Patagonia’s $20 Million and Change begins with some disruption in the water

Can water be eliminated from the apparel manufacturing process? Patagonia invests in the mission with the goal of changing the business-norm.

Talk to new Patagonia CEO Rose Marcario about how business can positively change the planet and one word stands out: “disruptive.”

Now while that sounds more like the mantra of a punk band, or more recently tech brands like Apple when they debut new technology, it’s now the latest phase of Yvon Chouinard’s master plan of not just doing business but changing the way business changes the world.

“We want to disrupt what is broken in business and the supply chain,” Marcario told SNEWS.

That process began last month when Patagonia’s investment fund $20 Million and Change, announced a strategic investment in CO2Nexus, a Denver-Colo.-based company that has created TERSUS, a sustainable method of cleaning, disinfecting and coating textiles that uses pressurized liquid carbon dioxide rather than water. That process eliminates waste water and uses less energy than standard water and/or solvent methods, which use 100 gallons of water or more for each pound of textile processed, resulting in hundreds of billions of gallons of waste water in the United States alone.

“We really liked what they could do in terms of the waterless process,” Marcario said. “We have to figure out ways to waste less water. Hopefully there will be waterless washing machines in houses soon.”

CO2Nexus is the first step in a plan that has seen Patagonia restructure and Marcario take its top post. Two years ago, Patagonia became a California B Corp, or benefit corporation, a company that commits to a social or environmental mission and takes on a legally binding fiduciary responsibility to take into account the interests of workers, the community and the environment as well as its shareholders. Last May it also restructured to create Patagonia Works, a holding company which includes Patagonia, Inc., Patagonia Provisions, Patagonia Media, and future investments and joint ventures. It also marked the introduction of the $20 Million and Change fund, dedicated to investing in sustainable business. Over the summer, longtime Patagonia CEO Casey Sheahan stepped down and Marcario, who had been with the brand since 2008, and was already the CEO of Patagonia Works, took over at Patagonia Inc. as well. 

While most holding companies are about diversification, Patagonia Works is dedicated to a single cause: using business to help solve the environmental crisis,” explained Chouinard on Patagonia’s Cleanest Line blog.

CO2Nexus certainly does that. TERSUS blasts fabrics with CO2 that has been pressurized so that it is liquid. Once it contacts the textile it blasts away soils and other impurities. It then depressurizes back into a gas, creating no waste, especially since — don’t worry — the CO2 is existing gas not adding to greenhouse gases. That process can do everything from prepare textiles for new products or help clean existing garments. Patagonia has already been using the process to restore dirty (and expensive) Encapsil Parkas back to new quality. And, unlike water, the CO2 process does not affect the loft of down.

"There’s so much greenwashing out there. We are what sustainability really should be," CO2Nexus President and CEO Richard Kinsman told SNEWS. "We are really using nature to do something."

There is some barrier to the process beyond simply replacing current water and solvent systems, since it doesn’t run on the same machinery, but making the transfer to the CO2 system is exactly where $20 Million and Change looks to help.

The ability to turn the traditional processes on their heads, to eliminate incredible amounts of waste while still doing business is exactly the type of disruptive action Marcario wants to achieve through $20 Million and Change. The fund will soon be supporting more companies that can create such drastic change in the supply chain and beyond.

“Any company that comes onto the scene and disrupts the status quo and takes a polluting industry and changes the paradigm and uses less water, creates less waste — these are who we want to invest in. They are changing the model, creating more sustainability. This is where we will focus,” she said.

$20 Million and Change is not the only agent of this type of change in the outdoor industry. The outdoor industry is ripe with brands looking to change the supply cycle paradigm and promote sustainable business. Eric Reynolds, the founder of Marmot and Nau, campaigned for years for a U.S. Constitutional amendment that would require corporations to include the mission “to do no harm” in their charters. Boulder, Colo.-based GoLite is also a B Corp, co-owned by Kim Coupounas who has taken the title of Chief Sustainability Officer and overseen the brand’s environmental and socially focused mission.

The closest as far as investing in other companies to $20 Million and Change is White Road Investments, which is funded by Gary Erickson and Kit Crawford, the founders of Clif Bar. White Road helps fund mission-driven natural foods, outdoor and bike companies with $1 million to $20 million in annual revenue. It is currently funding 13 companies, including most recently, the popular Ragnar Relays in the outdoor space.

“What Patagonia is doing is great,” said Gregg Bagni, a longtime outdoor and bike industry vet and consultant on the White Road team. “The more who embrace this, the better it gets.”

At CO2Nexus, Richard Kinsman feels that Patagonia’s support goes beyond the actual monetary funding.

“It’s a huge validation of our business,” he said. “Patagonia wrote the book on premium outdoor apparel. They would not expose their brand to something they hadn’t vetted left and right. $20 Million and Change looked at hundreds of applicants. To come out on top, speaks well for us. We are ready to take it form here.”

The disruption has begun.

--Doug Schnitzspahn



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