The Organization for Economic Cooperation and Development (OECD)’s National Contact Point (NCP) in France said this week that fast-fashion giant Shein has failed to follow the guidelines it puts forth related to human rights and the environment.
In 2023, two French members of Parliament (MPs) complained about the company, alleging that its policies and practices are at odds with the OECD’s guidelines and stating that its business model harms consumer interests because it offers shoppers low-cost products while concealing the manufacturing and composition of the items they purchase.
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That complaint saw the NCP launching an investigation into Shein; the MPs that lodged the complaint met with Shein and the French NCP in February for mediation. Despite that meeting, the NCP determined it would move forward with a final statement and recommendation on Shein’s practices.
The body said it found various ways Shein fails to comply with the OECD guidelines, and it has recommended that Shein work to develop stronger internal policies to align. Specifically, the organization said Shein should strengthen its efforts on respecting French and European laws; conducting due diligence on its products and services; building out supply chain mapping capabilities; ensuring respect for working conditions and workers’ rights; working to respect the environment; disclosing more information about its finances and more.
Dominique Potier, one of two French MPs who put forth the complaint against Shein, said the findings are robust.
“This is the most comprehensive investigation into the ultra fast fashion phenomenon conducted by a public institution,” he said in a statement.
Local laws and supplier audits
The OECD has called on Shein to publish further public information about its compliance with France’s anti-waste law (AGEC), which aims to move businesses toward greater circularity. It also highlighted European Union-specific legislation that Shein is or could be subjected to in the future, like the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), the Digital Services Act (DSA) and other regulations.
The NCP said that while Shein’s policy is to rely on suppliers’ codes of conduct, which are, by and large, based on domestic regulations, China, where Shein produces the majority of its goods, does not offer labor law that is as protective as the OECD’s guidelines on labor and human rights.
“The need to comply with Chinese law cannot exempt Shein from the need to respect the standards of responsible business conduct and fundamental rights laid down in international standards,” the NCP noted in its translated final report.
What’s more, the NCP said, Shein does not publish its audit framework, which it said is concerning because it means that the public cannot readily understand the standards suppliers are held to. According to the organization, Shein does not “provide clear incentives for suppliers to go beyond the requirements of domestic law.
“This situation effectively exempts suppliers from respecting fundamental rights at work and creates a risk of exposure of all actors in the Shein supply chain to breaches of the OECD guidelines, in particular in the areas of human rights and working conditions,” the NCP said in its report, noting that, in particular, it had concerns over workers’ freedom of association and ability to engage in collective bargaining.
Financial and governance information
The audits aren’t the only information the NCP felt Shein failed to share appropriately. According to the OECD, companies should set forth information about their finances, structure, operations, business objectives and more.
Per the NCP, Shein was relatively secretive about its finances and organization structure throughout the investigation.
“When questioned by the NCP…Shein explicitly refused to provide financial and governance information, citing its status as a ‘non-listed private entity,’” the report said. “The NCP notes an opacity on the financial results of the company, its structure and its mode of governance. Thus, the information made available by the group does not correspond to the expectations of the OECD Guidelines.”
Though the NCP found flaws with Shein’s financial and governance disclosures, it said the non-financial disclosures from the company were more robust. Between 2023 and September 2025, Shein has added information around its social impact, its sustainability initiatives and its supply chain management to its site for public perusal, which the NCP said “illustrates a willingness to move towards greater transparency as recommended by the guidelines.” It welcomed the step forward, but said that it still lacks enough responsible business conduct and due diligence information to be considered compliant with OECD guidelines.
Labor
In a section of the report focused on workers’ rights and safety, the NCP reiterates its gripes about lack of supplier audit documentation and adherence to local law rather than international standards.
The body ultimately concluded that while Shein’s supplier code of conduct does address considerations like child labor, working time and rest, wages and more, the allowance of off-site audits for some new suppliers, the opacity of the documentation on audits and solutions and the difficulty of regulatory bodies in determining the company’s impact on labor forces render it noncompliant with the OECD’s guidelines.
“As it stands, the standards set out in the Shein documentation have ambiguous formulations that severely limit their effectiveness and operability against the standards set out in the OECD guidelines,” the NCP wrote, later noting that “Risks of adverse impacts on human rights and working conditions are not clearly identified, so that Shein’s responsible sourcing policy is not tailored to the risks, their prevention, mitigation and remediation, but remains mainly focused on the business expectations of the Shein business models’ on-demand fashion.”
Environment
The NCP noted that Shein has published some information about its environmental strategy, that it has validated emissions reductions goals with the Science-Based Targets Initiative (SBTi) and that it has vowed to incorporate more recycled materials into its supply chain, among other goals.
Still, it found that Shein hasn’t gone far enough in looking at a holistic picture of how its business impacts the environment.
“As it stands, Shein’s approach is mainly based on an overall quantification of greenhouse gas emissions, without a detailed risk mapping. The NCP also notes the very low mention of international environmental standards in Shein’s documentation. The policy framework presented on its website therefore does not seem to be adapted to the real risks,” the NCP wrote.
The body also noted that Shein’s greenhouse emissions nearly doubled between 2022 and 2023, which it counts contradictory to the efforts the company said it is making around decarbonization.
As a whole, the NCP said Shein’s environmental strategy doesn’t align with the OECD guidelines. It said the “lack of detailed environmental risk mapping,” the “lack of measurable targets aligned with specific climate requirements” and doubts it harbors about the effectiveness of programs Shein does have in place make it noncompliant.
Recommendations and the future
The outlined areas are far from the only issues the French NCP found with Shein’s business model, the report shows. It also highlighted further concerns about supply chain transparency, consumer protection, data privacy and other considerations.
As a result of the non-compliance, the body made a slew of specific recommendations, some of which have the potential to change the way Shein does business. On the labor front, it urged the fast-fashion giant to adopt due diligence standards and lessons from Rana Plaza and flagged the need for enforceable policies on labor issues like forced labor and excessive hours. It also pressed Shein to create a more robust way to map its supply chain, rather than relying on simple reports and encouraged it to publish more transparent reporting around its environmental footprint, among other recommendations.
While Shein did not immediately return Sourcing Journal’s request for comment on the NCP’s findings and recommendations, the NCP noted in its report that the company “disputes” some of the analysis provided about its business dealings. According to JustStyle, Shein called some of the NCP’s claims “premature and misleading” and said it worked “constructively” with the body.
The report comes as Shein announced it plans to open permanent stores in France.
The NCP plans to follow up on its recommendations to Shein over the next six to 12 months.
