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SHEIN pledges €250 million in UK and EU for circularity fund amidst fast fashion crack down

SHEIN pledges €250 million in UK and EU for circularity fund amidst fast fashion crack down

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SHEIN has committed to investing €250 million into the UK and EU over the next five years. €200 million will go to the creation of a circularity fund, through operational and commercial investments aimed at supporting the local entrepreneurial ecosystem in the UK and Europe.

The circularity fund aims to advance R&D for the fashion industry, by investing in early-stage start-ups working on textile-to-textile recycled materials innovation and related areas. It will also enter into offtake agreements or other commercial partnerships with more mature start-ups with existing production capacity.

Don't miss: SHEIN reportedly investigated for data handling practices in China

SHEIN will be the cornerstone investor of the circularity fund and is inviting businesses, financial institutions and sovereign wealth funds globally to co-invest in the fund.

“The circularity fund will focus on supporting entrepreneurship and innovation in the UK and the EU. In addition to funding early-stage startups exploring new technologies, we also intend to invest in more mature start-ups in this space that have commercialised their innovations and are ready to scale up,” said Donald Tang, SHEIN’s executive chairman in a statement.

This comes as EU governments clamp down on fast fashion by giving governments jurisdiction to levy charges on firms whose marketing strategies reflect wasteful trends, according to Euro News.

The European Commission has reportedly requested that SHEIN and its Chinese counterpart Temu provide more information regarding its compliance with the EU’s Digital Services Act (DSA). The act requires the global fashion retailer to adopt specific measures to protect users’ wellbeing and monitor illegal activity, according to Euro News.

The European commission has reportedly proposed import duty towards China’s Temu and Shein. According to Financial Times, these measures are part of a continued effort to stem the surge of cheap and potentially dangerous products imported into the region.

Meanwhile, SHEIN says its circularity funds will guide its sustainability efforts, such as through sourcing rescued materials or partnerships to produce recycled polyester materials.

The remaining €50 million of the €250 million commitment is earmarked for initiatives to support brands, designers, and artisans across the UK and the EU to grow online businesses with SHEIN’s marketplace services.

Photo courtesy of publiceye.ch

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