A growing number of investment rounds are bringing sustainability-centric endeavors and more often than not, sustainability-focused tech, to the fore, as consumers and shareholders, alike, continue to focus on the sizable role that retail – including fashion industry – plays in the larger climate crisis. With rising consumer awareness and resulting demands for action and transparency on this front, investors increasingly taking environmental, social, and governance (“ESG”) factors into account when making decisions, and lawmakers across the globe pushing for climate-centric legislation in light of rampant greenwashing, we have compiled a (running) timeline of funding and M&A to provide a broad overview of sustainable investments in fashion and the broader retail space, and shed light on what the trajectory of this segment of the market looks like more generally …

Mar. 30, 2023 – Gen Phoenix Raises $18M for Recycled Leather Biz

Gen Phoenix, which boasts the title of “the leading producer of sustainable recycled leather at scale, raised $18 million in a new round led by venture capital firm Material Impact, with participation from Dr. Martens, InMotion Ventures, the investment arm of Jaguar Land Rover, and Coach and Kate Spade owner Tapestry. The funding round also includes existing investors ETF Partners and the Hermes GPE Environmental Innovation Fund. The company says it will use the new cash to “bolster growth for the business and further efforts to meaningfully tackle the world’s waste problem.” In particular, it will be focused on “reaching new partners, deepening current relationships, and scaling product innovations.”

Mar. 21, 2023 – Inditex to Invest €15M in Regenerative Nature Fund

Zara-owner Inditex will invest €15 million in non-profit Conservation International to expand and scale the work of the Regenerative Fund for Nature. Launched in 2021 by Conservation International and Kering, the initiative aims to “transform 1 million hectares of crop and rangelands into regenerative agricultural systems by 2026.” Inditex says that the investment “will work to enhance sustainability in the fashion industry, which is fundamentally dependent on agriculture for its raw materials.”

Mar. 7, 2023 – tex.tracer Raises €1.7M in Growth Capital

Tex.tracer has raised €1.5 million ($1.59 million) in growth capital from ROM InWest, HearstLab, Joanna Invests, and angel investors. The Amsterdam-headquartered SaaS platform “unlocks insightful supply chain information” for fashion/apparel brands and retailers, enabling them to access “verified data so they can work with suppliers to reach their sustainability goals” and ensure compliance with “upcoming rules and legislation.”

Mar. 1, 2023 – Circ Raises $25M in New Round

On the heels of closing a $30 million-plus series B round in July 2022 (led by the Bill Gates-founded Breakthrough Energy Ventures and with participation from Zara owner Inditex), Danville, Virginia-based Circ has raised $25 million in a new round led by Zalando with participation from Avery Dennison and Korean outdoor apparel and footwear manufacturer, Youngone. The company – which developed a “technology system that returns clothes back to the raw materials” – will use the new cash to accelerate its engineering expansion and bring its first consumer products to market.

Mar. 1, 2023 – SESAMm Raises $37M in Series B2 Round

SESAMm has raised €35 million ($37 million) in a Series B2 round co-led by Elaia, a deep tech VC firm, and Opera Tech Ventures, the venture capital arm of BNP Paribas. A leader in natural language processing (NLP), which is a field of AI, SESAMm enables companies to track relevant ESG data by “generating insights for controversy detection on investments, clients and suppliers, ESG, and positive impact scores, among others.” The new funding will enable SESAMm to “further expand into U.S. and Asian markets, support technology development to generate AI-powered ESG and sentiment analytics, and hire key talent across sustainability, technology, sales, and marketing.”

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Two-thirds of countries have now committed to reaching net zero greenhouse gas emissions at some point this century, and during 2021, the share of large companies with net zero commitments (including in the fashion industry) jumped from one in five to one in three. Yet, few of these net zero targets were accompanied by measures necessary to achieve them. This discrepancy is increasingly becoming the subject of legal challenges. The governments of the Netherlands and Germany, as well as oil major Shell, for instance, are among defendants that have been ordered by courts to cut emissions faster. 

Globally, the number of climate-related court cases has doubled since 2015. The UK is the latest country whose government have sued by environmental groups for failing to take sufficient action on climate change. While the country’s net zero strategy deserves praise for some aspects – like setting a deadline to phase out new petrol and diesel cars by 2030 – even the government’s climate change advisor thinks it will not be enough to meet statutory carbon targets.

So, what does a good net zero strategy look like? Net zero strategies can be measured against three principles: the urgent pursuit of emission cuts, the cautious use of carbon offsets and carbon removal, and alignment with broader objectives for sustainable development.


Because global temperature change is determined by cumulative emissions, the pace at which we reduce emissions is important. The longer we wait, the sooner the remaining carbon space in the atmosphere is used up. As such, net zero strategies must contain measures to start cutting emissions immediately. These are often lacking or vague. The UK strategy, for example, proposes replacing gas boilers with heat pumps, but the support program it offers is available to only a small proportion of buildings and households.

