Shein's Carbon Emissions Rise Amidst Sustainability Challenges and Expansion Plans

In 2024, Shein's sustainability report revealed a 13.7% increase in carbon emissions from transporting its products. Furthermore, the company recalculated its 2023 transport emissions, finding them to be 18% higher than previously reported.

Shein primarily relies on air freight to deliver inexpensive clothing directly from its Chinese suppliers to customers in 150 global markets. This method is more carbon-intensive than the supply chains of traditional apparel retailers, which utilize container vessels for a larger portion of their shipping.

To mitigate emissions, reduce delivery times, and lower shipping costs, Shein plans to produce, package, and ship products closer to its customers. The company increased its use of sea freight and trucking in 2024, according to the report. Executive Chairman Donald Tang acknowledged that while progress is being made, the company is not yet perfect and has much more work to do.

In France, a revised fast fashion law has been approved, which could ban advertising by Shein and its competitor Temu. French lawmakers have expressed concerns about Shein's environmental impact.

Shein argues that its business model, which allows production based on demand, results in less unsold inventory compared to traditional retailers, thus minimizing waste. The company, founded in China and headquartered in Singapore, sources most of its products from 7,000 suppliers in China, with a growing network of factories in Brazil and Turkey.

In 2024, emissions from transporting products to and between Shein facilities, and to customers, including returns, reached 8.52 million metric tons of CO2 equivalent, an increase from 7.49 million metric tons of CO2e in 2023. Shein's 2024 transport emissions are significantly higher than those of Zara owner Inditex.

Shein's 2023 emissions were recalculated due to an updated methodology. The company is also facing pressure to diversify its supplier base due to tariffs imposed by the United States, its largest market.

The company is aiming to go public and has shifted its focus to a Hong Kong initial public offering. Shein has set emissions reduction targets, approved by the Science-Based Targets Initiative, aiming for a 25% reduction in Scope 3 (indirect) emissions by 2030, compared to 2023.

The sustainability report also indicated that Shein ended relationships with 12 suppliers in 2024 due to policy violations, up from five in 2023. The company conducted 4,288 on-site audits of its suppliers and subcontractors in China during the year, an increase from 3,990 in 2023.