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GMS 802 Assignment 2

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GMS 802 Assignment 2

Uploaded by

jadavradhika2812
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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GMS 802/ Assignment 2

Based on “Shein: Ultra Fast Fashion’s ESG Challenges (the case is available in the Library E-Reserve) – Total
Marks 7.5 – Use the space below the questions to answer.

Question 1: Describe the collective efforts made by the fast fashion industry to tackle ESG challenges (1.5
marks)
The fast fashion business has addressed Environmental, Social, and Governance (ESG) issues in a number of
coordinated ways. Important projects consist of:
Sustainable Materials: A lot of companies are starting to use materials that are less harmful to the environment,
such as recycled polyester, organic cotton, and alternative textiles.
Circular Fashion Models: To reduce waste, businesses are implementing circular business models that prioritise
recycling and reusing clothing. Some manufacturers, for example, have implemented initiatives to encourage
customers to return worn clothing for recycling or resale.
Supply Chain Transparency: To track the sources of clothing and guarantee ethical standards all the way through
the supply chain, increased transparency programs have been introduced. More and more brands are becoming
public with the locations of their factories and the audit findings.
Energy Efficiency: To lessen carbon footprints, the sector is investing in renewable energy sources and
technology. This involves implementing energy-efficient procedures and employing solar electricity in
manufacturing plants.
Water Management: Given the high-water consumption involved with fabric dyeing and treatment, efforts are
being made to minimise water usage and enhance wastewater management in the garment production process.
Worker Rights and Safety: Improving working conditions and safety standards in industries has received more
attention in the wake of tragedies like the collapse of the Rana Plaza. The scrutiny of collective bargaining
agreements and labour law compliance is growing.

In an effort to lessen the fast fashion industry's historically detrimental effects on the environment, these
initiatives represent a change in the industry towards more ethical manufacturing and consumption practices.
Question 2: Examine the ESG challenges within the fast fashion industry by looking into the ESG aspects
separately. Beyond the general industry concerns, what were the specific ESG challenges faced by Shein (3
marks)
Overarching ESG Issues in the Fast Fashion Sector:

Environmental: The business is infamous for high levels of waste generation, pollution from textile plants, and
large carbon emissions.
Social: Labor exploitation, including bad working conditions and unequal salaries in the supply chain, remains a
key concern.
Corporate governance continues to provide difficulties, such as the absence of accountability and openness in
company activities.

ESG Issues Shein Faced:

Environmental: Because of the vast quantity of goods, it produces and the easily disposed of nature of its
clothing, Shein has come under fire for its part in the generation of textile waste.
Social: There have been reports of subpar working conditions and poor pay at Shein's production centres, as well
as other labour violations in the company's supply chain.
Governance: Shein is under fire for its lack of openness about its relationships with suppliers and the
sustainability of its business practices. Concerns have also been expressed regarding the company's capacity to
successfully manage governance and keep up with regulatory obligations across numerous regions due to its fast
development.

Question 3: Given Shein’s ESG challenges, propose three strategies for how Shein can further prepare for a
potential IPO. (3 marks)
Improve Transparency and Reporting: Shein has to make a commitment to operating more transparently,
especially when it comes to supply chain management. Investor trust may be increased by creating and
disseminating thorough sustainability reports on a regular basis that adhere to international standards.
Establish Comprehensive ESG Frameworks: It is imperative to establish robust ESG frameworks that are in line
with international best practices. This involves setting quantifiable objectives for decreasing environmental
impact, improving labor standards, and upgrading governance systems.
To tackle societal issues, Shein could impose more stringent supervision on its supply chain. This might involve
conducting frequent audits, partnering with other entities to guarantee adherence to labour regulations, and
allocating funds for worker welfare initiatives.

Shein might potentially achieve a successful initial public offering (IPO) by implementing these tactics to solve
its current ESG difficulties and establish itself as a more ethical and sustainable option for investors.

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