Shein accused of ‘greenwashing’ website and misleading consumers, regulators claim
Fast fashion clothing retailer Shein is being investigated for misleading consumers into thinking the bargain-basement priced e-commerce giant is more environmentally sustainable than it really is, Italy’s consumer watchdog agency said.
Image by Yau Ming Low | Shutterstock
Fast fashion clothing retailer Shein is being investigated for misleading consumers into thinking the bargain-basement-priced e-commerce giant is more environmentally sustainable than it really is, Italy’s consumer watchdog agency said.
The Italian Competition and Market Authority, the nation’s quasi-government antitrust agency, announced on Wednesday it has launched a ‘greenwashing’ investigation into the Chinese-owned company.
According to the United Nations, ‘greenwashing’ is a deceptive marketing practice – in this case, online marketing – that uses false advertising to imply that a company is doing more to protect the environment than it actually is.
The Italian agency claims Shein’s advertising and promotional jargon posted on its website either misleads consumers or flat-out omits information about the environmental sustainability of the clothing it sells on the site.
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Shein, known for its inexpensive and low-quality women's tops and dresses, is accused of trying "to convey an image of production and commercial sustainability of its garments through generic, vague, confusing and/or misleading environmental claims," the antitrust agency said in a statement.
Planet over profits
Coined as a term in 1986, ‘greenwashing’ a website could include; falsely putting "green" or "eco-friendly" labels to describe products, policies, or practices; making exaggerated claims about a company’s sustainability impacts; and/or using images of nature or 'green' buzzwords despite any connection to the company's business, according to the UN and other climate change advocates.
Examples of website claims questioned by the Italian authority include Shein's use of the word “evoluSHEIN” to describe one of its clothing collections.
The agency said the wording could mislead consumers about the amount of "green" fabrics used to produce the item and imply that the garments are recyclable when they are not – a growing concern among younger generations. A certain portion of millennials and Gen Z shoppers pride themselves on choosing to forgo cheap clothing for more expensive yet sustainable options.
Other instances show the Shein website emphasizing its commitment to decarbonization, yet Shein's sustainability reports for the past two years show an actual increase in greenhouse gas emissions produced by the company.
The investigation specifically targets a Dublin-based company named Infinite Styles Services CO. Limited, which provides e-commerce services for the retail giant, although Infinite Styles shares the same Dublin-based address as Shein’s European headquarters.
According to EuroNews Green, Shein is “the biggest online-only retailer in the world, accounting for nearly a third of the fast fashion market in the US.”
The app became the most downloaded in the world this year and it's the most-mentioned brand on TikTok by far, the news outlet said, and that was back in 2021.
In response to the allegations, Shein said it was "ready to cooperate openly with relevant Italian authorities, providing the necessary support and information to address any inquiries"
Reuters reported that the company was also committed to complying with laws and regulations in the markets where it operates and to maintaining transparency with its customers.
EU cracks down on fast-fashion
The Shein investigation is the latest in a string of greenwashing cases launched by European regulators, attempting to crack down on deceptive environmental marketing practices.
In fact, a recent 2023 UN Fashion for Climate report found that 60% of sustainability claims by European fashion giants are “unsubstantiated” and “misleading,” according to the UN website.
Good on You, a fashion sustainability website that rates companies on “how ethical they are,” depicts Shein as a company to avoid, calling it “notorious for its murky practices” in an expose published last May.
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Italian Competition and Market Authority has also launched recent investigations into luxury fashion brands Armani and Dior, accusing them of “unlawful conduct in the promotion and sale of articles and clothing accessories” through operating illegal sweatshops.
Several anti-greenwashing regulations have come into effect this year and will be rolled out across various the EU nations over the next two years.
Some of the restrictions include banning the use of vague descriptions and environmental claims about products, including the use of labels such as "energy efficient" or "environmentally friendly."
The regulations say companies are prohibited from using these labels unless they have concrete proof to back them up.
"We're going through a green claims correction period, where companies are either going to be investigated and fined, or they go away and get the data to really substantiate and accurately communicate specific claims," said Abbie Morris, CEO of Compare Ethics, which checks green claims compliance for clients like Reformation and New Look.
Shein has been criticized in the past for accusations of poor worker treatment and dismal environmental records, but the latest greenwashing scrutiny is being blamed on reports that the online retailer is looking to list its shares on the London Stock Exchange.
Besides Dublin, Shein also has regional headquarters in the Middle East and Africa, with its global headquarters based in Singapore.
If found in violation of Italy's consumer protection laws, Shein could be fined anywhere from 5,000 to 10 million euros, the equivalent of roughly $5,600 to $11.2 million USD.