As Shein seemingly gets closer to a blockbuster London listing that would end the City’s IPO drought, critics have understandably raised concerns, especially around its labour practices.
Alicia Kearns of the Commons foreign affairs committee said “there are grave concerns about” the fashion giant’s factory working conditions and in 2022 Shein admitted workers in two factories were working excessive hours. The environmental impact of its clothes has come under fire as well.
In a blog post, tax campaigner Richard Murphy asked, “Has the London Stock Exchange heard of business ethics?” Well has Richard Murphy heard of the London Stock Exchange? Take a look at the FTSE 100. Shein’s practices might be worse than most of its peers in the fashion sector, but this is the big leagues of evil companies — i.e. a major global stock index.
Mining, oil, big banks and tobacco make up a hefty chunk of London’s top flight. A big City bank was alleged to have laundered $100 billion for terrorist groups just this week (it denies the claims). If Shein lists in London, does it make the top five most harmful companies here?
It was all about geopolitical tensions with China. It would not be wise to turn a blind eye to the serious questions asked about Shein’s work practices.
And anyone thinking of buying the shares should be concerned about the claim it relies on tax loopholes to undercut rivals on price. But maybe we should ask more questions of some long-time London-listed firms’ business practices.
The post-Brexit London Stock Exchange has struggled to properly articulate what it offers over New York. In theory, maybe stability given the large amount of older companies that make reliable profits.
But serious questions about a company’s ethics can’t be good for stability. What if London became the major global stock exchange that held all its firms to scrutiny Shein will face? A couple more big-hitters would immediately threaten to go to New York, but a bit further down the line we might get a stronger stock market out of it.
