The ultra-fast fashion juggernaut consolidated its formerly forked charitable efforts into the Shein Foundation, punctuated by a 5-million-euro ($5.3 million) commitment toward waste monetization development in the Global South.
The ESG merger comes on the heels of Shein’s contentious behavior in London last week. Temu rival’s general counsel Yinan Zhu dodged discussing the criminally accused company’s supply chain and potential public float, effectively enraging UK legislators.
“Empowering and giving back to the communities we reach has always been core to our operating philosophy,” David Tang, Shein’s executive chairman, said in a statement. “Establishing the Shein Foundation—and thereby consolidating our charitable efforts under a formal philanthropic structure—brings greater accountability and transparency to our donations.”
The charity conglomerate’s incumbent beneficiary is the ACT Foundation, the charitable arm of Africa Collect Textiles (ACT), a social enterprise that developed a used textiles collection and recycling pilot program in Kenya.
“This project will contribute immensely to our mission to reduce textile waste and close the loop on a more circular fashion ecosystem,” Elmar Stroomer, co-founder of ACT and director of the ACT Foundation, said. “Through this project, we are not only protecting our planet but also creating jobs that will transform lives and provide opportunities to those in need. This journey will inspire hope for a more sustainable and equitable future for all.”
Structured into brackets, the foundation covers ESG’s Big Three—people, planet, profit—as the TikTok beloved’s work will aim to “build more inclusive communities and sustainable ecosystems.”
That said, the first focus is on social reform. “Improving Lives in Communities” considers the systemic challenges that underprivileged individuals, particularly women and children, experience to enhance inclusivity. This mission is in line with the $430,000 donation made to several Dress for Success (DFS) affiliates last March as part of Shein’s “longstanding collaboration” with DFS Greater London.
Land stewardship efforts will address “the challenges of biodiversity and habitat loss arising from climate change,” the Forever 21 stakeholder said. Shein plans to do so by “protecting, restoring and promoting the sustainable use of terrestrial and marine ecosystems.”
The London IPO hopeful also pledged to invest in the research required to support developing and implementing innovative and ESG-centric strategies to “catalyze scalable solutions that aim to accelerate the transition to a more circular and sustainable fashion industry.”
This is where ACT comes into play. The Nairobi-based collector monetizes textile waste, founded in 2014, per Pitchbook, as an “operator of a textile recycling company intended to build circular ecosystems for fashion in Kenya and Nigeria.”
Essentially, the for-profit enterprise aggregates used textiles and footwear and finds their next best revenue streams. The qualifying discarded goods sourced from its collection sites are donated to ACT’s non-profit affiliate, Matthew 25 Children Home. What isn’t needed by the shelter (think stilettos and shapewear) is instead “redistributed through resellers within vulnerable communities,” the E4Impact accelerated startup said. Those earnings are then fed back into the orphanage.
Tangentially, ACT seemingly unveiled the ACT Foundation three days before Shein’s statement hit the wires.
Shein’s funding, too, will be funneled to local companies that “promote the advancement” of post-consumer textile waste management. This includes installing a network of drop-off points (like collection bins) for the public as well as building an infrastructure equipped to recycle more textile waste more efficiently for the industry. In turn, underserved communities will, theoretically, flourish from job creation and outreach efforts.
Those previous commitments include the quasi-controversial, mid-2022 collaboration with The Or Foundation. During the 2022 Global Fashion Summit, Shein promised to pump $15 million into the “Too Much Clothing, Not Enough Justice” non-profit via Shein’s then-new EPR-adjacent grant. The resulting “EPR Fund” dedicated $50 million (before 2027) to circular ecosystem developers, particularly those in the Global South, combatting textile waste.
The UnTours Foundation—inheritor of the very first B Corp—received the second iteration of this grant last May. Shein gave the low-interest loaner $250,000, which UnTours was to give KaTik, a Cambodian initiative “that partners with social enterprises to upcycle textile waste.”
Rachel Faller defined KaTik as a group of people passionate about advancing Cambodia’s circular economy, as written on the group’s website. Faller founded a zero-waste fashion label in 2008 called KeoK’jay, which she rebranded to Tonlé in 2013. Shortly after celebrating its decennial, Tonlé shuttered operations last January. Four months prior, Shein contracted Faller for circularity consulting.
“The UnTours Foundation is a non-profit organization that provides low-interest loans or equity to world enhancing businesses that address social, economic, and environmental issues,” Shein said at the time. “As an EPR Fund grantee, the foundation has received $250,000 which will be allocated to an initiative in Cambodia to drive textile waste circularity by supporting local artisans in the rescue and upcycling of textile waste.”
The e-tail leviathan’s other philanthropic commitment—the CSR-focused Shein Cares Fund—functioned similarly. Vital Voices, a women’s rights group in the capital, was named inaugural recipient of the $500,000, two-year partnership, in late 2021.
In forming this novel, non-profit organization to function as the group’s (now holistic) charitable arm, Shein will “consolidate its previous philanthropic efforts under the foundation, where appropriate, as aligned with the foundation’s mission.”
What that means for the previous recipients—the dichotomously designated grantees—is not currently clear as Shein did not respond to Sourcing Journal’s request.
