SHEIN's ESG Report Card: Beyond Small-Batch Fast Reorder Model, Second-Hand Marketplace Accelerates Circular Economy

【Ebrun Original】On September 1, Shein International Holdings Limited (hereinafter referred to as "SHEIN") was officially listed on the Hong Kong Stock Exchange, with an offering price of HK$48.56 per share, an offering market capitalization of approximately HK$206.2 billion, a latest market capitalization of HK$187.6 billion, and total fundraising exceeding HK$13.5 billion.

While the market is focusing on its stock price performance and growth potential, a substantial "ESG report card" has also come to the forefront. For SHEIN, which has disrupted the traditional apparel industry with its "small-batch fast reorder" model, its performance across environmental, social and governance dimensions is not only a key factor for investors to evaluate its long-term value, but also relevant to whether this new-generation global enterprise can win the trust of regulators and the public.

According to its prospectus, ESG is also one of the high-frequency topics.

SHEIN stated that its proprietary LATR model will deliver more positive environmental impacts, reflected in an innovative operation model that reduces waste (lowering overproduction and cutting inventory waste), initiatives throughout the entire value chain (responsible design, material procurement, manufacturing, launching circular economy projects and announcing carbon emission reduction targets), and inclusive empowerment (offering inclusive products and providing entrepreneurial opportunities for SMEs, minority groups and female entrepreneurs).

In terms of supply chain management, SHEIN has established a supplier code of conduct and conducts on-site SRS audits. Based on SRS audit results, suppliers and subcontractors are assigned ratings of A, B, C, D or E. SHEIN will provide additional incentives to suppliers with A and B ratings, while suppliers with D or E ratings will be subject to closer monitoring. According to the prospectus, SHEIN completed approximately 4,200, 4,550 and 5,150 SRS on-site audits in 2023, 2024 and 2025 respectively, covering approximately 95% of contract manufacturers for the company's private label products by procurement value.

In terms of circular utilization, the SHEIN Exchange second-hand marketplace has been launched in the United States, France, the United Kingdom and Germany. It is reported that approximately 3.5 million new users joined the platform in 2025, bringing total active users to over 9.5 million. In 2025, approximately 78,400 independent sellers listed more than 83,700 products on the marketplace.

In addition, SHEIN has also listed environmental, social and governance issues as risk factors. In 2025, the Italian Competition Authority (AGCM) imposed a ?1 million fine on SHEIN for several sustainability-related statements on its website that may have misled consumers. SHEIN has removed the relevant content and submitted a compliance report.

The prospectus mentions that SHEIN must also comply with the EU's Corporate Sustainability Due Diligence Directive (CSDDD), which introduces a new penalty system that may open up new avenues for regulatory enforcement or litigation. Meanwhile, the EU's Ecodesign for Sustainable Products Regulation (ESPR), adopted in February 2026, prohibits the destruction of unsold consumer products starting from July 2026. SHEIN will need to adjust its inventory and return management processes, and violations of the ban may result in fines and exclusion from public procurement procedures. An increasing number of jurisdictions are imposing Extended Producer Responsibility (EPR) fees, leading to continuously rising compliance costs.

ESG is also one of the four major investment areas for SHEIN's IPO fundraising. SHEIN stated that it will promote other corporate responsibility initiatives and innovations, such as the adoption of priority materials and innovative production technologies, advancing decarbonization efforts, circular economy and waste reduction programs, and promoting fair empowerment across the entire value chain, with plans to implement these within the next 36 months.

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