Shein, Nike and Fashion’s Widening Sustainability Gap

Hello, and a happy Friday,

This is Shayeza Walid, The Business of Fashion‘s sustainability reporter, writing to you from a not-so-frosty London, after a snowy, blustery cold week in Copenhagen, where I was attending the 20th edition of Copenhagen Fashion Week.

There’s a lot of doom and gloom in the world, and in fashion right now — especially in the case of sustainability — which has slid down the corporate agenda amidst geopolitical, economic uncertainty and been hit with a slew of regulatory backtracks in a more pro-business EU.

But if my time in the Danish capital proved anything, it’s that there is promise.

In 2020, Copenhagen Fashion Week became the first to introduce minimum sustainability requirements for a brand to appear on its official show schedule, spanning from material sourcing to the environmental footprint of runway productions. This year, the strictest requirements were put in place, underscoring the event’s commitment and decision to double down on sustainability at a time when fashion’s momentum on it feels diminished.

“Whenever there’s uncertainty in the world, sustainability conversations tend to go flat,” industry veteran and retail consultant Julie Gilhart, told me during our chat on CPHFW’s trajectory and impact, despite it being a modest fashion week compared to counterparts in Paris, Milan and New York. “Survival mode takes over. But that’s exactly why models like Copenhagen’s matter — they’re building something new, not trying to sustain an old system.”

And the event’s energy undoubtedly captured that.

In her closing speech at the fashion week’s final dinner, founder Eva Kruse, who you may also know for establishing non-profit, the Global Fashion Agenda, astutely remarked,” Fashion is one of the world’s largest and most resource intensive industries — we can’t just sit back and let that happen. … So with CPHFW we wanted to ask more of this industry. To be one that’s not only creative and beautiful, but also one that creates an impact.”

You can read our full coverage of how Copenhagen Fashion Week is defying the sustainability pullback here.

In the meantime, unfortunately, the impact Kruse mentioned is yet to be seen.

In this edition:

• Fashion is off track on its decarbonisation goals, as industry coalition Cascale reports in its latest State of the Industry 2026 report.
• It’s been a messy week for Shein, which had to update its net-zero claims in Germany after pressure from a German environmental watchdog and was also rejected by Brazilian factories from setting up a production hub in the country.
• Labour abuse scandals plague fashion. A new ProPublica investigation found Nike has not been paying its Indonesian workers in accordance with its policy. Meanwhile Prada cut ties with more than 200 of its suppliers after an audit found compliance rules were not being followed.

Fashion’s Decarbonisation Progress Is Off Track

In its latest State of the Industry report sustainable industry coalition Cascale found only marginal progress in the industry cutting factory emissions, with renewable energy adoption stalled and a small group of large manufacturers driving the bulk of pollution.

Greenhouse gas emissions across the apparel, footwear and textile sector rose 7.5 percent in 2023, as rising production volumes outpaced modest efficiency gains, a troubling signal as many major brands approach missed 2025 coal phase-out pledges and looming 2030 reduction targets.

Before I get into it, off the bat, the findings don’t signal much progress from some of the world’s largest fashion companies, many of whom had set out coal phase out targets for 2025, to be reflected in their upcoming 2026 sustainability reports.

Drawing on data from more than 1,800 Tier 1 and Tier 2 factories, the report found only marginal improvement in Effective Energy Carbon Intensity (EECI), the key metric tracking progress in decarbonising energy use, which remains the industry’s dominant source of Scope 1 and 2 emissions.

“The scope, scale and influence of our industry means it must play a vital role in decarbonisation,” said Joël Mertens, Cascale’s director of Higg Product Tools. “Yet while pockets of progress exist, the apparel, footwear and textiles industry is not decarbonising at the scale or speed so urgently required.”

Amongst its key findings, Cascale’s report underscored that coal remains a central obstacle — accounting for 31 percent of total industry energy consumption and 40 percent in material manufacturing such as in mills and dyehouses, while renewable energy use remained flat at 2 percent between 2023 and 2024.

