Circular Economy

Shein Acknowledges Textile Waste with $50M EPR Commitment; But Critics Say It’s Small Change

What some are calling 'a significant step toward accountability' for fast fashion brands, others say is lip service and an inadequate approach to supporting waste-management efforts in communities deeply impacted by textile waste.

Published 2 years ago | About a 7 minute read

Image: Elias de Carvalho/Pexels

The Or Foundation — a US- and Ghana-based not-for-profit organization at the intersection of environmental justice, education and fashion development — and online fast fashion behemoth Shein have partnered to launch Shein’s $50 million Extended Producer Responsibility (EPR) Fund, aimed at advancing the design and implementation of ecological and social sustainability strategies focused on clothing that has entered the global secondhand clothing trade and is often discarded as waste.

The agreement is the first of its kind, establishing an annual commitment from the brand to support waste-management efforts in communities deeply impacted by textile waste. The agreement is part of Shein's newly announced EPR Fund, to which the company will dedicate $50 million over the next five years. The partners say the funds will go toward global causes aligned with Shein's commitment to global textile waste management and furthering the development of a circular economy, as well as any other EPR obligations.

The Or Foundation, whose tagline is “Too much clothing, not enough justice,” has brought global awareness to fashion's waste crisis through extensive research and action around the secondhand clothing trade as it manifests in Accra, Ghana — home to the largest secondhand clothing market in the world.

According to Quartz’s Alexander Onukwue, an estimated 15 million secondhand garments arrive in Ghana each week from Europe and North America, only about 60 percent of which prove useful; the rest pile up in landfills around Accra. This weekly influx of what’s known locally as “dead white man’s clothes” is leading to an overwhelming buildup of waste.

Through its new pledge, the Or Foundation says Shein is acknowledging that its clothing is part of that problem; it calls its agreement with Shein “a first step toward our goal of industry-wide reckoning.”

Liz Ricketts — co-founder and Executive Director of The Or Foundation — heralds the partnership, saying: "We have been calling on brands to pay the bill that is due to the communities who have been managing their waste, and this is a significant step toward accountability. What we see as truly revolutionary is Shein's acknowledgement that their clothing may be ending up here in Kantamanto [a massive secondhand clothing market in Accra], a simple fact that no other major fashion brand has been willing to state as yet."

Adam Whinston, Global Head of ESG at Shein, said: "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 secondhand 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."

As the initial grant recipient, receiving $5 million annually for three years from the overall Fund, the Or Foundation will utilize the resources to expand its Mabilgu (sisterhood) Apprenticeship Program for young women in Ghana who carry bales of secondhand clothing on their heads; incubate community businesses transforming textile waste into new products; pilot fiber-to-fiber initiatives with Ghanaian textile manufacturers; and upfit Kantamanto Market through a community-based vision to ensure that the world's largest secondhand clothing market is a safe and dignified place to work. The Foundation will also redistribute a portion of the initial grant to allied organizations in Ghana. Shein will work with The Or Foundation to identify additional grant recipients in other countries impacted by fashion's waste problem this year and in coming years.

The Foundation says the Shein partnership will help further its vision of ecological and economic prosperity that inspires global citizens to form a relationship with fashion that extends beyond their role as consumer. Until now, the Foundation’s work has been supported by the goodwill of individual citizens and small business owners, most of whom are not directly contributing to fashion's waste crisis itself. Shein’s EPR Fund marks a turning point.

"This is an empowering contribution for The Or Foundation, as we hope it will be for other organizations around the world, and we must not lose sight of the value that Kantamanto and communities like it bring to the movement toward circularity,” says Foundation Board Member Daniel Mawuli Quist. “We hope other brands will follow suit to focus on the people making a real difference."

As Marketplace recently pointed out, Shein’s on-demand manufacturing model, in theory, reduces the typical fast-fashion waste — it makes small batches of everything, which saves a lot in money and materials; and trains the customer not to be disappointed when things sell out, because they know more styles are on the way.

But as Vogue’s Emily Chan pointed out, critics flag the initiative as an extreme example of greenwashing, allowing Shein (which was recently valued at $100 billion) to continue with business as usual while paying lip service to the need to address its environmental impact.

“Apparently money can buy anything,” Livia Firth, founder of Eco-Age, wrote on Instagram following the Or Foundation announcement. “Partnering with Shein is actually like a stab in the back of sustainable fashion advocacy and takes us back years.”

The Or Foundation describes the EPR Fund as allowing “for financial compensation to flow in the same direction as clothing waste.” What it doesn’t do, Onukwue points out, is reduce the flow of clothing waste in the first place.

If judged as an attempt at a systemic solution – rather than as a “significant first step” the Foundation lauds it as — Shein’s EPR Fund has more holes than a pair of mesh leggings. But as Erin Williams recently pointed out with regard to fashion-industry greenwashing, there are steps in the right direction and nuances within sustainability ‘misses’ such as this which, if built on, will generate needed momentum — which, it seems, is how the Or Foundation sees this partnership with Shein.

As Ricketts told Vogue, “We’re accountable not to the sustainability community in the Global North; we are accountable to the Kantamanto community that has trusted us for years. [Imagine] if we told the community that we could finally get resources to do some of the things they’ve been saying they want to do, and we turned it down because we were afraid of Instagram comments.”

Meanwhile, Western governments are making piecemeal attempts to rein in their textile waste – most of which is exported to developing countries such as Ghana that resell as much of it as possible but lack sufficient infrastructure for recycling. In the UK, politicians have called on the government to change the law to require fashion retailers to comply with environmental standards. The government rejected most of the Environmental Audit Committee's recommendations in 2019 — including making apparel manufacturers pay for better clothing collection and recycling — but it has made textile waste a priority. Meanwhile, in March, the European Union proposed its own strategy for reducing throwaway culture by boosting the market for sustainably made textiles and requiring clothing (as well as furniture and smartphones) sold in Europe to be longer-lasting and easier to repair.

As Fashion Roundtable’s Tamara Cincik told the BBC, if adopted, the textiles strategy could create the desired ripple effects and set the tone for future legislation outside of the EU: "If expectations of brands in the UK compared to the EU diverge, this will hopefully encourage stronger expectations of future UK legislation."