With the popularity of ESG — environmental, social and corporate governance — and climate risk pervasive, businesses now rightly want to predict the future.
“We are no longer talking about climate change, we are talking about the climate crisis — and we’re in it,” said Lisa Morales-Hellebo, chief executive officer and cofounder of Refashiond OS, who with her Refashiond Venture fund is an advocate for early-stage capital investments in supply chain innovation and carbon reduction — the opposite of “quick flippable technologies” that have dazzled media.
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Climate science, and sustainability for that matter, is focused on the long term. (In a word: resilience).
Cue climate intelligence or “resilience-as-a-service,” where data analytics start-ups rise to shed light on climate disasters by plugging climate data and hyperlocal models on flooding, storm surges, wind and other weather events as far out as 80 years, in some cases.
A number of firms including One Concern, Cervest, Gro Intelligence, Climavision, Jupiter Intelligence, Terrafuse AI, Planalytics (which partnered with NPD Group in 2018) are weather-proofing enterprises.
And the space is red hot. Just last week, property data firm CoreLogic, announced a three-year U.S. collaboration with One Concern, a Menlo Park-based, resilience-as-a-service solutions provider to help “[uncover] climate-risk blindspots,” according to Ahmad Wani, chief executive officer and cofounder of One Concern. “Amidst worsening natural hazards, enterprises must build resilience strategies for an environment where black swan events are considered normal. As the world looks to face increasing climate risk, we believe ESG should have an ‘R’ for Resilience in order to address these evolving new hazards.”
Fashion is still just getting a grip on the first three letters, and is a far cry from allocating the $20 billion to $30 billion a year needed to transform the industry.
As warning bells sound for net zero following the publication of the U.N.’s latest climate report, Iggy Bassi, founder and chief executive officer of London-based cloud-based climate intelligence firm Cervest, acknowledged net zero is “necessary but insufficient,” without simultaneous investment in climate adaptation (or preparing how to adapt to global temperature and sea-level rise among other climate-induced catastrophes).
A certified B Corp, Cervest’s Earth Science AI technology informs its climate business intelligence and EarthScan products to unveil how an asset’s climate risk has changed in the past 50 years, current risks and potential risks in the next 80 years, based on different climate scenarios.
Where a priority was once solely put on consumer data and the latest trends, the fashion business is now squaring up with science — and the reality of climate change already rendering parts of its workforce as climate refugees.
Still, some scientists speak readily of the gap between science and business, leading to limits in modeling climate scenarios and thus the efficacy of climate-analytics solutions. One must venture no further than the abstract of “Business Risk and the Emergence of Climate Analytics,” a recent report in the popular Nature Climate Change journal, to understand the limitations of climate models: “The rules by which climate science can be used appropriately to inform assessments of how climate change will impact financial risk have not yet been developed.”
Enterprise “sustainability software” is already being packaged up from the likes of SAP, Salesforce and Microsoft, leading business intelligence platforms, with Microsoft launching its “Sustainability Calculator” just this July.
Meanwhile, the fashion start-up scene has other immediate priorities. Female-focused retail accelerator New York Fashion Tech Lab captures the now, with its 2021 cohort specializing in livestream shopping and product recommendations to drive compulsory spend, as well as fit technology, wardrobe aftercare and nonfungible tokens in the case of start-up 3D Robe.
The winner of LVMH’s 2021 Innovation Award was Bambuser, a start-up specialized in livestream shopping for the competition’s theme, “The Future of Customer Experience is Here.” (Earlier editions featured a broader swath of solutions across e-commerce, artificial intelligence, anti-counterfeit solutions and sustainability).
The Fashion for Good accelerator identifies start-ups driving innovation in sustainability, circularity and transparency and is bolstered by the Laudes Foundation (formerly C&A Foundation), Zalando and Kering, among others.
Every March, the program rounds up 10 to 15 start-ups for its intensive global program where founders are exposed to expertise and funding opportunities to scale their ventures. Since its beginnings in 2017, nearly 100 start-ups have passed through the program. To date, only 16 companies have dealt in supply chain transparency and traceability, or half as many firms compared to buzzy bio-materials or technology process innovators.
Start-ups &Wider and Sundar help to bridge the data gap on global working conditions while A Transparent Company and TrusTrace, for example, focus on product-level traceability. Oritain focuses on entire product regions and Made2Flow uses machine learning-based solutions to map data — including environmental indicators like CO2, water, biodiversity and energy — from multiple sources to help brands reach science-based targets.
As is the case with start-ups, the pack narrows and only some companies will be invited to Fashion for Good’s invite-only scaling program.
Despite a fold of industry executives citing traceability as an urgent priority, one supply chain start-up, Bext360 (a 2018 selection) was in the mix. A software-as-a-service platform that aims to stamp a traceable fingerprint on complex global agricultural supply chains, Bext360 uses a combination of blockchain technology, sustainability measurements and machine learning to identify where exactly goods are made, how production impacted the environment, fair wages and the social impact of sourcing practices.
Saying today’s fashion accelerators have become like consultancies in that “you’re looking at their current short-sighted solutions to what they think are their current short-sighted problems,” Refashiond’s Morales-Hellebo reiterated: “That $50 billion a year in [deadstock inventory] — that is a feature, not a bug to this industry. The opacity is a feature, not a bug. We don’t have the time to un-addict people to fast fashion, so we need to pour all our resources into the earliest stages of these fashion supply chain innovations.”