07-Nov-2016

Australia’s first 100% impact venture capital fund hosts Patagonia’s “$20 Million & Change” Fund

By Will Richardson

Outdoor apparel brand, Patagonia, has been living its ethos of responsible business for decades, by continually searching for ways to minimise its environmental impact.  A legally constituted Benefit Corporation in California, it has given more than $70 million to environmental groups since 1985 as part of 1% For The Planet (co-created by Patagonia’s own founder, Yvon Chouinard).

In 2013, to accelerate the next generation of environmentally conscious companies, Patagonia established its private venture capital fund, $20 Million & Change, seeded with an initial investment of US$20 million by Patagonia. Since then $20 Million & Change has invested US$44 million into over a dozen environmentally and socially responsible start-ups operating in the clothing, food, water, energy, and waste sectors. 

Founded in 2016, Impact Investment Group’s (IIG) Giant Leap Fund offers investors blended returns, marrying profit with social and environmental impact -  the latest evolution in responsible investing and poised to become more popular in the coming years. By supporting start-ups using business as a force for good, we are standing on the shoulders of giants, and we were fortunate to host one of those giants last month in Melbourne: Patagonia’s Global Director of Corporate Development, Phil Graves. 

Patagonia has investments spanning from sustainable manufacturer Bureo, a company that turns end of life fishing nets into skateboards and sunglasses to CO2Nexus which is a closed-loop textile cleaning solution that does not use any water. $20 Million & Change’s mandate is best explained by Graves’ four-year-old daughter, Ruby: “my Dad gives Patagonia’s money to companies that are good for the earth”.

Graves came from the world of finance and was one of the rare individuals, who “had a compost pile in Dallas [Texas]”.  His background and philosophy on life was a perfect match to drive Patagonia’s investment arm in pursuit of its mission “to use business to inspire and implement solutions to the environmental crisis.”  Graves said that $20 Million & Change exists “to fund the next generation of responsible business, especially to the extent that it can help us make a jacket while causing less environmental harm”.

Graves also shared some examples of the Fund’s investments, this time through the eyes of his seven-year-old daughter, Lily.  “She was like, ‘Dad, you should find a company that makes a plastic that a sea turtle can eat and it wouldn’t hurt the sea turtle’. And I thought, that’s brilliant for a seven-year-old to think of that.  It turns out we were actually visiting a company that week that makes a bio-plastic that’s biodegradable in just a couple of weeks in the ocean environment.”

Like us, Graves is optimistic about the positive impact business can have an immediate impact on pressing environmental issues such as climate change.  “I think we can do it pretty quickly. But it’s something that we’re not going to succeed at if we do it by ourselves. So having a coalition of mission-driven companies, a coalition of like-minded investors, that’s going to be imperative for us to actually make a difference.” 

We are so chuffed about the alignment between our shared vision of the world and we can’t help but be inspired by the musings of Patagonia’s founder, Yvon Chouinard that “anytime I made a decision for the environment, over the long haul, it made money”. 

Will Richardson is the Chief Investment Officer of IIG and leads Giant Leap.

About IIG and Giant Leap

Giant Leap is Australia’s first venture capital fund which is 100% dedicated to investing in exceptional, rapidly scalable impact businesses which deliver financial returns with social and environmental impact.  Giant Leap will invest in companies that improve overall health and wellbeing, empower people and encourage sustainable living while increasing shareholder value. Giant Leap has a target 20% internal rate of return per annum.Giant Leap is founded and operated by IIG.  

IIG is a leading impact investment funds manager with investments across property, renewable energy infrastructure and venture capital. IIG was founded in 2013 and has over $400 million in funds under management.  IIG's owners are its CEO, Chris Lock, and Small Giants, the family office of Danny Almagor and Berry Liberman. 

Both IIG and its co-owner Small Giants, are Australian certified B Corporations. Over 1,800 B Corporations worldwide are using the power of business to solve social and environmental problems - not just to be the best in the world, but for the world.



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