Italy's competition regulator is investigating online fast fashion giant Shein over potentially misleading claims about its sustainability practices.

Italy's independent competition agency has announced that the greenwashing investigation will focus on Infinite Styles Serves Co. Limited, a Dublin-based company that operates under the name Shein and operates the online retailer's website and app.

Shein was founded in China but is now headquartered in Singapore. The company has seen a meteoric rise in the world of retail, driven by a business model that allows it to quickly produce clothing based on immediate demand and ship it directly to customers from factories, mostly located in China.

This has allowed the company to offer products at extremely low prices and attract customers who can buy €10 sweaters, €2 phone cases and other products from a constantly updated range of items on its website.

However, critics of Shein have long argued that the company's practices encourage excessive consumption and waste, problems the company has said it is working to address.

Is Shein misleading consumers with its environmental claims?

Italian officials accuse the company of misleading consumers with claims about the environmental sustainability of the clothing it sells . Environmental organizations report that such deceptive practices, known as greenwashing, are occurring throughout the corporate world.

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Italy's competition regulator, known by its acronym AGCM, claims that some environmental references on Sheina's Italian website are misleading or leave out important information.

Images promoting Shein's wardrobe as sustainable were also marketed "through generic, vague, confusing and/or misleading environmental claims," the regulator said in a statement.

In particular, the regulator cited information from Shein's 'evoluShein' collection, which it claims may have misled consumers into believing that clothing they bought from that collection could be recycled.

Shein's emissions have risen despite decarbonisation targets

The AGCM also stated that the stated decarbonisation commitments found on Shein's website are in "flagrant contradiction" with the increase in greenhouse gas emissions as outlined in Shein's 2022 and 2023 sustainability reports.

The online retailer said it would cooperate with Italian authorities during the investigation.

"We would like to take this opportunity to reaffirm our commitment to complying with the laws and regulations in the markets in which we operate, as well as to maintain transparency with our customers," Shein said in a statement.

Shein is also facing challenges elsewhere in Europe. Critics and rights groups such as Amnesty International UK oppose a possible listing of the company on the London Stock Exchange due to concerns about working conditions and environmental protection.