ESG Outlook is Sourcing Journal’s discussion series with industry executives to get their take on their company’s latest environmental, social and governance initiatives and their own personal efforts toward sustainability. Here, Rachel Lee, general manager of materials company Hydefy, which has worked with Stella McCartney on a vegan alternative to leather, discusses leveraging Yellowstone National Park fungi to craft responsible materials.
Name: Rachel Lee
Title: General Manager
Company: Hydefy
Related Stories
What do you consider your company’s best ESG-related achievement over the last 5 years?
Hydefy leverages fungi with origins in Yellowstone National Park to craft responsible materials. Using a proprietary fermentation technology, the company grows a new-to-the-world fungi and combines it with sugarcane waste-derived inputs to create durable, versatile textiles—entirely vegan, cruelty-free and made to move the world forward.
Our biggest ESG achievement over the last five years has been building the company from the ground up and launching our inaugural product. What started as an idea and a lab experiment is now a tangible material on the runway. We’re proud to offer a breakthrough textile that’s animal-free and designed to reduce environmental impact. It’s a meaningful step toward reshaping the future of fashion with more responsible choices for consumers and the planet.
What is your company’s latest ESG-related initiative?
Because one ESG initiative isn’t enough, we are actively focused on both supply chain optimization and material recyclability. On the supply chain front, we leverage existing manufacturing infrastructure. We like to say we use “common polymer industry equipment in an uncommon way.” This innovation has allowed us to move quickly and scale efficiently, and now we’re focused on streamlining further to minimize transportation and reduce impact.
At the same time, we’ve demonstrated the recyclability of our materials in both lab and small-scale production settings. Our next phase is to integrate that recyclability more deeply into our operations. To guide and support these efforts, we are conducting a refreshed Life Cycle Assessment (LCA) to ensure our decisions are grounded in up-to-date, data-driven insights.
What is the biggest misconception consumers have about sustainability in fashion/accessories?
One of the biggest misconceptions is that sustainability in fashion is black and white; when in reality, it’s anything but. Terms like “natural,” “bio-based” or “plastic-free” are often seen as inherently good, while words like “chemical” or “synthetic” can spark negative reactions. While it’s tempting to simplify and rally around certain principles, sustainability is far more complex and nuanced.
For example, I’ve been asked whether our products contain chemicals. To which I would say: yes. All materials, even natural ones, are made of chemicals. Chemicals form the building blocks of virtually everything around us, including safe, high-performing materials. Similarly, not all plastics are created equal, and “bio-based” doesn’t always translate to lower environmental impact.
At Hydefy, we try to bring more clarity and honesty to the conversation. We are trying to do our part to minimize the resources that we use and to think about the longevity and afterlife of what we create. It’s about looking at the full picture—not just the buzzwords.
What was your company’s biggest takeaway from the COVID-19 crisis that is still relevant today?
One of our biggest takeaways from the COVID crisis is the importance of adapting to broader tides, whether it’s the global economy, shifting consumer sentiment or unexpected disruptions. We started building the product during the COVID pandemic. It was a black swan event that affected everything from being able to work in-person (critical for a physical product) to securing equipment in a timely manner. While the supply chain disruption and ways of working in-person have been resolved, the same principles of broader trends and having to adjust, whether riding the waves or hunkering down, still stand. That mindset is just as relevant today, especially as we navigate another complex macroeconomic environment.
What do you consider to be the apparel industry’s biggest missed opportunity related to securing meaningful change?
The biggest missed opportunity is the failure to internalize environmental and social externalities into the true cost of doing business—from raw material extraction to final pricing. Today’s system is designed to optimize short-term costs and returns, serving individual company metrics and shareholder value rather than the health of the overall ecosystem.
This cost-blindness incentivizes overproduction and lower-than-true-cost-pricing, making it difficult for innovative materials to compete. As long as environmental damage, labor exploitation and product afterlife aren’t reflected in the cost structure, there’s little financial incentive to make different choices, even when better options exist.
The opportunity lies in rethinking value creation. We need stronger private-public sector partnerships, where the government sets clear guardrails and accountability measures and private companies innovate within them. That’s how we move beyond isolated efforts and drive meaningful, systemic change.
What is your personal philosophy on shopping and caring for your clothes?
I’m trying to move toward owning fewer, higher-quality pieces that last. That said, I admit I tend to hang on to clothes for too long. I have a bit of a hoarder’s instinct and find it hard to part with clothes, even when I don’t end up wearing them. I’m working on being better about letting go—slowly Marie Kondo-ing my closet—but it’s a process!
One thing I’ve started doing over the past few years is organizing dessert and clothing swap parties with friends, especially before big moves. We bring nice pieces that don’t get much wear—often items we feel too attached to donate. It’s great to see how something that no longer sparks joy for one person can become a favorite for someone else. And doing it within a group of friends makes it easier to part with pieces. It’s a fun way to spend quality time while refreshing wardrobes.
How much do you look into a brand’s social or environmental practices before shopping?
At a basic level, I usually check the tags and packaging—I tend to favor brands that use recycled materials, especially for things like polyester or nylon, where circular options are becoming more common. For consumables, I prefer refillable models and actively avoid single-use plastics whenever I can. When shopping online, I make an effort to consolidate orders—waiting until I have a list of things I need so I can minimize packaging and reduce the shipping footprint.
