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Shein, the fast-fashion giant, has disclosed finding two instances of child labor in its supply chain last year, according to its recent annual sustainability report.
The company, which sources primarily from China, identified minors under the age of 15 working with some of its suppliers. Although Shein did not specify the locations of these incidents, it has taken significant measures to address the issues.
Shein Faces Scrutiny Over Labor Practices
Upon discovering these violations, Shein suspended orders from the affected suppliers and swiftly took corrective actions. This included terminating contracts with the underage workers and ensuring they received any outstanding wages. The company has since resumed business with these manufacturers after they improved their hiring practices to prevent future violations, according to AP News.
The report's release comes amid scrutiny from advocacy groups like Amnesty International UK, which has raised concerns about Shein's labor practices and environmental impact. These groups have voiced opposition to Shein's potential listing on the London Stock Exchange due to these issues.
Shein, originally founded in China and now headquartered in Singapore, had previously sought to go public in the US through a confidential IPO application. The company is also preparing to release its 2023 sustainability report, which will be closely examined by investors.
In response to the child labor incidents, Shein has updated its policies to strengthen its oversight of suppliers. Previously, suppliers found in violation of labor standards had 30 days to address the issues before orders were suspended.
Under the new policy, Shein will sever ties with suppliers found in violation without delay. This change reflects the company's commitment to improving supply chain governance.
The report also highlights a decrease in the rate of serious violations found during audits, which dropped from 1.8% in 2021 to 0.1% in 2023. Shein has increased its audit frequency significantly, conducting 3,990 audits in 2023 compared to 664 in 2021. Most of these audits are performed by external agencies like Bureau Veritas and SGS.
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Shein's Carbon Emissions Rise
Shein has also made strides in its sustainability efforts, particularly regarding its carbon footprint. The company reported a significant rise in carbon emissions from transportation, reaching 6.35 million tonnes of CO2 equivalent in 2023.
This increase is attributed to the use of air freight for shipping products directly from China to customers. However, Shein has begun sourcing from suppliers in Turkey and Brazil to reduce transportation emissions and has reported a reduction of 49,578 tonnes of CO2 by shifting to sea and land freight.
The company's commitment to reducing emissions includes submitting its targets to the Science-Based Targets Initiative for validation. Additionally, Shein formed a sustainability committee at the board level in July of the previous year, comprising key figures such as CEO Sky Xu and representatives from major investment firms, CNN reported.
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