Stockholm (NordSIP) – The effects of the European Union’s (EU) Green Claims Directive (GCD) are beginning to be felt by multinational corporations doing business withing the region. While the GCD is only expected to be fully integrated into each EU member state’s law within the next two years, Italy’s Competition Authority has launched an investigation into the environmental claims made by online retail giant SHEIN.
The aim of the GCD is to eliminate generic environmental claims made in product marketing that are not supported by proof, or that are certified by unrecognised verification schemes. Vague terms used in product labelling such as ‘nature-friendly’ or ‘green’ would no longer be permitted without substantiation based on recognised scientific evidence and state-of-the-art technical methodologies that provide evidence of full product lifecycle environmental impacts.
Regulatory net closing in on consumer sector greenwashing
The Italian investigation focuses on the SHEIN website, which promotes the firm’s purported sustainability credentials under various banners including ‘social responsibility,’ ‘evoluSHEIN,’ and #sheintheknow. The Italian regulator alleges that Infinite Styles Services Co, the Dublin-based operator of SHEIN’s European website is potentially misleading European customers by promoting so-called ‘green’ textiles without the necessary evidence. These materials are also not recyclable, which is not made apparent on the website. SHEIN is also accused of promoting its decarbonisation activities and climate goals despite overseeing a steady rise in its corporate emissions over the past few years.
Italy’s greenwashing investigation comes as SHEIN suffers a relative slowdown in sales revenues as Chinese rival Temu gains ground, particularly in the United Staes. SHEIN remains profitable as it continues to seek a public listing on the London Stock Exchange. This planned $66 billion initial public offering (IPO) follows the company’s rejection by regulators in the US. SHEIN continues to symbolise many of the drawbacks of mass consumerism, with its high carbon emissions accompanied by claims of chemical contamination and poor treatment of employees and sub-contractors.
