The €200m Circularity Fund from Shein will focus on supporting start-ups and businesses developing innovative technologies in textile-to-textile recycling and other circularity initiatives. The fast fashion online retailer plans to invest in early-stage start-ups as well as more mature companies with existing production capacity in recycled materials and preferred fibres.

In addition to the Circularity Fund, Shein has earmarked €50m for initiatives supporting brands, designers, and artisans across the UK and EU. This includes expanding the Shein X designer incubator programme and creating a dedicated initiative to help UK and European businesses join Shein’s Marketplace platform.

The fund builds upon Shein’s existing sustainability efforts, which include:

  • Partnering with Queen of Raw to source surplus or “deadstock” fabric from other brands: These rescued materials, which were destined for landfills or incinerators, are now used to make new Shein garments. In 2023, Shein integrated Queen of Raw’s proprietary Materia MX software into the retailer’s sourcing system, enhancing the flow of materials data between platforms
  • Increasing the adoption of cool transfer denim printing technology among Shein suppliers: This technology, which uses innovative high-fixation ink in place of conventional indigo dyes uses significantly less water than traditional denim washing methods
  • A multi-year research partnership with academic institutions studying how to achieve commercially scalable production of recycled polyester fibres through chemical recycling: The research partnership was launched in 2023 and has since successfully produced experimental recycled polyester material.

Shein’s executive chairman Donald Tang emphasised the company’s role in accelerating innovations to address the fashion industry’s environmental footprint.

He said: “Given Shein’s scale and reach, Shein can become a catalyst for the widespread adoption of these solutions across the industry.

 “All across Europe and the UK we have identified a rich and diverse pool of designers, brands, and craftspeople who we know can reach a much wider audience on our platform and who we are confident can successfully scale up their businesses with Shein”.

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The ESG investment follows Shein becoming the subject of a legal campaign launched by the human rights group Stop Uyghur Genocide, which hopes to block the fast fashion giant’s possible initial public offering (IPO) in London later this year.

Reuters claims two separate sources have confirmed Shein’s IPO papers were filed “in early June” and the company is said to be seeking a valuation of as much as $90bn, which would propel it into the top-10 biggest companies on the FTSE 100.