The latest scrutiny for Shein is coming by way of Italy’s competition and market regulator, which is probing an entity affiliated with the ultra-fast fashion titan for allegedly attempting to covey the false “image of production and commercial sustainability of its garments.” The Autorità Garante della Concorrenza e del Mercato (“AGCM”) revealed on Wednesday that its greenwashing-centric investigation into Shein (via Styles Services Co. Limited, which manages the company’s Italian e-commerce site) stems from promotional messages on the company’s website “regarding the environmental sustainability of Shein-branded clothing items,” which it claims could be “misleading” to consumers.
In furtherance of the greenwashing probe, the AGCM points to the “possibl[y] misleading nature of some environmental claims contained in the ‘#SHEINTHEKNOW’, ‘evoluSHEIN’, and ‘Social Responsibility’ sections of the shein.com website.” According to the regulator, given the “growing sensitivity of consumers regarding the impact of their consumption choices on the environment,” Shein may be on the hook for trying to make it appear as though it – and its offerings – are more sustainable than they really use thanks to its use of “generic, vague, confusing and/or misleading environmental claims” regarding “circularity,” “product quality,” and “responsible consumption.”
At the same time, the AGCM pointed to information about Shein’s “evoluSHEIN” collection, which the company allegedly markets as being “sustainable” by the company, stating that consumers could be duped here regarding the amount of “green” fibers that are actually being used. Shein is also potentially running afoul of advertising rules by failing to inform consumers that the clothing items are not further recyclable, the regulator asserts.
Still yet, the competition and market claims that Shein has “generically emphasize[d]” its commitment to climate initiatives “in the context of the decarbonization process of its activities.” The issue here, according to the AGCM, is that “the objectives indicated on the [Shein] website appear to be contradicted by the significant increase in greenhouse gas emissions indicated in Shein’s sustainability reports for 2022 and 2023.”
In accordance with Italian law, companies found in breach of consumer rights rules face fines ranging from 5,000 euros to 10 million euros ($5,590-$11.2 million), per Reuters.
THE BIGGER PICTURE: The ACGM’s investigation comes amid an influx of ESG-focused legislation in the European Union, which will put pressure on the fashion industry to address their role in the climate equation. As recently as this summer, for example, the Council for the European Union adopted its initial position on an anti-greenwashing directive that aims to stop companies from making misleading claims about the environmental credentials of their products and services and to enable consumers to make “truly greener decisions when buying a product or using a service.” In a statement in June, the European Council revealed its “general approach” to the Green Claims Directive, which it says will form the basis for negotiations with the European Parliament on the final shape of the directive during the upcoming EU legislative session.
Focused primarily on consumer-facing environmental claims that companies make about themselves, as well as their products/services, the Green Claims Directive – which will apply to the vast majority of EU operating companies – will introduce new minimum substantiation requirements and mandate that companies making environmental claims communicate them accurately and have them verified by a third-party before being published. Additionally, it will prohibit the use of generic environmental claims (such as “eco-friendly”, “eco”, “green”, “sustainable”, “made of 100% recycled plastic” and “climate neutral”) unless they are based on demonstrated environmental performance.
Not limited to the EU, the Green Claims Directive and the Green Transition Directive – paired with existing litigation on the false advertising front – “illustrate the high level of concern among governments and regulators,” as well as consumer plaintiffs, “about misleading green claims, [and] underline the need to ensure that any such claims are supported by robust evidence – even to comply with the existing regulatory frameworks” in the EU, the United Kingdom, and beyond.
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