If You Pollute, You Have to Pay

If You Pollute, You Have to Pay

Author: Vera Koester, Eva Karlsson

Eva Karlsson, CEO of the Swedish outdoor brand Houdini Sportswear, talks with Vera Koester for ChemViews Magazine about what a small company can achieve with creativity and the right partners, how business models are changing, and what this means for the economy.



Can you say in a few words what distinguishes your company from others in the industry?

Since 2001, we have been working in strong partnerships to move from linear to circular concepts and to find solutions or new technologies that are regenerative rather than contaminating nature or being at the expense of nature.

Today, 80 % of our clothes are circular; by 2022 it should be 100 %. In nature, nothing is wasted. We see this as a role model for circularity. The idea is to keep the molecules in the circle, but when they happen to fall out and land in the ocean, in topsoil, or in a landfill they degrade into natural elements.

For us a systemic and science-based approach is key. This means to start where it is most important and not where it sounds best or is most convenient. And this provides amazing opportunities.



Can you give a few examples please?

We use polyester fibers that are circular in that they are made from recycled fibers and can be recycled again. In addition, we make garments from biological fibers that can either be recycled or put in the ground for composting. We never mix these two fibers so as to retain a natural or technological flow of how to reuse them.

There is an area where we are not part of the solution but we are working hard to get there: microplastics.



About 60 % of the material that our clothes worldwide are made of are synthetic fibers such as polyester, nylon, and acrylic. During production and when washed, these fabrics release microplastics into the environment.

Yes. In this field, we are working together with two fantastic American partners, Polartec – with whom we started working on engineering to eliminate microplastics – and Primaloft with whom we are looking at the polymer structure and add additives to polyester to understand how to make it degradable in the ocean.



What motivates you and your company to pioneer with sustainability?

Houdini started out from a passion for outdoor activities and for products that we use for outdoor life. With that comes, of course, a love of nature. It is common sense to protect what you care for.

We at Houdini are unique and not many companies – at least close to us in the industry – have a similar philosophy. But we think, it creates a lot of opportunities: We question conventions all the time. We constantly question our design, our systems, our products, our services, our way of communicating with our customers, everything. This makes us think from the resource perspective, and from the relationship with our customers’ perspective. And it makes us design things and processes in a smarter way, I would say.

Individuals coming into work every day hopefully feel proud of what they accomplish and happy with being a part of something that feels important not only profit wise, but for life.

And I am a mother. This is important and also motivates me a lot.



Do people like the idea of eatable garments? Or do you also get reactions like: “I am not going to eat this.”?

We get a lot of appreciation. However, part of the story is the surprise. We want to stretch our minds and show that there are amazing and endless possibilities of designing things in such smart ways.

Nature is an amazing, perfectly functioning system. What if we, smart humans, could design our systems as smartly as nature does. This would be a systemic approach. For us as a company, and I hope also for other companies, it is absolutely critical to understand the system as a whole and how it works. It is key to understand that every change you make will have an effect, not necessarily in that certain area, but on the system as a whole. Having that perspective is a challenge but also an opportunity, we found.

When we meet some suppliers and ask them what the source of their bio-based plastic is, often they do not know. They do not know where it is from, whether it is GMO, or if ecosystems might have been damaged, etc. There is clearly a lack of interest, curiosity, or knowledge to make good decisions.



So where do you get your ideas from?

From being part of an amazing team. And having fun. And having a very clear vision of where we are going. And partners that we can do this together with.



And these are partners from business or academia?

From business and academia: technology suppliers, somebody who works with plastic polymers in the US, or recycling technologies in Japan, for example. And we work with designers, creators, really a very diverse group of partners. By doing so, we make sure that we find the best brains out there that are also aligned with our vision and are bold enough to go ahead and explore.



Who do you partner with for the fiber composting project?

We are working with an organic garden in Stockholm. They compost and grow their own food for a café and a restaurant. They have such experience with composting in terms of texture and smell. These gardeners know exactly what a compost is supposed to be like.

If we come up with a new fabric, we want them to be involved in the testing of it. It is important to not use materials that contain toxic substances because they can destroy the process and make the compost material unusable. We make sure all materials are pure enough to become fertilizer and soil amendments.



Coming from a chemistry publication: How are chemists involved in your teams?

