AI Accelerates Shein’s Ascent as Fast Fashion’s Top Polluter Amid Sustainability Challenges

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AI Contributions Lead Shein to Top the List of Fast Fashion's Major Polluters

This article was first published in Grist and is shared through the Climate Desk partnership.

In 2023, Shein, a colossal name in the fast-fashion industry, had a global presence. Aircraft transported compact parcels containing the brand's extremely affordable apparel from numerous suppliers to the mailboxes of millions of customers across 150 nations. The brand's fashionable offerings were promoted on social media by influencers through their “#sheinhaul” videos, which attracted billions of views.

Throughout the process, information was generated, gathered, and examined. To handle the vast amount of data, the fast fashion sector is now adopting cutting-edge artificial intelligence solutions. Shein employs its own machine learning tools, which are basically algorithms designed to recognize patterns. These tools assess consumer tastes instantaneously and forecast future needs, which are then met through a highly efficient supply chain.

As artificial intelligence accelerates the production of cost-effective, fashionable apparel, Shein is among the labels facing growing calls to enhance its environmental sustainability. The firm has committed to cutting its CO2 emissions by 25 percent by the year 2030 and aims to reach net-zero emissions by 2050 at the latest.

Environmental activists and experts argue that the rapid production methods and exclusively digital retail approach of the company significantly contribute to high levels of emissions. They also suggest that the application of artificial intelligence software to boost these processes may be increasing its carbon footprint. These worries were heightened by Shein's latest sustainability report, published toward the end of last month, revealing that the company's carbon dioxide emissions almost doubled from 2022 to 2023.

"Sage Lenier, the head of the environmental nonprofit Sustainable and Just Future, remarked that artificial intelligence has transformed fast fashion into an even more rapid industry, naming Shein and Temu as the pioneers of this shift," noted Lenier. "Without AI, their business models would be unfeasible." (Known for its swiftly growing online marketplace, Temu competes closely with Shein, offering a wide range of products at competitive prices and sales figures.)

Since its inception 12 years ago, Shein has emerged as a powerhouse in rapid fashion production, with its revenues purportedly reaching over $30 billion in 2023. Although the figures can vary, it's said that Shein can turn a new design into a finished product in as little as 10 days, and the website sees the addition of up to 10,000 new items daily. The company is believed to have around 600,000 products available for purchase at any time, with an average cost of about $10 per item. (Shein has not verified these figures.) According to a study, 44 percent of Generation Z consumers in the US make a purchase from Shein at least once per month.

The magnitude of this operation has significant repercussions on the environment. Shein's sustainability report for 2023 reveals that the company was responsible for releasing 16.7 million metric tons of carbon dioxide, an amount surpassing the emissions from four coal-fired power stations in a single year. Criticism has also been directed at Shein for its contribution to fabric waste, the proliferation of microplastic contamination, and practices that take advantage of workers. The report highlights that 76 percent of the company's fabric use is polyester, a material notorious for releasing microplastics into our ecosystems, with only a mere 6 percent of this polyester being sourced from recycled materials.

A recent probe revealed that employees at suppliers for Shein are frequently subjected to work weeks that exceed 75 hours, even though the company promised to enhance working conditions in its supply chain more than a year ago. Despite Shein’s sustainability report suggesting improvements in labor conditions, it also highlighted that in external evaluations conducted on more than 3,000 suppliers and subcontractors, 71 percent were rated C or below on the company’s grading scale from A to E, indicating at most, average performance.

Machine learning is a key component of Shein's operational strategy. Despite Peter Pernot-Day, the company's chief of global strategy and corporate affairs, initially stating to Business Insider in August that artificial intelligence did not play a major role in their business, he later suggested the opposite in a speech at a retail conference early this year.

Peter Pernot-Day is scheduled to address the audience at the Collision 2024 tech event in June.

"He mentioned that they're leveraging advanced machine-learning technologies to forecast demand precisely, which they believe is groundbreaking," he explained. Pernot-Day informed the attendees that every one of Shein’s 5,400 suppliers utilizes an AI-driven software platform that provides real-time updates on consumer tastes, enabling them to adjust their production accordingly.

"He explained that this approach allows us to create only a small number of each piece of clothing. As a result, we minimize waste and significantly reduce excess stock." Typically, the firm maintains a stock range of 100 to 200 units per product, marking a noticeable departure from the standard practices of mainstream fast-fashion companies. These traditional brands often manufacture thousands of units per design every season, attempting to forecast fashion trends well ahead of time. The term 'on-demand' is how Shein describes its strategy, whereas a technology expert discussing the topic with Vox in 2021 referred to it as 'real-time' retail.

