We set science-based targets to fight climate change – both within our operations and in collaboration with our suppliers and partners.
Our Emissions Reduction Roadmap & Initiatives
SHEIN is committed to reducing absolute greenhouse gas (GHG) emissions across our entire value chain by 25% by 2030, and will commit to reach net-zero emissions by no later than 2050.
SHEIN 2023 GHG Emissions
Our absolute emissions grew from 9.17 million metric tons of CO2e in 2022 to 16.68 million metric tons of CO2e. In 2023, our business continued to experience strong growth, and our operations diversified with the introduction of SHEIN Marketplace. We recognize that we still have much more work to do on our climate mitigation journey and are committed to driving progress, aligned to the company’s growth and expansion.
SHEIN is working to mitigate climate change both within our operations and in collaboration with our suppliers.
Scope 1 and 2 emissions: They account for only a small proportion of total emissions and are mainly linked to electricity usage. We are implementing programs to better manage and reduce the electricity we use in our offices and warehouses, as well as expand our use of renewable energy. In 2023, 72% of electricity across the operations that we directly manage globally was from renewable sources, up from 68% in 2022. We’re on track to achieving our target of having 100% of the electricity used in operations directly managed by SHEIN from renewable sources by 2030.
Scope 3 emissions: We acknowledge that most of our emissions lie in scope 3, and significant work remains to be done. We will collaborate with our suppliers and other value chain partners to reduce emissions. In 2023, we launched several programs to support our suppliers in their decarbonization journeys. For example, in partnership with the Apparel Impact Institute (Aii), we implemented Clean by Design (CbD) projects across 28 supplier sites, resulting in nearly 46,000 metric tons of emissions reduction per year. We also promote the adoption of rooftop solar energy in our supply chain, supporting our suppliers with customised solarisation plans that are complemented by cash incentives to encourage adoption. As of end 2023, 31 suppliers have installed and 10 suppliers are in the process of installing photovoltaic solar panels for their factories, reducing 12,140 metric tons of reduction. As part of our localization strategy, we are building partnerships with suppliers in Brazil and Türkiye to bring production closer to key consumer regions and expanding the number of warehousing facilities globally. In 2023, nearshoring inventory led to a reduction of 49,578 metric tons of CO2e, and localizing procurement resulted in an emissions reduction of 314,805 metric tons of CO2e from the reduction of air transportation distance. We have also started working with logistics partners that use electric cars and hybrid or natural gas vans for our transportation operations, resulting in savings of 54,614 metric tons of CO2e.
We continue to take steps to demonstrate greater accountability in our decarbonization journey. In 2022, we completed a study of our 2021 emissions and announced our ambition to reduce GHG emissions across our value chain by 25% by 2030, with reference to a baseline year of 2023. This is in line with SBTI’s guidance to choose the most recent year for which data is available, and which is representative of our business activity.
In 2023, we committed to setting near-term targets with the Science Based Targets initiative (SBTi). We will submit our targets for SBTi’s validation in 2024 and are partnering closely with well-known consultants in the industry, including Anthesis, to ensure that we have a detailed and practical roadmap towards decarbonizing our value chain. We are also reviewing the scope of our climate ambitions and will commit to reach net-zero emissions by no later than 2050, in line with the SBTi Net-Zero Standard.
RisilienceTM Climate risk study
In 2022, to better understand our climate risks in the transition to a low-carbon future, we partnered with Risilience™, a SaaS platform provider that works closely with its academic partner, the Centre for Risk Studies at the University of Cambridge Judge Business School, to tackle complex issues of management science and business risk. Risilience™ uses a rigorous, scenario-based framework that integrates a wide range of risk classes with the latest international standards in climate science to provide a comprehensive view of a corporation’s balance sheet risk relative to climate change.
We studied two types of risks:
- The physical risks related to the change in weather patterns that could impact SHEIN’s operation and supply chain. The risks arising from the effects of climate change on soil and water accessibility and extreme weather events could cause disruption in raw material supply and market demand as well as operational downtime in key facilities with possible damage to physical assets.
- The transition risks range from increased pressure on companies to secure their reputation and license to play to changes in consumer preferences leading to more sustainable purchasing options. Policy and regulation constraints will tighten with the rising price of carbon.
We modeled several climate mitigation strategies to explore the differential effects they would have on our CO2e footprint and our business risk to help us prioritize our key GHG impact areas. The key initiatives we explored were use of sustainable aviation fuels (SAFs), nearshoring of production to cut down on transportation and air freight and switching to preferred materials for products and packaging.