Within our team, we do not have a chemist. That meant that about ten years ago we became a system partner of the bluesign® value chain with brands that help the industry eliminate toxic chemicals. They are, for instance, working with more than 800 critical chemicals – REACH, I think is working with 80 substances of very high concern. They have amazing knowledge. They also have an input/output way of looking at things: This means to not only understand what goes out as wastewater or is within the product, but also what goes into the processes in a factory. They have been extremely helpful to us not only in terms of control but also in terms of direction and innovation.

In addition, there are chemists at every supplier partner. In our industry I think it is quite common that you work closely with tier-one suppliers and maybe tier two; we are working with tier one, two, three, and four. So we go pretty far back in the value chain. And that is where we also meet chemists.

Only in the last three years we have been approached more by actual chemical companies. Previously they were anonymous to us. We wanted to meet them, but they were so to say ‘behind the curtain’, out of reach. Now they are not. They are reaching out which is fantastic.



As a small company, how do you finance all of your developments?

We are a small company in one sense because we are a group of only 15 people working in Stockholm. We are in 18 markets and we are growing quite fast and have a turnover of 20 million EUR. Compared to our colleagues in the business, our resources are limited.

However, open-source innovation together with our partners has enabled us to do a lot of things. We share what we learn. We would never ask, for example, our fabric supplier, Polartec, for example, that developed Power Air, the microplastics free fleece material, for exclusivity but rather have them share the technology with others, also with our competitors.



You are producing products that can be recycled, reused, repaired. But looking from the environmental side, don’t we all have to consume less to make a real difference?
How would this then be compatible with the economy as it works today? In the end, you are a company that has to be profitable.

That is true. Definitely, the entire industry and the fast fashion industry will need to sell fewer garments. However, I wouldn’t say the economic system is designed properly for this. The only value we measure today is monetary value. We have to design a financial system that is more aligned with life that is worth living.

Changing the economic system is a matter of regulations and taxation. There have to be rules that if you pollute, you have to pay. If you compromise on social or ethical aspects, you have to pay. That is not the case now. But as soon as that is the case, it will be the only profitable way of doing business.

This will happen, I guess. Otherwise, things will not go well. Companies will have to change their business models radically. For this, I think the mindset is key, and then innovation and being creative enough to understand how we can do business in a much smarter way. We design our business that way and hope the legislation will follow.

We are seeing some change in legislation in Sweden in terms of chemicals use and I hope this is only the start and that we will see a shift towards legislation where the good alternative and high-impact alternatives pace their own costs in terms of environmental contractions. But anyhow, we are profitable and do great.



But your costs are higher?

The costs when making no compromises on the fibers are about 400 % higher. So, our margins are lower. But that is because it is too cheap with the current legislation to do the wrong thing, to use virgin fibers, for example.

There are areas where we today are more profitable. For instance, with our “product as a service” solution. Renting a product can provide us with a higher margin than just selling it once.

Many customers value what we are doing. The demand and the in-depth questions from customers are increasing at such a rate that I think we should start asking: Can we be profitable if we don’t work on sustainability issues?

I would say, we are moving from a transactional economy – where you as a customer and I as a brand are more or less anonymous to each other – to a relations economy – where you rent or subscribe from me and we have a continuous relationship. This provides many advantages.

We can prove that this works, but we are a small and very niche company. We can go global and still stay niche. IKEA is an example of the complete opposite. They are ambitious, they are creative enough to understand how to change business models and become a company that is contributing to the environment and human health.

If a company does not find a way to be part of something larger than itself, then they should probably think about creating a new company.



Can you say a few words about your career path?

Houdini was a start-up when I joined in 2001. I had been in the industry I guess ten more years with fantastic companies. But I had never experienced a working environment where there is no compromise: This is a luxury every day.



Thank you for the interview.

Eva Karlsson joined Houdini Sportswear AB, Nacka, Sweden, in 2001.

Eva Karlsson has received numerous awards for her and her company’s sustainability activities. These include the 2018 NMC Award for Sustainable Leadership, the 2012 Swedbank’s Sustainability Award, and the 2010 CNBC Europe’s 25 Most Innovative Companies award. In 2011, she was named Woman of the Year in the Sports Industry by the Svenskt Sportforum.


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