of its supply chain’s environmental footprint. From 2021 to 2022, the company’s Scope 1 emissions (direct emissions from its operations) grew by 1.43%, while Scope 2 emissions (indirect emissions from purchased energy) fell by 26%, thanks to the purchase of Renewable Energy Credits (RECs).

However, Scope 3 emissions, which encompass the supply chain's upstream and downstream activities, surged by 52%. This resulted in an overall emissions growth of 51% during a year when revenue rose by 44%.

In 2023, the situation worsened. Scope 1 emissions nearly doubled, Scope 2 rose by 32% and Scope 3 increased by 12%. Collectively, this represented an 81% rise in total emissions, outpacing the company’s 43% revenue growth that year. These figures underscore the escalating carbon footprint of SHEIN’s global supply chain.

SHEIN has committed to reducing emissions across all scopes by 25% by 2030, using 2023 as the baseline year. In its sustainability report, the company acknowledges the scale of the challenge: “We recognise that we still have much more work to do on our climate mitigation journey and are committed to driving progress.”

However, with the company’s emissions growing faster than its revenue, achieving this target will require systemic changes to its supply chain operations, including raw material sourcing, manufacturing, and logistics.

Alexis Eyre, Co-Founder of the Sustainable Marketing Compass framework

Alexis Eyre, Co-Founder of the Sustainable Marketing Compass framework, wrote on social media: “It's a real shame they [SHEIN] didn't build sustainability into their core offering from day one whilst using their innovative thinking as the picture could be a lot less stark.”

Ethical concerns in fast fashion production

Beyond environmental concerns, SHEIN’s supply chain faces significant ethical scrutiny, particularly regarding labour conditions.

According to the World Wide Fund for Nature (WWF), garment factory workers in fast fashion often work long hours in unsafe conditions for wages that fall below the living standard. Meanwhile, a BBC investigation in Guangzhou, China, revealed that workers producing clothing for SHEIN clock an average of 75 hours per week, far exceeding legal limits in many countries.

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In its 2023 Sustainability and Social Impact Report, SHEIN disclosed two cases of child labour identified in its supply chain during the first three quarters of the year.

The company claims to have addressed these violations promptly, stating: “Both cases were resolved swiftly, with remediation steps including terminating contracts with underage employees, ensuring the payment of any outstanding wages, arranging medical checkups and facilitating repatriation to parents/legal guardians as needed.”

Additionally, Responsible Sourcing Audits conducted throughout 2023 identified age-related violations in less than 0.1% of 3,990 audits. While this percentage appears low, the presence of any violations highlights vulnerabilities in SHEIN’s oversight of its supply chain.

Lubomila Jordanova, CEO and Founder of Plan A

Lubomila Jordanova, CEO and Founder of Plan A, notes: “The industry’s dependence on cheap labour results in poor working conditions and wage suppression, which can destabilise supply chains and lead to costly disruptions and legal challenges.”

These risks underscore the need for brands like SHEIN to prioritise ethical sourcing and worker welfare as part of their supply chain strategy.


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