Britain to Investigate ASOS, Boohoo and Asda's Environmental Claims

A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration
A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration
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Britain to Investigate ASOS, Boohoo and Asda's Environmental Claims

A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration
A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. REUTERS/Dado Ruvic/Illustration

Britain's competition regulator will investigate whether fashion brands ASOS, Boohoo and George at Asda are misleading shoppers with their environmental claims as it scrutinizes retailers for evidence of "greenwashing".

The investigation comes as regulators heighten scrutiny of companies which may be exaggerating their green credentials in an attempt to woo climate-conscious consumers as well as billions of dollars from environmentally-focused investor funds, Reuters said.

"People who want to 'buy green' should be able to do so confident that they aren't being misled," Competition and Markets Authority (CMA) interim Chief Executive Sarah Cardell said in a statement.

"Eco-friendly and sustainable products can play a role in tackling climate change, but only if they are genuine."

If the three companies are found to be misleading customers, the CMA will take enforcement action, including in court, if necessary, Cardell said, noting the probe was "just the start" of the CMA's work in the clothing sector.

The agency has outlined its concerns to the three companies and will begin gathering evidence, which will help it to decide whether there have been breaches of consumer protection laws.

It will examine whether the language used in marketing clothing, footwear or accessories is too vague and whether the criteria used by the companies to label products as sustainable might be lower than customers might reasonably expect.

Online fashion retailers ASOS and Boohoo said in separate statements they would work with the CMA and were committed to providing accurate information about their products.

Representatives for supermarket group Asda, which owns the clothing line George, did not immediately respond to requests for comment.

INVESTIGATING GREEN CLAIMS
The CMA's concerns come as the global fashion industry comes under increasing pressure to clean up its act.

The United Nations says the industry is the second biggest consumer of water globally, behind agriculture, and according to estimates, is responsible for up to 8% of carbon emissions.

Many regulators across the United States and Europe are cracking down on potentially false environmental, social and governance-related (ESG) claims made by companies across sectors as well as investor funds to make sure they are backed up.

The CMA last year published a green claims code, a set of guidelines for companies and shoppers to ensure that environmental claims are genuine and not misleading.

It will examine products in the fashion brands' eco ranges, where some labeled as environmentally friendly can contain as little as 20% recycled fabric, the CMA said.



Sources: Shein Aims for London IPO by Mid-year

FILE PHOTO: A company logo for fashion brand Shein is seen on a pile of gift bags on its Christmas bus as part of a nationwide promotional tour in Liverpool, Britain, December 14, 2024. REUTERS/Phil Noble/File Photo
FILE PHOTO: A company logo for fashion brand Shein is seen on a pile of gift bags on its Christmas bus as part of a nationwide promotional tour in Liverpool, Britain, December 14, 2024. REUTERS/Phil Noble/File Photo
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Sources: Shein Aims for London IPO by Mid-year

FILE PHOTO: A company logo for fashion brand Shein is seen on a pile of gift bags on its Christmas bus as part of a nationwide promotional tour in Liverpool, Britain, December 14, 2024. REUTERS/Phil Noble/File Photo
FILE PHOTO: A company logo for fashion brand Shein is seen on a pile of gift bags on its Christmas bus as part of a nationwide promotional tour in Liverpool, Britain, December 14, 2024. REUTERS/Phil Noble/File Photo

Online fast-fashion retailer Shein is aiming to list in London in the first half of the year, according to two sources with direct knowledge of the matter, assuming it gains regulatory approvals for the initial public offering.
The IPO could be completed as early as Easter, which is April 20, one of the people said.
A visit to China by Britain's finance minister Rachel Reeves starting on Saturday, during which she will meet with vice premier He Lifeng to discuss economic and financial cooperation, could help progress the regulatory approvals Shein needs, the source added.
A second person with knowledge of the matter said Shein, founded in China in 2012, is working towards listing in the first half of this year, but the definitive timeline is still in flux.
The London listing push comes after the company ended its attempt at a US IPO after pushback from lawmakers concerned about risks connected to China and alleged labor malpractices, Reuters reported.
The head of Britain's Financial Conduct Authority, which is in charge of assessing and approving flotations like Shein's IPO, is accompanying Reeves on the trip to Beijing and Shanghai and will meet with regulatory partners there.
Shein declined to comment, the FCA said it does not comment on potential listing applications, and Britain's finance ministry did not reply to Reuters' questions.
Even though it moved its headquarters from Nanjing to Singapore in 2022, Shein also requires permission from the China Securities Regulatory Commission, making it subject to offshore listing rules, as most of its 5,800 contract manufacturers are in China.
New rules passed by the CSRC in 2023 allow it to vet and potentially block offshore listings.
The CSRC did not immediately reply to questions about Britain's visit and Shein's IPO.
Shein is walking a political tightrope as it tries to show it has measures in place to limit the risk of human rights violations in its supply chain while avoiding any direct claims about China's Xinjiang province - a top cotton-producing region where the United States and NGOs have accused the government of forced labor and other abuses against Uyghur people.
Beijing denies any abuses, and Chinese authorities have hit back at clothing brands that say they don't use Xinjiang cotton.
Shein's general counsel for Europe, the Middle East and Africa, Yinan Zhu, on Tuesday declined to directly answer when asked by a British parliamentary committee whether the retailer's clothes contain cotton from China or Xinjiang, or whether it tells suppliers not to source from the province.
Zhu asked instead to provide the committee with written answers, and said Shein complies with relevant laws in all jurisdictions.