For more crisp and insightful business and economic news, subscribe to
The Daily Upside newsletter.
It’s completely free and we guarantee you’ll learn something new every day.
There’s a new way in the fashion world to avoid looking trashy: recycle.
Goldman Sachs’s asset-management unit was revealed Thursday as the leader of a new $100 million investment in Recover, a pioneering Spanish sustainable fashion company that, thanks to the deal, is now valued at $1.1 billion.
Crime of Fashion
The facts about clothing waste are dizzying. According to the UN, of the 100 billion fashion items produced every year, 60% are discarded within twelve months. In the US, 70% of the 13 million tons of clothing and footwear waste generated each year ends up in a landfill, and only 13% is recycled, according to the Environmental Protection Agency.
The Environmental Audit Committee determined 15% of all clothing fabric is thrown out at the cutting stage, before anything even ends up in stores. Greenpeace estimates consumers lose $500 billion every year because of under-wearing and lack of clothing recycling. Fashion accounts for up to 10% of global CO2 output, the UN says, which is why it couldn’t be less surprising that eco-conscious consumers and investors have fostered a market for sustainable fashion:
Recover — which says it plans to produce 350,000 metric tons of recycled cotton fiber and generate $1 billion in revenue by 2026 — provides recycled fiber to partners including retailers Primark, and Zara. It also sells clients access to its proprietary technology that can produce fiber blends from recycled material.The ethical fashion market, which includes firms that emphasize environmental and labor practices, is expected to grow at a 9.7% compound annual growth rate to $10 billion in 2025, according to data firm Research and Markets. Goldman joins California private equity firm Story3, Recover’s majority owner, and the company’s founding Ferre family as investors trying to reap that windfall.
Wet Jeans: The UN says almost 20% of global wastewater is produced by the fashion industry — of note it takes 1,760 gallons of water, the same amount a person drinks in a year, to make one pair of jeans.