Emissions cuts must also be comprehensive and include the most difficult sectors to decarbonize, such as heavy industry, aviation, agriculture, and fashion/apparel, which maintains a complex web of supply chains. Tackling them will require consumers to make difficult choices, for example, about how much they travel, what they buy, and what they eat. Most net zero strategies shy away from spelling these out.


The net zero strategies of many companies and governments rely heavily on carbon offsets. That is, rather than reducing their own emissions, they pay third parties to reduce theirs, for example, by funding renewable energy projects or planting trees. This raises a number of problems. For instance, it is difficult to prove whether offsets actually reduce emissions. Many projects funded via offsets would have happened anyway. The offset market needs much more rigorous regulation. 

More importantly, net zero requires all emissions to come down. Offsets should not be used to allow pollution to continue unabated. They are a last resort. If a strategy does include using offsets, those offsets should remove carbon from the atmosphere, rather than reduce emissions elsewhere. This is the meaning of net zero – a balance between emissions and removal. 

Most options for removing carbon are biological, such as tree planting. Technological solutions, such as capturing carbon directly from the air and storing it underground, are still at the pilot stage, and there are concerns about their cost and ability to safely store CO₂. Most modelled pathways for meeting the Paris Agreement’s goal of averting dangerous climate change involve scaling up carbon removal. The world needs more investment in these techniques, but also stronger legal frameworks to ensure their risks are managed properly, and an honest public debate to make sure people are on board with it. 


Net zero strategies do not work in isolation. They must be aligned with broader environmental, social, and economic objectives. They will fail unless they proactively manage the impact of decarbonization policies on workers, communities, and households. Thankfully, labor market interventions like re-skilling programs can help workers transition into low-carbon employment, and social welfare payments can shield households in poverty from energy price rises. Both must form an integral part of net zero strategies.

Climate action can have multiple additional benefits, for biodiversity, public health, and food security, but this is not guaranteed, and interventions can have unintended consequences. For example, commercial plantations of exotic tree species in naturally treeless habitats may claim to store carbon, but they could crowd out native species, rob local people of traditional livelihoods or succumb to pests and diseases.

There are economic opportunities that net zero strategies should aim to capture. Low-carbon technologies like electric vehicles may unleash a virtuous cycle of innovation, investment and growth as information technology did two decades ago. More immediately, investment in, for example, home energy efficiency and renewable energy could help the economy recover from the pandemic in a sustainable way. 

Unfortunately, only a fraction of economic recovery packages offered by governments have been genuinely green. The necessity of reaching net zero emissions is a scientific reality. The growth in net zero targets suggests that political and business leaders know this to be true. They are still struggling to make social, economic, and political sense of net zero, as the emergence of court challenges shows. But we are starting to understand how to get net zero right. If interpreted and governed well, net zero could be the best hope we have for climate action.

Sam Fankhauser is a Professor of Climate Economics and Policy at the University of Oxford. 

Kaya Axelsson is a Net Zero Policy Engagement Fellow at the University of Oxford. (This article was initially published by The Conversation.) 

A new decision from the National Advertising Division (“NAD”) of the BBB National Programs raises some interesting questions for brands in the business of making “net zero” claims. In a decision this month, the NAD dove into claims that American food processing company JBS USA Holdings made about its commitment to being “net zero by 2040.” The matter got its start when the Institute for Agriculture & Trade Policy (“IATP”) initiated an NAD proceeding, challenging an array of statements that JBS made on its website and social media accounts, as well as in publicly accessible corporate reports and in media articles, which, according to IATP, convey the objective – and unsubstantiated – message that it has “an operational plan in place to achieve its net zero goals and is implementing such a plan.”

In its NAD complaint, IATP challenged the following claims made by Greeley, CO-headquartered JBS: (1) “JBS is committing to be net zero by 2040”; (2) “Global Commitment to Achieve Net-Zero Greenhouse Gas Emissions by 2040”; (3) “Bacon, chicken wings and steak with net zero emissions. It’s possible;” and (4) “Leading change across the food industry and achieving our goal of net zero by 2040 will be a challenge. Anything less is not an option.” These statements make it seem like JBS has “an operational plan in place to achieve its net zero goals” and is “actively reducing its emissions and building more sustainable operations,” when it does not, IATP argued. 

In response to IATP’s complaint, JBS argued that its “net zero” claims are aspirational and intended to communicate that it has set a carbon emissions goal. In furtherance of its goal, JBS cited evidence of how it is working to achieve it, including by issuing a $1 billion Sustainability-Linked Bond, linked to its net zero climate goals; signing an agreement to purchase verified emission reductions (i.e., carbon offsets); and partnering with experts to research and study supply chain considerations to address Scope 3 reductions and help it reach its “net-zero by 2040” goal, among other things. 

