While the rise of impact investing in the fashion industry is a promising sign that sustainability isn’t a passing trend, it’s not without critics. A look deeper reveals underlying tensions between the fundamental values of investors and the values entrenched in the sustainable fashion movement.
While many funds are investing in sustainable fashion because they believe in the movement, there are inevitably those who jump on the bandwagon when they spot a trend. Keehn says he has experienced a misalignment of values in his encounters with potential investors in Accompany. “I think venture capital is counterintuitive to some of the social impact goals. There are some investors that are looking to invest in mission driven concepts, but most of the money is just looking for the next new thing, because sustainable brands are hot right now.”
This causes problems when, after receiving funding, sustainably minded companies are pushed to scale rapidly in ways that are counterintuitive to their business model. “There are investors who are expecting incredible returns and rocketship growth in the first year,” says Keehn. “But that doesn’t work with an ethical business [like Accompany] that is trying to support indigenous communities — it’s not a tech concept that you can increase by 20x the revenue in a year.”
Ayesha Barenblat, founder and CEO of Remake, a non profit advocacy group that is responsible for campaigns like #PayUp, has had a similar experience with investors. “I have been advised by impact investors to monetize our Seal of Approval process, and run our brand directory with affiliate marketing dollars,” she says. “But as an advocacy organization, I believe it muddles the mission to take money from impact funds that are focused on scale and return.”