How Can Supply Chains Go Green? SHEIN's Environmental Toll

The Ellen MacArthur Foundation highlights a startling reality: every second a truckload of discarded textiles is either burned or dumped into landfill.

Fast fashion, known for its rapid production and low prices, stands as the third most polluting industry globally, following only food and construction.

At the centre of this conversation is SHEIN, the world’s largest fast fashion company, which epitomises the environmental and ethical challenges facing the sector.

With a staggering revenue of US$32.5bn in 2023, SHEIN adds between 2,000 and 10,000 new items to its site daily, offering full outfits for less than US$15.

But while the price tags are small, the environmental cost is massive. The company’s meteoric rise, with growth exceeding 1000% from 2019 to 2023, is accompanied by significant ESG concerns.

“At SHEIN, our mission is to make the beauty of fashion accessible for all. 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," says Chris Xu, CEO of SHEIN.

The environmental impact of fast fashion production

SHEIN’s growth is mirrored by its greenhouse gas (GHG) emissions, which are increasing even faster than its revenues.

Between 2021 and 2022, the company reported a 51% rise in total emissions. While its Scope 2 emissions (linked to purchased energy) fell by 26% through the use of Renewable Energy Credits (RECs), Scope 1 emissions (direct emissions from its operations) rose by 1.43% and Scope 3 emissions (those across its supply chain) surged by 52%.

This trend continued in 2023, with SHEIN recording an overall GHG emissions increase of 81%. The report attributes this to its rapid expansion but acknowledges the urgent need for change.

SHEIN has set a goal to reduce emissions across all scopes by 25% by 2030, using 2023 as a baseline. "We recognise that we still have much more work to do on our climate mitigation journey and are committed to driving progress,” states the company’s latest sustainability report.

However, many experts argue that incremental targets like these fail to address the root of the problem.

Alexis Eyre, Co-Founder of the Sustainable Marketing Compass framework, points out: “It's a real shame that they 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.”

Working conditions in fast fashion supply chains

Environmental harm is just one part of the fast fashion equation. The industry is also plagued by poor working conditions.

According to the World Wide Fund for Nature (WWF), workers in garment factories—particularly those linked to fast fashion—are often paid less than a living wage and endure unsafe environments.

In Guangzhou, China, a BBC investigation revealed that workers producing garments for SHEIN toil for approximately 75 hours per week. The company’s own 2023 Sustainability and Social Impact Report acknowledges this, revealing two cases of child labour in its supply chain between January and September.

“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,” the company reports.

Beyond this, SHEIN’s audits uncovered age violations in fewer than 0.1% of its 3,990 supplier audits in 2023.

Yet these figures do little to reassure critics. Lubomila Jordanova, CEO and Founder of Plan A, comments: “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.”

Moving towards sustainable supply chains

The challenges within fast fashion highlight the urgent need for a shift to sustainable supply chains.

Addressing both environmental and social issues, companies must invest in cleaner production methods, ethical sourcing practices and fair labour standards. Transparency will also be key, allowing consumers to hold brands accountable and demand meaningful action.

SHEIN’s rapid growth may exemplify the scale of the problem, but it also offers a stark reminder of the industry’s wider impact.

Change is not just a moral imperative—it’s essential for the long-term stability of global supply chains.

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