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What if the solution to fast fashion is not buying less and using longer, but renting an array of trendy, designer clothes for an affordable price? Rent the Runway went public this week with the stock symbol “RENT.” Founded in 2009, it has grown into a fashion industry disruptor with 112,000 subscribers renting everything from designer workwear to maternity clothes to handbags. The vast majority say they buy less fast fashion and fewer clothes overall after joining.
While many are heralding this women-led, women-founded company as a sustainable alternative to fast fashion, competing studies recently looked at the environmental impacts of clothing rental. One study suggested that it is more harmful to the planet to rent clothes than throw clothes out and buy new ones. Rent the Runway responded by commissioning its own study, reporting that renting has net environmental savings in water, energy, and emissions due to the company’s role in displacing the production of more than 1 million new clothing items since 2010. These competing studies are an example of how the “circular economy'' model, which includes sharing and recycling, should be watched closely to understand the true impacts on the environment of these new market entrants.
Another circular economy company we’ve talked about before, Allbirds, is preparing for its IPO. Earlier this month, the company amended portions of its filing documents dealing with sustainability, eliminating almost half of the references to it in the filing.
Other market debuts to watch this week: Fluence Energy (FLNC) today and Udemy (UDMY) tomorrow. The green energy storage unicorn Fluence Energy says its carbon reduction impact is the equivalent of taking 30,000 cars off the road each year. Edtech firm Udemy, which was included on Fortune’s 2020 Change the World list, is aiming to be valued at around $4 billion and eyeing growth in its enterprise B2B business.
All that glitters is not good
Inflation is on everyone’s minds, lips, and bills these days, and gold is often said to offer protection against it (although the jury is still out on that). Whether you’re considering gold as a socially responsible investor or as a consumer, buying gold can be fraught with concerns about human rights abuses and environmental impact.
Most of the ESG problems arise in mining projects, which may pollute the atmosphere with toxic chemicals like cyanide and mercury, exploit labor, and harm local communities. On average, mines emit nearly 1 ton of CO2 for every ounce of gold. The “dirty” background is erased with processing in places like Switzerland before the finished product we see emerges as bullion, coins, or jewelry.
So how do you know what you buy meets the gold standard (ha!) for sustainability?