Cheaper than stores and trendier than Amazon, fast fashion has plenty of benefits. The world’s largest fast fashion retailer Shein understands those benefits well, and perhaps better than anyone. Since 2008, the company has worked to produce inexpensive versions of trendy items, quickly and efficiently.

But instead of the benefits, environmental groups highlight the downsides of fast fashion and the deep concerns they evoke. In particular, the fast-fashion industry contributes significantly to textile waste, and much of the non-recyclable material included in the clothing ends up in landfills. Shein’s business model, which prioritizes speed and quantity nearly exclusively, is uniquely emblematic of the lack of sustainability that characterizes the entire market.

Seemingly bowing to pressures from environmentalists and regulatory agencies though, Shein recently announced a $270 million investment into more sustainable production methods. Approximately $220 million of that investment will go to the so-called Circularity Fund, devoted to developing textile-recycling technology. This investment is part of a broader corporate social responsibility strategy that Shein has described in a variety of recently released press statements, outlining its aims and efforts to integrate more sustainable practices across its operations.

Such responsiveness also looks like a smart strategic move. In particular, it appears that Shein is addressing consumer and legal expectations of sustainability practices now—that is, ahead of its potential public listing on the London Stock Exchange. With this initiative, Shein might be seeking to rebrand itself as a more responsible supplier of fast fashion. In addition, the Circularity Fund promises to contribute to significant waste reduction. The recycling technologies that result offer the promise of being adopted throughout the industry. Shein’s actions may could establish a precedent, encouraging competitors, in the fast fashion and other textile sectors, to adopt similar policies.

Even with this cautious optimism, Shein still has a number of problems to address. The scale of its actual (compared with its planned) investment remains to be seen. The amount of money committed also might be insufficient to alter Shein’s environmental footprint significantly. Others compare this commitment to those of companies with more established sustainability practices, underlying their questions about the sincerity of Shein’s long-term commitment.

Discussion Questions

1. Should there be regulatory guidelines limiting textile waste in the fast-fashion industry? What should they require?
2. What other solutions could inspire policy change?

Sources: Andrea Figueras, “Shein to Address Fashion Industry Waste Ahead of Potential Listing,” The Wall Street Journal, July 10, 2024; Devdiscourse News Desk, “Shein’s Big Investment: A Game Changer for UK and Europe,” Devdiscourse, July 9, 2024; Fibre2Fashion, “Fast Fashion Retailer Shein Announces $270 mn Investment in UK & EU,” July 11, 2024; “How to Bridge the Gap Between Fast Fashion and Sustainable Fashion,” Indian Retailer, November 10, 2022; OpenAI ChatGPT, “Assistance with Research on Shein’s Investment in Textile-Recycling Technologies,” ChatGPT, July 25, 2024.