With the foregoing in mind, the NAD determined that not only do JBS’ claims “reasonably create consumer expectations that [its] efforts are providing environmental benefits,” its claim about achieving “‘net zero’ emissions by 2040 [is] a measurable outcome.” Specifically, the NAD asserted that “net-zero” is “a recognized standard that guides companies in defining and establishing short and long-term science-based greenhouse gas emission reduction goals aligned with the legally binding 2015 Paris Agreement.” 

While the company has made a “significant preliminary investment” toward reducing emissions and has “undertaken steps to begin learning how to address the operational and scientific challenges it will face” (which are steps that “may be helpful towards achieving net-zero by 2040”), the NAD found that this is not enough to “support the message conveyed by the [company’s] claims.” In particular, the NAD maintained that the evidence provided by JBS “did not support the broad message conveyed that [it] has a plan that it is implementing today to achieve net zero operational impact by 2040.” 

As a result, the NAD has recommended that JBS discontinue its use of each of the challenged “net zero” claims. At the same time, it noted that “nothing in its decision precludes JBS from making narrower truthful and not misleading claims regarding its efforts at researching potential methods for reducing emissions and any efforts it is undertaking to reduce emissions.”

The advertising body’s decision falls in line with its enduring crack-down on aspirational environmental benefit claims, with Davis+Gilbert’s Ronald Urbach and Alexa Meera Singh stating last year that the NAD has been “seemingly going further” than others “in requiring that advertisers demonstrate that their goals and aspirations are not merely illusory and provide evidence of the steps being taken to reach their stated goals.” They point to NAD decisions in challenges involving Chipotle, Butterball, and Everlane as examples

JBS has since announced that it will appeal the NAD decision based on its disagreement that “the challenged aspirational claims communicate a message that it has a detailed plan in place today to achieve net-zero by 2040 – 17 years from now” and in light of its belief that “its claims are substantiated by the foundational work it has done to date.” 

Reflecting on NAD’s decision, Kelley Drye’s Gonzalo Mon and and Katie Rogers state that it “raises a lot of questions,” including whether “consumers really expect that companies have all the details worked out when they make an aspirational claim? What separates a good foundation from a good plan? And what more narrow and less definitive statements can a company make while it formulates its plan?” 

THE BIGGER PICTURE: The matter is worthy of attention in light of the enduring practice by companies across industries to tout their plans for achieving “net zero” status. It is also the latest indicator of rising attention to companies’ claims on the ESG front, including ones that are aspirational in nature. Not limited to NAD actions, a number of companies have been the target of lawsuits claiming that they failed to live up to aspirational marketing statements. It is worth noting that the outcome in at least one of those cases – the one that Earth Island Institute waged against Coca-Cola – “suggests that advertisers may have some breathing room to make aspirational statements” depending on where the challenges take place (i.e., before the NAD or certain courts), per Mon.

(In a Nov. 2022 decision, the Superior Court of the District of Columbia granted Coca-Cola’s motion to dismiss this case, finding that Earth Island Institute failed to allege that Coca-Cola’s ESG-centric advertisingstatements were provably false or plausibly misleading.)

Environmental, social and governance business standards and principles, often referred to as “ESG,” are simultaneously becoming more commonplace and more controversial. But what does “ESG” really mean? In short: The term refers to the way that many corporations operate in accordance with the belief that their long-term survival and their ability to generate profits require accounting for the impact their decisions and actions have on the environment, society as a whole, and their own workforce. These practices grew out of long-standing efforts to make businesses more socially and environmentally responsible. ESG investing – sometimes called sustainable investment – also takes these considerations into account.

Zeroing in on the E, S & G

ESG priorities vary widely, but there are some common themes. These priorities usually emphasize environmental sustainability – the E in ESG – with a focus on contributing to efforts to slow the pace of climate change. There is also an effort to uphold high ethical standards through corporate operations. These social concerns – the S – can include, for example, ensuring that a company does not buy goods and services from exploitative suppliers (this was at the center of the relatively recent pushback against goods, such as cotton, that were “mined, produced, or manufactured, wholly or in part, in the Xinjiang Uyghur Autonomous Region”), or treats its employees well. Or it might entail hiring and retaining a diverse workforce and taking steps to reduce social injustices in the communities where a corporation operates.

Finally, companies embracing ESG principles should also have high-quality governance – the G in the equation. Governance includes oversight, handled by a competent and qualified board of directors, regarding the hiring and firing of top corporate leaders, executive compensation and any dividends paid to shareholders. Governance also pertains to whether a company’s leadership operates fairly and responsibly, with transparency and accountability.

