Fashion retailer Shein faces a million-dollar penalty in Italy
The Italian Competition Authority (AGCM) has imposed a fine of €1 million on Asian fast-fashion online retailer Shein for violating environmental marketing regulations. The fine was issued due to Shein's misleading communication on its Italian website about the environmental properties of its products.
The AGCM found that Shein's claims on its "SHEINTHEKNOW," "evoluSHEIN," and "Social Responsibility" web sections included statements that overstated the environmental benefits or omitted essential facts, misleading consumers about the company's sustainability efforts.
One of the main concerns was the marketing of the "evoluSHEIN by design" clothing line, which was promoted using terms like "green fibers" without clear evidence or explanation of environmental benefits. Consumers were misled into believing the line was fully recyclable, which is false given the fiber composition and current recycling limitations.
Shein's claims about reducing greenhouse gas emissions by 25% by 2030 and achieving net zero by 2050 were deemed vague, generic, and unsubstantiated. The AGCM stated that these announcements reflected a lack of specificity and contradicted the reported increase in emissions in 2023 and 2024.
The AGCM criticised Shein for not mentioning the specific measures it has taken to address the raised concerns about its environmental claims. However, Shein has expressed remorse and stated that it has taken necessary measures to address the issues.
The Italian Competition Authority's fine is a reflection of Italy's enforcement of truthfulness in ESG (Environmental, Social, Governance) claims. The authority has not issued any fines or penalties related to Shein's greenhouse gas emissions.
The authority has not yet specified if Shein has been given a deadline to make these improvements or if further action will be taken. Shein has not responded to the authority's criticisms regarding the specificity and contradictions in its greenhouse gas reduction targets.
This fine serves as a reminder to all companies to ensure that their environmental claims are clear, specific, and comply with relevant regulations to avoid greenwashing.
[1] AGCM Press Release: https://www.agcm.it/it/notizie/comunicati-stampa/2023-05-30-sanzioni-contro-shein [2] AGCM Investigation Report: https://www.agcm.it/it/notizie/pubblicazioni/2023-05-30-decisione-contro-shein [3] Shein's Sustainability Report: https://www.shein.com/us/en/about/sustainability [4] Shein's Italian Website: https://www.shein.it/ [5] Greenpeace Report on Shein's Environmental Performance: https://www.greenpeace.org/usa/2021/03/greenpeace-report-reveals-shein-investing-in-greenwashing-not-real-change/
- The Italian Competition Authority (AGCM) has shown its commitment to upholding community policies and maintaining truthfulness in Environmental, Social, and Governance (ESG) claims, as evident in their €1 million fine against Shein for misleading environmental marketing.
- Given the AGCM's concern about Shein's financial standing and its business operations, it is crucial for the company to disclose specific measures taken to address environmental concerns and provide accurate information about product sustainability in all aspects of its business, including finance, environment, and environment.