During the meeting, Pernot-Day mentioned that the technology enables the firm to identify and respond to "micro trends" favored by consumers. "We have the ability to recognize these trends and respond in a manner that we believe is quite pioneering," he stated. A designer, who recently initiated a class action lawsuit in a New York District Court, claims that the company's artificial intelligence tools for analyzing the market are involved in a "large-scale, systematic plan of digital copyright infringement targeting the creations of independent designers and artists." According to the lawsuit, this involves collecting designs from the internet and directly forwarding them to manufacturing facilities for production.

In a written communication sent to Grist, a representative from Shein echoed Peter Pernot-Day's claim that through technological advancements, the company is able to minimize waste and enhance productivity. The spokesperson also implied that the reason for the company's higher emissions in 2023 was due to a significant increase in business operations. "We do not believe that expansion conflicts with our sustainability goals," the representative stated.

An examination of Shein's environmental sustainability report by the Business of Fashion, an industry journal, revealed that the company's carbon footprint increased nearly twice as fast as its income last year. This surge placed Shein at the top of the list for carbon emissions in the fashion sector. In contrast, the increase in Zara's carbon emissions was only half that of its sales growth. Meanwhile, other major players in the field, like H&M and Nike, experienced a boost in sales accompanied by a reduction in carbon emissions compared to the previous year.

The carbon footprint of Shein is notably large due to its frequent use of air freight, explained Sheng Lu, who teaches fashion and apparel studies at the University of Delaware. "AI is extensively utilized in the fashion sector. It's not that AI itself is harmful," Lu stated. "The issue lies within the core business approach adopted by Shein."

Numerous leading companies transport products internationally in large quantities, opting for maritime freight due to its cost-effectiveness. They maintain suppliers and storage facilities across various nations, reducing the journey length for goods to reach customers.

The sustainability report released by Shein reveals that 38 percent of its environmental impact is attributable to the logistics of moving goods between its locations and delivering them to buyers, while 61 percent is linked to various segments of its supply chain. Despite being headquartered in Singapore and sourcing from a few countries, the bulk of its clothing production takes place in China, from where items are dispatched directly to consumers in packages addressed to them individually. In July, the firm dispatched approximately 900,000 packages daily to customers in the United States.

A collective of protesters rallied on Black Friday in Barcelona, Spain, in November 2023.

A representative from Shein informed Grist that the company is in the process of creating a plan to reduce carbon emissions throughout its supply chain. The brand has also boosted its stock levels in American warehouses recently to provide faster shipping options to its customers in the United States and has expanded its reliance on cargo ships over cargo planes, as the former are more environmentally friendly.

"Managing carbon output in the fashion sector is quite a complicated task," Lu mentioned, noting that numerous labels employ artificial intelligence to enhance their operational efficiency. "The effectiveness of AI greatly hinges on its application."

Studies have shown that the adoption of specific artificial intelligence (AI) tools can enhance the sustainability efforts of businesses. Shahriar Akter, who holds a leadership role in the business and law faculty at the University of Wollongong in Australia, believes AI is the crucial component that has been missing. In May, a research paper co-authored by Akter revealed that fast-fashion vendors utilizing AI for data management to align with the sustainability objectives of major brands not only boosted their profits but also reduced their carbon footprint. Akter highlights the significant role of AI in meticulously tracking environmental factors like pollution and emissions, capabilities that were not possible before the advent of AI-driven solutions.

Shein informed Grist that it does not employ AI-based data management systems for monitoring its emissions, a component of AI application highlighted in Akter’s research. However, the brand's highly publicized implementation of machine-learning algorithms for forecasting demand and minimizing waste represents another aspect of AI utilization discussed in the study.

Nonetheless, the firm still has considerable ground to cover in achieving its objectives. According to Grist's calculations, the carbon emissions Shein claimed to have reduced in 2023 through initiatives like supplying its vendors with solar panels and choosing sea freight, represented just around 3 percent of its annual total carbon footprint.

Lenier, representing Sustainable and Just Future, is of the opinion that the fast-fashion sector cannot employ artificial intelligence ethically. She pointed out that this largely unchecked technology enables companies to amplify their negative effects on both laborers and nature. "The individuals employed in these fast-fashion production facilities are now facing tremendous pressure to produce more at an even quicker pace," she stated.

Lenier and Lu are of the opinion that the secret to creating a greener fashion sector lies in persuading consumers to reduce their purchases. Lu pointed out that if businesses employ artificial intelligence to increase their revenue but do not alter their environmentally damaging habits, their carbon emissions will rise in tandem. "It boils down to the ability to present items that are more in demand in the market, leading to increased buying behavior compared to before," he mentioned. "Naturally, this will result in a greater carbon footprint."

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