German lifestyle brand Hugo Boss has become the first company to invest in a 100-million-euro climate-focused venture capital fund with a mission to drive sustainable innovation in fashion.
The label has teamed with Zurich-based Collateral Good, a technology-driven investment group founded two years ago by molecular and cell biologist Dr. Regina Hecker, retail expert Mariana Gonzalez and entrepreneur and investor Michael Kleindl. The group’s Collateral Good Ventures Fashion I fund will back teams leveraging science and cutting-edge tech to help shrink fashion’s environmental footprint and better its social impact. Launched last month, the fund aims to bring about 25 circular, scalable businesses into its portfolio from across the globe, with a focus on Europe and North America.
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The fund will leverage Hugo Boss’s contribution over the course of five years to bolster the work of several portfolio companies in the startup and early-growth stages. With a total target volume of 100 million euros, about 10 percent will see investments by Hugo Boss. These players will be developing solutions that impact various links in the supply chain, from upcycling raw materials to mitigating microplastic pollution and creating repair services to an extend a product’s lifecycle.
Hugo Boss CEO Daniel Grieder said that the brand’s goal of accelerating growth “is guided by our commitment to be sustainable throughout.” In 2021, the company launched its Claim 5 sales strategy aimed at doubling revenue to 4 billion euros by 2025. According to Grieder, the partnership with Collateral Good complements the brand’s existing sustainability strategy. Hugo boss has pledged to slash Scope 1 and Scope 2 emissions, generated by company facilities and the purchase of electricity, by at least 50 percent by 2030. It will also tackle Scope 3 emissions, the result of activities by non-owned parts of the business, like factories, halving them by 2030 from a 2019 baseline.
“Through this new form of investment, we will look for new solutions to target areas such as increasing circularity, using only nature-positive materials, eliminating microplastic pollution, and achieving zero emissions,” Grieder said. “Together, we will fund the most promising technologies and innovations that drive sustainability within our industry and explore how we can integrate them into our products and processes at scale,” he added. “Our aim is to accelerate the transition to a more sustainable fashion system, and open up new opportunities for our industry and peers.”
While Collateral Good customarily backs companies in their early stages with Seed or Series A funding, the group said it is willing to invest in enterprises that are further along in their missions, too. Flexible initial investments might range from 500,000 euros to 2.5 million euros, with the opportunity for continued backing. With ties to leaders in the packaging, retail and supply chain sectors, the venture capital firm said it could offer help to portfolio companies in the realms of research and development, environmental, social and governance (ESG) strategy and implementation, intellectual property, product development, scaling and commercialization.
The Collateral Good Ventures Fashion I fund, which will be based in Luxembourg, Germany, is classified as a “Dark Green Fund” under the EU Sustainable Finance Disclosure Regulation (SFDR Art. 9), meaning that all money goes toward sustainable investment objectives.
The launch, and Hugo Boss’s commitment, have already generated interest from other potential investors. Collateral Good co-founder and managing partner Michael Kleindl said the brand was “the perfect ally in our mission to decarbonize the fashion industry.”
