Singapore-based Shein pays the price for misleading eco claims—€1 million to be exact

MILAN/SINGAPORE: Shein, the global ultra-fast-fashion giant, is in trouble again. This time, Italy’s Competition Authority (AGCM) has fined the company €1 million (S$1.48 million) for what it describes as vague, generic, and misleading green claims on its website and marketing materials. The AGCM’s investigation found that Shein misled consumers with its sustainability language on the “Social Responsibility,” “#SheinTheKnow,” and “evoluShein” pages.

Authorities criticised Shein for using misleading messages about product recyclability and the use of “green fibres.” These messages painted an overly positive environmental image that did not match the facts. They specifically highlighted the “evoluShein by Design” line, pointing out that claims about eco-friendly materials were unsupported and could wrongly lead customers to think the collection was completely recyclable.

In response to the penalty, Shein management confided that it has vigorously collaborated with the AGCM and has already made moves to advance how it communicates about sustainability to guarantee compliance with authorised standards.

Carbon goals questioned as emissions rise

Shein’s 2024 Sustainability and Social Impact Report disclosed an alarming surge in emissions, notwithstanding determined goals to attain carbon impartiality by 2050. Transport-related emissions jumped 13.7% to 8.54 million metric tons of CO₂, mainly due to a higher use of air freight, which contradicts the company’s earlier promises to optimise logistics and reduce high-emission transport.

While Shein reported slight reductions in direct (Scope 1 and 2) emissions from using solar energy at its offices and logistics hubs, most of its emissions come from Scope 3 emissions tied to its 7,200 independent suppliers. Shein has promised to reduce those emissions by 25% by 2030, but it states that progress relies on voluntary improvements by suppliers, without offering direct financial help.

Mounting pressure across Europe

Italy’s action is just the latest challenge for Shein in Europe. In France, the retailer faced a record €40 million fine in July from the Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) for misleading discount pricing practices. The French Senate also passed a bill targeting ultra-fast-fashion companies like Shein and Temu, proposing a new import tax of €2 to €4 per small parcel shipped from outside the EU. This regulation is projected to be voted on in October.

Furthermore, Shein is facing legal clashes overseas. In California, it just settled to a US$700,000 (S$902,020) payment in a consumer safety litigation over shipping interruptions. These proceedings highlight mounting international examination of Shein’s business model, which detractors contend favours rapidity and volume over transparency and sustainability.

Notwithstanding the criticisms, Shein’s leadership remains stable and strong. At the VivaTech consultation in Paris, executive chair Donald Tang vetoed the “fast fashion” tag and branded the company as a “fashion-on-demand” trendsetter. But with officials in Europe hastening inquiries and implementation, Shein’s sustainability claims are coming under growing examination.