Italian regulator hits Shein with 1 million euro greenwashing fine

ROME (Reuters) -Italy's competition authority (AGCM) imposed a 1 million euro ($1.16 million) fine on China-founded online fast fashion retailer Shein on Monday for misleading customers about the environmental impact of its products.

It is Shein's second financial sanction by a European competition authority in little more than a month, after France fined the company 40 million euros on July 3 over fake discounts and misleading environmental claims.

The Italian fine was imposed on Infinite Styles Services Co. Limited, a Dublin-based company that operates Shein's website in Europe, following an investigation by AGCM launched last September.

In a statement, Shein said it has cooperated fully with AGCM and took immediate action to address the concerns raised.

AGCM said the environmental sustainability and social responsibility messages on Shein's website "were sometimes vague, generic, and/or overly emphatic, and in other cases omitted and misleading."

Shein's claims on circular system design and product recyclability "were found to be false or at the very least confusing", and the green credentials of its 'evoluSHEIN by design' collection were overstated, the regulator said.

Shein promotes the 'evoluSHEIN by design' collection as clothes made using more sustainable and responsible manufacturing.

AGCM said consumers could be misled to think that the collection was made with materials that are fully recyclable, "a fact that, considering the fibres used and currently existing recycling systems, is untrue".

Shein, in its statement, said: "We have strengthened our internal review processes and improved our website to ensure that all environmental claims are clear, verifiable, and compliant with regulations."

AGCM also took issue with Shein's "vague and generic" commitments to cut greenhouse emissions by 25% by 2030 and to net zero by 2050, noting that Shein's emissions increased in 2023 and 2024.

The Italian regulator said its overall assessment was influenced by an "increased duty of care" falling on Shein, "because it operates in a highly polluting sector and with highly polluting methods".

AGCM is in charge of consumer protection as well as competition.

($1 = 0.8642 euros)

(Reporting by Alvise Armellini, additional reporting by Helen Reid in London, editing by Cristina Carlevaro and Susan Fenton)