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This is an op-ed by Hakan Karaosman and Donna Marshall

SHEIN recently announced an Extended Producer Responsibility (EPR) fund giving US$50m over five years to support global causes such as textile waste management and circular economy initiatives. As part of this fund, SHEIN will donate US$15m over the next three years, to the US and Ghana-based not-for-profit organization OR Foundation, for textile waste management and community development in Ghana, Africa.

SHEIN is valued at US$100bn which is more than H&M and Zara combined, and makes up to 10,000 new products every day for as little as US$7. It ships to more than 150 countries and, as with most fast fashion players, there is a concern about the final destination of returned items which are not fit for resale. Textile waste is forecast to increase from 57 million to 148 million tonnes by 2030 with 73% of clothing thrown away ending up in incineration plants or landfills.

However, SHEIN’s philanthropic strategy has been shown time and again to mask the true cost of overproduction: huge environmental impacts and great individual and social costs to people and communities in developing countries such as Ghana.

Philanthropy is a form of social offsetting, similar to carbon offsetting where a company buys credits for the emissions they produce by investing in ‘green’ or ‘blue’ initiatives elsewhere, but does not tackle the root cause of the emissions. SHEIN is buying social credits for overproduction in China and exploitation of workers in developing countries by funnelling money into textile waste management and community development in Ghana, where they are largely responsible for these problems.

SHEIN’s ultra-fast production cycle and growth-driven business model perpetuates environmental, social and creative degradation (designers and artists claim their work has been copied and stolen by SHEIN) and cannot be offset by philanthropic funds that amount to a license to overproduce.

Ghana is economically challenged with various social problems. 24 per cent of Ghana’s approximately 30 million population live below the national poverty line; four out of ten women of reproductive age are anaemic; and one out of five preschool children is malnourished. In addition, lack of climate change measures has resulted in environmental degradation, with disrupted agricultural systems and floods taking their toll on Ghana’s finances and its population’s health.

The Global North uses Ghana as the ultimate landfill where waste, most notably textile waste, is continuously dumped. Every week 15 million waste garments enter Kantamanto, the world’s largest second-hand clothing market. Here, 30,000 people work six days a week, taking out exorbitant loans and working in perilous conditions, which has led to the deaths of infants and serious injuries to children and workers who have to clean, fix, upcycle and sell the waste clothing generated by the Global North.

Providing financial support to a Ghana-based organisation at the intersection of environmental and social issues might be perceived inspirational, and even ground-breaking.

“SHEIN has set an ambitious impact agenda, and we are thrilled to be partnering with The OR Foundation, the initial recipient of SHEIN’s trailblazing fund, for the next step in our journey. Addressing second-hand waste is an important part of the fashion ecosystem that is often overlooked. We have an opportunity to make change in this space and we look forward to working with The OR Foundation on this first of its kind effort,” said Adam Whinston, global head of ESG at SHEIN.

However, this development perspective has fundamental flaws. The fashion industry is characterised by severe power imbalances and fashion brands benefit from their privileged positions to maintain the status quo.

SHEIN has a vaguely defined impact agenda and wants to partner with the OR foundation to address the overlooked textile waste problem. It implicitly suggests that textile waste can only be addressed by the power holder, a rich fashion brand, and yet their business can only flourish as long as clothing is overproduced and overdistributed through globally connected, complex and dispersed supply networks.

Fashion brands hold all the power in the fashion industry, but they are geographically and emotionally detached from their supply networks and the workers in them. We have conducted various multi-tier supply chain studies and our results suggest that when fashion brands get involved in sustainability initiatives, either to help the environment or workers in supply chains, they dominate the conversations and set the agenda. Supplier and workers are excluded and systemic problems caused by the brands’ business models are never discussed.

SHEIN’s EPR fund will create dual advantages for SHEIN: they will protect their commercial interests while creating a positive public, and more importantly, shareholder image through risk-control measures. However, this social offsetting will widen the gap between supply chain sustainability and environmental, social, creative and emotional resources exploited by SHEIN’s own business practices.

Social offsetting is another market-based solution to ensure business-as-usual for fashion brands. These initiatives stall the desperately needed whole system and paradigm changes imperative to transform the fashion industry. Climate change is the biggest threat to humanity, and we need environmentally and socially just ways to transition to a more sustainable fashion industry. Therefore, we must challenge the hidden agendas and incremental actions aimed to protect the status quo and legitimise destructive business practices. As proposed in the Union of Concerned Researchers in Fashion’s manifesto, we need whole systems approaches where the fashion industry resets from an economic-growth logic to an Earth logic. This cannot be done until the root causes of the environmental and social problems of the fashion industry are addressed.

SHEIN’s fund fails to understand the dynamic and paradoxical nature of sustainability. Pursuing a capitalist agenda based on growth and eco-efficiency or, so-called, community development, will only drive overproduction and benefit SHEIN not the communities or people working across their fragmented and opaque supply chains.

The culture of fashion is characterised by lack of transparency, power imbalance and lack of inclusion, and these very characteristics impede our transition to a just and circular fashion industry. We need participatory and inclusive social dialogue with suppliers, workers and unions, particularly in developing countries, to develop mechanisms to tackle fashion’s insurmountable environmental and social problems rather ‘solutions’ such as social offsetting.

Fashion’s systemic problems will be perpetuated if companies like SHEIN keep diverting our attention from the root cause of fashion’s problems: overproduction and social exploitation. Fashion brands have a responsibility to ensure people-led, scientific, independent, holistic, and inclusive strategies to move beyond industry-funded window-dressing and social offsetting. We need a radical and just transformation of this currently unsustainable and destructive industry.

About the authors

Donna Marshall is professor of supply chain management at University College Dublin

Hakan Karaosman is a postdoctoral researcher at University College Dublin and chair of the Union of Concerned Researchers in Fashion


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