Shein Hong Kong IPO amid ESG scrutiny

Shein, the Chinese online fast-fashion retailer, is preparing for its stock market debut on the China — Hong Kong Stock Exchange next month, after a five-year IPO journey that faced obstacles in New York and London due to environmental, social, and governance (ESG) concerns. The company is under active investigation by the International — European Commission and the U.S. United States — Federal Trade Commission, and has previously been fined in France and Italy for issues such as fake discounts and greenwashing. Shein has attempted to improve its ESG profile by expanding its sustainability reporting and establishing an external ESG advisory board, but investors remain concerned about labor conditions, supply chain traceability, and governance. The company's dual-class share structure will give its four co-founders 90% of voting rights while holding only 59.6% of shares, raising concerns about minority shareholder influence. Additionally, Shein's greenhouse gas emissions are roughly double those of Inditex, the owner of Inditex — Zara, despite lower sales. These factors could weigh on the company's valuation and long-term sustainability.