Shein's stock market listing will not mask sustainability challenges

Shein is set to go public in Hong Kong, but the company faces significant sustainability challenges that could impact its valuation following the listing. Critics argue that Shein's low prices and fast fashion model encourage frequent, impulsive purchases, which conflicts with sustainability goals. The company has been under investigation by the European Commission and the US Federal Trade Commission for issues like fake discounts and alleged greenwashing.

Despite these investigations and previous fines in France and Italy, Shein has made efforts to address ESG concerns. However, investors remain skeptical, with concerns over labour conditions, governance structure, regulatory scrutiny, and the environmental impact of its high-volume business model. The company's dual-class share structure and CEO's dual role as CEO and chairman also raise questions about independent oversight.

Despite these challenges, Shein claims to have improved its supply chain, with 53% of suppliers receiving top grades in audits. The company's 2025 sustainability report highlights improvements, but investors remain cautious due to the potential for large fines and the risk of misaligned interests between management and shareholders.