For Shein and other fast fashion offenders, ESG washing isn’t the answer
If reports are to be believed, Chinese fast fashion giant Shein is trying to redeem itself, changing its image to justify a steadily declining $100 billion valuation ahead of an ambitious 2024 IPO. a lot of work to do. While the company controls most of the category at 28%, with revenue of $15.7 billion in 2021, it is also among the worst in environmental sustainability, social justice and governance. business (ESG). To keep prices low and remain relatively free from regulation, it relies on suppliers in China, where Uyghur populations suffer from forced labor and unsafe working conditions. Plus, with wasteful environmental practices entrenched in its model, fast fashion is so harmful that most regulators believe it’s irremediable. As the king of fast fashion, Shein has a lot to answer for.
Yet as the company hires new sustainability-focused leaders and promises a conscious new approach, its efforts to market an enthusiastic ambition to jump on the ESG bandwagon should set it on the path to redemption, right? not ? Not enough.
ESG is not a marketing tactic
Companies, including fast fashion, often fundamentally misunderstand ESG. As a result, many talking heads have mistakenly criticized ESG as a “corporate cancel culture,” reacting as if ESG is “woke” marketing or PR madness. Then others, like Shein, also hope to use ESG to their advantage by engaging in ESG messaging and storytelling without realizing that the model is, at its core, antithetical to ESG’s mission. save the planet.
For Shein and their contemporaries, ESG storytelling without business transformation is a thinly veiled strategy.
Addressing failed and superficial ESG efforts, Kenneth Pucker, former COO of Timberland, explained in Harvard Business Review that adjusting for climate change within a company’s current framework (called “metrics”) is flawed from the start. He added that simply increasing or decreasing the dials in these settings without changing the underlying systems will not yield any results.
For fast fashion, effective ESG demands that instead of existing within their usual parameters of manufacturing disposable garments and cynically moving a dial up or down, that they rethink their entire business, from manufacturing and pricing to employees and supply chains, with the goal of achieving true social justice and climate progress. For most companies, that’s a scary notion, especially if they’re doing it for reputational reasons. However, if a company realizes its responsibility and is obliged to actually help, the “demand” becomes more understandable despite its difficulty.
This is why for Shein and their contemporaries, ESG storytelling without corporate transformation is a thinly veiled strategy. Even companies with the best intentions, those that understand and are driven by the United Nations Sustainable Development Goals, struggle to meet the standards needed to truly create change. It is therefore impossible that companies that adopt ESG for storytelling alone can even hope to make a difference. And studies suggest that if they try to tell stories without making meaningful change, it won’t fly with the American consumer.
Transparency as a real strategy
While fast fashion may be irreparable, other fashion leaders are certainly ready to embed ESG into the heart of their organizations with the right guidance. It is important to find partners – whether it is an ESG or social impact advisory firm or agency – who can help provide this advice.
For example, the right partner can push fashion brands to open up their ESG successes. Having worked with global apparel brands, I can attest that their corporate cultures are still largely outdated and they tend to view their ESG innovations and successes as a competitive advantage. So they wouldn’t, for example, allow others to copy their revolutionary, organic system for cleaning chemicals from the water used in making clothes. They don’t see that it can be both a broader environmental benefit, as well as their company’s story and how they want to help others make change.
While fast fashion may be irreparable, other fashion leaders are certainly ready to embed ESG into the heart of their organizations with the right guidance.
Partners can also encourage truth and humility in a brand’s ESG approach. After all, there is no truly sustainable fashion. All fashion practices cause environmental damage. Understanding this can allow an organization to define both its actions and its messages and help consumers learn how to mitigate this negative impact by avoiding excessive purchases and waste. Patagonia’s famous “Don’t Buy This Jacket” ad was based on this philosophy and could be leveraged industry-wide.
This commitment to truth also extends to reporting, a contested and ineffective building block of ESG that nonetheless requires oversight and verification. Consulting firms and agencies can help bridge the gap between fashion brands and these third-party “verifiers.” Organizations such as the Fair Labor Association or the US Cotton Trust Protocol can provide real metrics in ESG reports that prioritize impact.
While it’s impossible for fast fashion to be, or claim to be, eco-friendly, other fashion brands (and partners who help tell their ESG stories) can contribute to the industry shift needed to really do good for our planet and our future.