SHEIN’s Scope 3 Emissions: Fast Fashion’s Carbon Burden

The meteoric rise of SHEIN, the world’s largest fast fashion brand, has brought significant environmental challenges. With an estimated revenue of US$32.5bn in 2023 and growth exceeding 1,000% from 2019 to 2023, SHEIN’s carbon footprint, particularly its Scope 3 emissions, has come under increasing scrutiny.

Between 2022 and 2023, SHEIN reported an 81% increase in absolute emissions, outpacing its 43% revenue growth during the same period. According to its 2023 Sustainability and Social Impact Report, SHEIN emitted 16.7m metric tons of CO₂ in 2023.

Greenwashing accusations and ESG controversies

SHEIN has faced numerous accusations of greenwashing as it attempts to address its environmental impact. In September 2024, the Italian Competition Authority launched an investigation into misleading environmental sustainability claims made by the company.

Greenpeace has criticised SHEIN’s sustainability efforts, stating in 2022 that it was “taking greenwashing to a new low” following a US$14m donation pledge to an NGO working with textile waste workers, while still producing disposable fashion at an unprecedented scale.

SHEIN has faced scrutiny over its labor practices. In 2021, Reuters reported that SHEIN had falsely claimed its factories were certified by the International Organization for Standardization (ISO) and SA8000 labor standards organisation. More recently, at a UK House of Commons hearing in January 2025, SHEIN representatives faced tough questions about the company’s potential use of cotton sourced from China’s Xinjiang region, where concerns over forced labor persist.

SHEIN’s sustainability efforts: Progress or PR?

Despite mounting criticism, SHEIN has introduced various sustainability initiatives. In January 2025, the company appointed Mustan Lalani as Global Head of Sustainability, signaling an increased focus on circularity, decarbonisation and strategic partnerships, who stated: “The scale and complexity of this challenge are immense, but so is the opportunity to set a new standard for sustainability in the industry.”

SHEIN has set a target to reduce emissions across all scopes by 25% by 2030 (from a 2023 baseline). To tackle Scope 3 emissions, SHEIN is promoting rooftop solar panels across its supply chain, complemented by cash incentives. The company has increased the use of preferred materials in packaging, from 4.1% in 2022 to 16.2% in 2023.

Going public: SHEIN’s IPO speculation and ESG announcements

Reports suggest SHEIN initially filed for a New York Stock Exchange listing in late 2023, but regulatory concerns and political scrutiny over its Chinese ties stalled progress. In June 2024, SHEIN reportedly filed initial paperwork to list on the London Stock Exchange. However, during a UK parliamentary hearing in January 2025, SHEIN’s legal counsel declined to confirm IPO plans, stating:

“I’m not able to comment on any IPO speculation.”

Do SHEIN’s sustainability efforts offset its environmental impact?

Despite the ESG initiatives, critics argue SHEIN’s sustainability efforts fail to offset the massive carbon footprint of its fast fashion model.

Ken Pucker, Professor of the Practice at The Fletcher School at Tufts University, remarked:

“Assuming that carbon dioxide emissions were SHEIN’s only negative externality and assuming that SHEIN had to pay US$100/mt of CO₂ (which is far less than most credible estimates of the cost of carbon), then its US$5.3m donation represents one-third of 1% of what SHEIN should pay humanity for the societal costs of its annual CO₂ emissions.”

He further pointed out:

“In fairness to SHEIN, no fashion company currently pays society for its negative externalities—carbon, chemicals, water, or unfair labor practices.”

Maggie Gu, Co-Founder and General Manager of SHEIN, acknowledged the company’s role in reducing environmental impact:

“We know we have an important role to play in preserving the resources we all share.” “We’ve come a long way and we are evolving to ensure that our business practices are aligned with our customers’ goals and values.”

While SHEIN has taken steps to improve its sustainability practices, its business model remains fundamentally at odds with reducing environmental impact. As regulatory scrutiny increases and consumer awareness grows, the true test of SHEIN’s commitment to sustainability will be whether it can shift away from fast fashion’s disposable culture and implement genuine, industry-wide change.

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