Online fashion retailer Shein has launched a USD 50 million extended producer responsibility (EPR) fund that will go towards global textile waste management and developing a circular economy over the next five years.
Extended producer responsibility is a policy approach under which producers take significant responsibility for the disposal of products that are no longer used by consumers. The adoption of an EPR system aims to incentivize the design of products in a way that would make them recyclable or reusable to minimize their environmental impact.
The first recipient of the fund is Or Foundation, a US and Ghana-based nonprofit that is working to reduce the social and environmental impact of fashion, including the problem of textile waste in Accra, Ghana, home to Kantamanto Market, the largest second-hand clothing bazaar in the world.
The foundation will receive USD 5 million annually from the fund over a three-year period. The grant will be used to support apprenticeship programs, the incubation of textile recycling businesses, and improve work conditions at Kantamanto.
“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,” said Adam Whinston, global head of environmental, social, and governance at Shein.
Founded in 2008, Shein is an online retailer that has become one of the world’s largest fast fashion marketplaces by appealing to the budget-conscious Gen Z generation with its low prices.
In 2021, Shein overtook Amazon to become the most downloaded shopping app in the US. The brand’s meteoric rise has not been without controversy. While the company operates an on-demand production model that is said to limit excess inventory and waste, it faces criticism over its environmental footprint.
Nevertheless, Shein has ramped up its sustainability efforts in recent years. In April this year, the company launched the evoluSHEIN collection, a new line that features inclusive sizing and is made with responsibly sourced materials such as recycled polyester and forest-friendly viscose. The packaging in this collection is also made from 100% recycled materials.