Business / Business of Luxury

Luxury Fashion Delves Into the World of Sustainable Tech Start-Ups

As luxury fashion faces the growing pressure of reducing the industry’s environmental impacts, sustainable tech start-ups are seeing a rise in interest from fashion conglomerates and brands alike.

Aug 16, 2022 | By Aurelli Lazuardi
Stella MCCartney Fall Winter 2019 Sustainability Campaign
Image: Stella McCartney

Luxury is not traditionally associated with sustainability; so much so that the two concepts are perceived as oxymoronic. A decade ago, luxury and sustainability appeared to be conflicting topics due to their opposite nature. While luxury is related to an excessive, exclusive, and prestigious lifestyle; sustainability is connected to a frugal lifestyle aimed at reducing, protecting, and respecting the planet’s finite resources. Therefore, sustainability issues were — more often than not — overlooked in the luxury industry. What we don’t realise is that sustainability is embedded into luxury’s DNA. Rarity in the luxury market is linked to the use of rare resources such as skins, leathers, and pearls that depend on environmental sustainability in terms of the preservation of natural resources. On this basis, luxury depends on sustainability, and at the same time, sustainability finds in luxury a potential ally.

The Venture Into Sustainability Start-Ups

Stella McCartney Sustainable Fashion
Image: Stella McCartney

“It’s all about sustainable solutions,” said designer Stella McCartney in a video posted on her Instagram last weekend. The brand’s goal is to “swap out the conventional, bigger industries with these new, problem-solving sustainable companies.” After a US$200 million venture capital fund focused on climate solutions, it seems as if fashion companies and executives alike still see opportunity in start-ups pursuing sustainable solutions. The designer is currently working with investment firm Collaborative Fund to back early-stage start-ups reimagining materials, ingredients, energy and supply chain; working alongside leather-alternative producers Bolt Threads and kelp-yarn manufacturer AlgiKnit.

Evolved By Nature Chanel
Image: Evolved by Nature

She’s not the only one to seize the opportunity. Even in the midst of a grim economic landscape, companies such as Chanel and Adidas have all taken a step to enter the sustainable tech space. In June of 2019, Chanel took a minority stake in a green chemistry firm that’s exploring ways silk could replace chemicals used in clothing manufacturing. Bolton-based Evolved by Nature has developed a natural, silk-based alternative to the harsh and toxic chemicals currently used to create many high-performing textiles. The company’s technology allows it to manipulate liquefied silk protein to achieve similar effects. Its patented activated silk can reduce the pilling in cashmere, or enhance the performance characteristics of nylon and polyester.

VitroLabs Lab Grown Leather Sustainable Materials
Image: VitroLabs

French luxury giant Kering followed suit, investing US$46 million in San Francisco-based lab-grown leather startup VitroLabs. Kering’s investment in VitroLabs is the latest in a series of recent bets by the group focused on furthering its sustainability goals. “A partner like this is a stamp of approval, and we’re seeing more and more brands starting to look for solutions when it comes to leather and other alternatives to materials,” said VitroLabs co-founder and chief executive Ingvar Helgason. While many companies have focused on plant-based leather alternatives made from mushrooms or grapes, VitroLabs uses stem cells to grow leather that’s indistinguishable from the real thing without needing to raise and slaughter animals. That means the material is able to plug into existing supply chains of fashion brands and artisans while cutting out the heavy environmental impact and animal welfare issues associated with cattle farming.

In August of 2022, Ralph Lauren took a minority stake in Natural Fiber Welding, a material science start-up focused on improving the quality of recycled cotton. Similarly, Adidas secured exclusive access to Mylo, a mushroom-based leather alternative developed by biomaterials maker BoltThreads.

The Future of Sustainability in Luxury Fashion

Mylo Mushroom Vegan Leather BioBased Sustainable Tech Startup
Image: Mylo

For many brands, the current trend marks a shift from years of pilot programmes that, while highly marketable, didn’t require substantial financial outlays and didn’t really move the needle. But there are still significant barriers to transforming the industry.

The amount of capital flowing into sustainable fashion start-ups is still small compared to the size of the challenge. When it comes to sustainability investments, the funding rounds that luxury fashion brands participate in rarely top US$10 millionaccording to publicly available information on investment tracker Crunchbase. But transforming the industry in line with ambitious climate goals will require investments of between US$20 billion to US$30 billion annually, according to January 2020 report by Boston Consulting Group. The good news is that there is significant interest from venture capital funds, impact investors and most importantly, large fashion brands. There are growing tailwinds encouraging more interest in the space too, from the maturation and commercialisation of recycling technologies and leather alternatives to political changes, such as the legislative support for climate action in the US in recent weeks.

Mylo Mushroom Vegan Leather BioBased Sustainable Tech Startup
Image: Mylo

To be sure, the fashion industry’s investments in sustainable innovation is in its infancy, but there are promising signs of a broader movement. While exclusive access to maturing technologies or innovative materials with limited availability could undoubtedly give brands a competitive edge, there is a growing understanding that it is not possible for one company to do it alone. Brands are working more closely with manufacturers in a bid to embed new technologies into the supply chain, pointing to the potential for closer partnerships.

For example, when Fashion for Good — a platform that aims to drive the collective movement to environmentally friendly solutions — first launched four years ago, it started with a handful of brands and retailers as its corporate partners. Now, it counts manufacturers among its collaborators too. “We realised how important it was to get those upstream suppliers at the same table,” said Brittany Burns, director of strategy and development at Fashion for Good. “We felt like it was really important to create these opportunities for a cross-pollination of ideas, but also co-development across the entire fashion industry.”

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