Prominently, the findings reported that the majority of emissions are concentrated among a relatively small group of roughly 1,500 large, heat-intensive factories, particularly in Tier 2 operations, which drive a disproportionate share of industry pollution, presenting a major opportunity for targeted action., including faster electrification and scaled renewable investment, could deliver more meaningful reductions than broad industry-wide measures.

Mertens warns that incremental progress won’t be enough to meet climate goals: “The sector’s greenhouse gas emissions continue to move further away from the required reductions to limit global warming to 1.5°C. The reality is we urgently need the whole industry to do much more to combat climate change.”

No single company can solve the problem alone, said Mertens. “Amid the industry’s complex web of globalised supply chains, siloed efforts, brands and retailers trying to cut their own emissions, just won’t be enough. The industry needs a unified approach.”

Cascale is calling for accelerated coal phase-outs, deeper engagement with high-impact suppliers, expanded electrification of industrial processes and significantly increased investment in renewable energy, driven through long-term collaboration between brands and manufacturers.

Going forward, the industry coalition said it plans to publish the State of the Industry report annually to track decarbonisation progress and expand access to aggregated supply-chain data, positioning the findings as a roadmap for coordinated climate action across the fashion industry.

Whether the guidance will see actionable change, however, is up in the air.

More Shame for Shein

Shein’s sustainability narrative took another blow this week, as German regulators intensified scrutiny of the ultra-fast fashion giant’s climate claims — at a moment when the company is already emerging as the most polluting large player in the industry.

Germany’s environmental watchdog Deutsche Umwelthilfe (DUH) has forced Shein to either substantiate or remove its net-zero pledges from marketing materials on its German website after finding the claims lacked credible evidence.

“Companies cannot simply advertise with vague net-zero promises without clearly explaining how these goals will be achieved,” said Viola Wohlgemuth, DUH’s senior expert on textiles and circular economy.

Those regulatory pressures come amid stark emissions data that paint a troubling picture of the company’s environmental footprint. Shein has rapidly increased its carbon output. Its total greenhouse gas emissions rose roughly 23 percent year on year, according to its latest sustainability disclosures, albeit the company only set goals to reduce emissions in 2023.

Taken together with broader industry analyses, Shein now ranks the most polluting major fashion company globally, eclipsing legacy brands that have invested in sustainability teams and climate reporting for years.

In a statement to BoF, Shein said it had “engaged constructively with DUH over recent months,” adding that it had published additional information on its website to provide “greater transparency around its sustainability targets, data and progress.” The company said it welcomed the engagement as part of its commitment to ongoing dialogue with stakeholders.

But Wohlgemuth said subsequent reviews of Shein’s revised sustainability messaging identified further breaches, including allegedly misleading product claims such as “environmentally friendly,” “local” and “100% natural,” prompting additional legal steps communicated to the company last week. DUH said Shein has not yet responded.

On top of its green claims issue, this week Reuters reported setbacks in Shein’s attempt to localise production in Brazil. The company pledged in 2023 to invest about $150 million to build a manufacturing hub and partner with thousands of local factories. That effort has largely stalled after Shein’s demands for steeper price cuts and faster delivery times clashed with Brazilian suppliers’ capacities, prompting many to walk away.

Workers and union representatives told Reuters that the ultra-fast model, built on hyper-responsive, low-cost supply chains in China, has proved difficult to replicate under Brazil’s labour laws and logistical realities.

Separately, DUH has been urging Germany’s environment minister, Carsten Schneider, to accelerate extended producer responsibility rules for fashion, ensuring textile waste regulations apply to platforms like Shein and are effectively enforced.

The latest incidents also come on top of newly reported EU investigations this month into the sale of illegal products on Shein’s platform — though the European Commission said the site is unlikely to face suspension.

Taken together, these developments highlight persistent gaps between Shein’s sustainability rhetoric and both regulatory expectations and operational realities — raising broader questions about accountability in a business model built on speed and scale.

