BEAUTIFUL! SHEIN Launches €200m in Circularity Funding to Boost Recycling

This initiative comes as the fashion industry, particularly the fast-fashion sector, faces increasing scrutiny over its environmental impact. The European Commission has proposed regulations to promote sustainable textile waste management and ensure producers are responsible for the full lifecycle of their products. Currently, only 22% of post-consumer textile waste is collected for reuse or recycling, with the majority ending up in landfills or being incinerated. Textiles rank fourth in terms of climate change impact and environmental degradation, significantly affecting water and land use, as well as greenhouse gas emissions.

Fast fashion exacerbates these issues by flooding the market with low-cost items that do not account for environmental externalities, leading to higher volumes of clothing purchases and increased waste.

SHEIN’s new fund aims to support startups and businesses across Europe and the UK that are pioneering next-generation circularity technologies. The fund will invest in early-stage startups focused on innovations in textile-to-textile recycling and related areas. Additionally, it will establish off take agreements and commercial partnerships with more mature startups that have existing production capacities in recycled materials or new preferred fibers.

This launch aligns with SHEIN’s 2022 commitment to reducing value chain emissions, targeting a 25% reduction in Scope 3 emissions by 2030. According to SHEIN’s latest ESG report, Scope 3 emissions constitute over 99% of the company’s greenhouse gas footprint, predominantly originating from its product supply chain.

SHEIN will be the cornerstone investor in the new Circularity Fund and is inviting businesses, financial institutions, and sovereign wealth funds globally to co-invest. This strategic move underscores SHEIN’s commitment to fostering sustainable practices within the fashion industry.