Why ESG matters

By 2026, the total amount invested globally according to these principles will nearly double to $34 trillion from $18.4 trillion in 2021, accounting firm PwC estimates. However, increasing scrutiny of which investments really qualify as ESG could mean it takes longer to reach that volume. This corporate concept is becoming a political touchstone in the U.S. (and a regulatory one, as well) because some states, like Florida and Kentucky – arguing that these practices divert from the focus on maximizing profits and can be detrimental to investors by making other considerations a priority – have looked to bar their pension funds from using ESG principles as part of their investment considerations. Some very large asset managers, including BlackRock, are not allowed to work with those pension funds anymore. (Note: There is quite a bit of nuance to such bans – and what “ESG investing” entails – as Matt Levine pointed out in a recent newsletter.)

Many of the arguments against embracing these principles hold that they reduce profits by taking other factors into account. But how do ESG practices affect financial performance? A team of New York University scholars looked at the results of 1,000 different studies that had sought to answer this question. It found mixed results: Some of the studies found that ESG principles increased returns, others found that they weakened performance, and a third group determined that these principles made no difference at all. It is possible that the disparities among results could be due largely to the lack of clarity regarding what counts and does not count as ESG, which has been a long-standing discussion and makes it hard to assess how ESG investments perform.

The NYU scholars also found two consistent results regarding ESG strategies. First, they help protect investors against risks – such as losses resulting from the failure of a supply chain due to environmental or geopolitical issues – and they can protect companies from volatility during periods of economic instability and downturns. Second, investors and companies benefit more from ESG strategies in the long term than in the short term.

Luciana Echazú is the Associate Dean of Undergraduate Education, and an Associate Professor of Economics at the University of New Hampshire. 

Diego C. Nocetti is the Dean of the School of Business, and a Professor of Economics and Financial Studies at Clarkson University. (This article was initially published by The Conversation.)

Following a 4-0 vote earlier this month on “whether to publish a Federal Register notice commencing a regulatory review of the Guides for the Use of Environmental Marketing Claims, known as the ‘Green Guides,’” the Federal Trade Commission (“FTC”) is seeking comment on potential updates and changes to the Green Guides. In a release on December 14, the regulator said that it is requesting “general comments on the continuing need for the guides, their economic impact, their effect on the accuracy of various environmental claims, and their interaction with other environmental marketing regulations.” It is also seeking “information on consumer perception evidence of environmental claims, including those not in the guides currently.”

First issued in 1992 and were revised in 1996, 1998, and 2012, the Green Guides provide guidance on environmental marketing claims, including how consumers are likely to interpret particular claims and how marketers can substantiate these claims to avoid deceiving consumers. A potential new revision comes as “consumers are increasingly conscious of how the products they buy affect the environment, and depend on marketers’ environmental claims to be truthful,” according to Bureau of Consumer Protection Director Samuel Levine.

As for specific issues on which the FTC says that it expects to get many public comments, those include …

Carbon Offsets and Climate Change: The current Guides provide guidance on carbon offset and renewable energy claims. The Commission invites comments on whether the revised Guides should provide additional information on related claims and issues.

The Term “Recyclable:” Among other things, the FTC seeks comments on whether it should change the current threshold that guides marketers on when they can make unqualified recyclable claims, as well as whether the Guides should address in more detail claims for products that are collected (picked up curbside) by recycling programs but not ultimately recycled.

The Term “Recycled Content:” Comments are requested on whether unqualified claims about recycled content – particularly claims related to “pre-consumer” and “post industrial” content – are widely understood by consumers, as well as whether alternative methods of substantiating recycled content claims may be appropriate; and 

The Need for Additional Guidance: The Commission also seeks comment on the need for additional guidance regarding claims such as “compostable,” “degradable,” ozone-friendly,” “organic,” and “sustainable, as well as those regarding energy use and energy efficiency.

THE BOTTOM LINE: Reflecting on potential changes to the Green Guides, Beveridge & Diamond PC stated in a note that “the most direct impact of the Green Guides refresh will be on federal enforcement regarding allegedly false or misleading environmental marketing claims.” However, they state that the Green Guides “also serve to guide: 1) Enforcement of state consumer protection laws; 2) @ourt decisions on civil suits, including class action greenwashing suits; and C) competitor challenges brought before the National Advertising Division of the Better Business Bureau.”

As such, even if the Green Guides remain non-binding, the Beveridge & Diamond attorneys assert that “any refresh will the potential legal consequences stemming from environmental claims. Beyond federal and state regulation, companies should also take note of the growing risk of consumer and class action litigation related to corporate sustainability marketing claims.”

UPDATE (Jan. 31, 2023): The FTC has announced that “at the request of several interested parties,” it has extended the public comment period for 60 days, until April 24, 2023. The regulator stated that its vote to approve extension of the public comment period, which was set to expire on February 21, was 4-0. 

This article was initially published on December 14, 2022.