Startups are cropping up to address fashion’s social and environmental impacts, but what will it take to more widely commercialize nascent technologies?
At H&M Foundation’s Planet Positive Perspectives event in New York on Oct. 13, part of its series of events focused on speeding sustainable change, speakers shared entrepreneur, investor and manufacturer perspectives on eco innovation.
“Our industry, together with a lot of other industries, live beyond the planetary boundaries. We’re borrowing resources from future generations,” said Christiane Dolva, strategy lead for Planet Positive at H&M Foundation. “We need to aim for creating an industry together that can actually build back better, that can regenerate, replenish and reimagine how we do things in order to give back more than it takes. So that’s our Northern Star.” To make this Planet Positive vision happen, Dolva noted it will require a combination of innovation, investment and brands “willing to take the leap into the unknown.”
Karla Mora, founder and managing partner at Alante Capital, noted that there is now “money flooding in” to the sustainability space. Venture capital requires solutions that can be scalable and widely adopted, meaning they can compete with conventional technology on areas like quality, ease of use and “eventually price,” she said. They also must deliver returns in a decade-long timeframe.
“It takes an ecosystem of actors working together to bring about systemic change. And the role of early stage investors is to help unlock R&D by financing commercialization and growth,” Mora said. “We get to support the incredible entrepreneurs bringing this innovation to life.” After seeing what led brands to hesitate in adopting nascent solutions and bringing startups to market, Alante launched its Innovation Community that helps guide brands, retailers and suppliers in commercializing new technologies.
Apparel Impact Institute vice president Kurt Kipka explained how his firm helps solutions achieve scale. Aii has a network of brands and hundreds of facilities that “provides a nice starting spot for many of the interventions that are incredibly needed in this industry.”
Speaking of where she sees the greatest impact potential, Neeta Rastogi Singh, chief financial officer and chief operating officer of the Unreasonable Group said, “The companies that are focused on the supply chain from soup to nuts actually are able to really move the needle at this moment in time. There’s a lot of gaps that we’re seeing and different technologies that can fit into those gaps and make a change right now.”
As Mora pointed out, sustainability has been seeing a lot of investment activity. But Julia Viner from the Growth Equity Group in Closed Loop Partners, noted that the “fundraising environment is becoming more challenging” in the current economic climate. She is working with the companies in Closed Loop Partners’ portfolio to help them budget and prioritize spending for the next year to 18 months to ensure they have the necessary capital. The support also includes connecting them with investors within its network if they need to raise more funds.
A main focus for the group is “how can you unlock sustainable innovation, while also driving profitability, resiliency and opportunities to re-engage your consumer,” Viner said.
While the last decade has laid the groundwork for action, Cara Smyth, the founder of the Responsible Business Coalition and chair of Fashion Makes Change, who leads Accenture’s Responsible Retail data-driven ESG practice, said fashion must move into the “season of scale.”
Smyth noted that 10 years ago, she would reach out to CEOs about sustainability, and they would direct her to another area of the organization, such as the head of CSR or an executive in production. In the past, “somebody else was worried about it somewhere separate and apart from the business,” but this has changed as financial and sustainability considerations have become linked.
“Investors are now saying it is material, relevant to my investment in your business to know how does climate affect what you’re doing, and how are you affecting the climate,” Smyth said. In addition to investors, consumers, employees and regulations are putting pressure on brands in this area.
Since 2015, the H&M Foundation has hosted the Global Change Award, which gives five startups in each annual cohort a shared grant of 1 million euros ($976,000) and access to a GCA Impact Accelerator. H&M Foundation partners with Accenture, KTH Royal Institute of Technology and The Mills Fabrica on the awards and incubator. Applications for the next round will open on Oct. 20.
“At the end of the day, to have any meaningful impact, you still need to be a good business,” said Kevin Martin, chief technology officer and co-founder of Unspun. He added that stressing aspects like profitability benefits of sustainable solutions can help persuade decision makers at brands.
Elyse Tosi, senior director of accounts and client success at Eon, pointed out the importance of having a technology that is easy to implement. “You need quick and immediate wins to keep everyone on board with you,” Tosi said. “Really focusing on how to bring value from our offering to these brands, and really helping show momentum has helped bring the organizations from beginning in that POC [proof of concept]…towards more meaningful scale within their organization.”
On the manufacturer side, Isko director Özgür Atsan noted, “We know that startups need a real industry partner to scale up.” When considering who to work with, the denim producer looks at aspects like whether the innovation will facilitate its sustainable journey and the level of functionality of the solution. One of the solutions that Isko has entered a licensing agreement with is HKRITA’s Green Machine, an H&M Foundation-supported invention that separates blends of cotton and polyester fibers at commercial scale.
The event was partly focused on matchmaking between companies and startups. Six winning startups of the Global Change Award participated in a “speed pitch,” presenting their solutions to the audience.
Biorestore makes a consumer laundry product that can remove pills and fix other wear issues like fading, seeking to keep clothing out of landfills and in wardrobe rotations for longer.
Zer Collection is also focused on reducing waste. It uses 3D printing to create the exact amount of material needed for garments, eliminating the cutting step.
Wadhwani AI’s CottonAce solution helps cotton farmers quickly identify which pests they are dealing with. In the two years that CottonAce has been used at farms in India, growers have reduced their pesticide use by 25 percent while growing their incomes 20 percent.
Materials science firm Saltyco is making a down alternative called BioPuff out of plant materials grown in wetlands. As part of this agriculture effort, it is restoring these ecosystems, which contribute significantly to carbon capture and fresh water supply.
Another material firm, Rubi, creates carbon-negative fibers by capturing carbon and treating it with enzymes in a bioreactor. Among the fibers Rubi makes are typically cellulosic, or wood-based, materials like viscose.
Circular solution Re:lastane has created a closed-loop recycling process that uses an enzyme to separate blended polyester and elastane.
“They’re super engaged, super attentive, very, very unique and individual ideas but also got huge potential,” said Jennie Perzon, principal director at Accenture Sweden, about the winners. “The industry is also super engaged. So if you compare that to some years ago when we started, we didn’t have the same traction with other actors.”