Action and Inaction on Labour Abuse

Labour rights abuses in fashion’s supply chain are again exposing a stark divide between fashion’s sustainability marketing and conditions on the ground.

A ProPublica and The Oregonian investigation into Nike’s supply chain found that the company’s long-touted wage data may mask widespread low pay and poor conditions in its factories.

Nike has long said that its contract factory workers earn, on average, roughly 1.9 times the local minimum wage, a figure the brand uses to signal progress on living wages and fair pay.

But ProPublica’s reporting — based on interviews with about 100 workers at more than 10 Nike-affiliated factories in Indonesia, one of its largest production hubs — found none of those workers said they earned anything close to that average. Most described wages nearer the local minimum, roughly $150–$200 a month, far below what many workers and advocates consider a living wage.

Workers’ representatives were blunt. One union official told reporters that Nike’s wage claims were “bullshit,” arguing that averaging from a subset of higher-paid roles obscures systemic low pay across most workers.

Nike, for its part, defended the figure in an open letter to The Oregonian as a global average based on a subset of roughly 700,000 workers, and said it has programmes in place to improve wages and conditions. Meanwhile, critics say the gap between the data and workers’ lived realities highlights how corporate reporting can gloss over on-the-ground abuses.

This is not Nike’s first major labour controversy. After nearly five years of sustained pressure from labour groups and advocacy campaigns over alleged wage theft and retaliation at a Thai supplier during the pandemic — including coercing migrant workers into giving up legally owed wages — Nike agreed to compensation payouts to around 3,300 affected workers late last year. The settlement, widely reported in industry and advocacy circles, came only after years of campaigning and legal pushback, with a notable compensation paid to one Burmese migrant worker who wrongly faced criminal charges and received $42,000 for the retaliatory harm he suffered, marks one of the largest compensation settlements in the garment industry to a single worker.

In contrast to Nike’s mixed record on labour abuses, Prada has taken a much more aggressive stance on compliance in its supply chain.

Reported by the Financial Times, Prada has conducted more than 850 on-site audits of Italian suppliers and subcontractors since 2020, exposing systemic breaches of labour laws and internal standards. The company has cut ties with over 200 suppliers — more than a quarter in 2025 alone — after finding issues such as unauthorised subcontracting, safety violations and mistreatment of workers.

Prada framed these moves as part of a zero-tolerance policy on labour abuses, a posture that comes amid broader scrutiny by Italian prosecutors of worker treatment in luxury supply chains.

Combined, these two developments highlight a critical choice facing fashion companies: whether to lean on averaged data and broad claims, or to confront abuses directly and act on what audits reveal.

But ultimately for millions of garment and shoe factory workers around the world these decisions are a reality – the difference between rhetoric and real action can mean either subsistence wages and a fair day’s pay.

As such fashion needs to realise that the industry’s current patchwork approach to labour rights cannot continue business as usual for any longer.

What Else You Need to Know

Prada Acts on Luxury Labour Abuse: Prada cuts ties with over 200 Suppliers after a labour abuse audit the company began in 2020 found that more than a quarter of suppliers and subcontractors inspected had broken compliance rules. [The Business of Fashion]

Trump’s Anti-DEI Crusade Targets Nike: The US Equal Employment Opportunity Commission has opened an investigation into Nike, alleging the sportswear giant discriminated against white employees, including through its DEI programmes. [The Business of Fashion]

Hope for a Luxury Resale Platform: Vestiaire Collective CEO Bernard Osta said the company expects to rake in its first annual profits in 2026, more than 15 years after the fashion resale platform was created, as it eyes expansion in the US. [Bloomberg]

USAID’s Rollback Has Affected Global Labour Rights Funding: A year after the Trump administration cancelled hundreds of millions in labour rights funding through USAID, including for garment workers around the world, hard-won gains are now at risk. [The Financial Times]