Nike, one of the world’s largest sportswear companies, has just announced plans to set-up a new venture capital arm to promote green technology and renewable energy. The new venture capital offshoot will be called the Sustainable Business & Innovation Lab, and it will seek out opportunities to invest in the new generation of green-technology.
Upon first glance, it would seem unorthodox for a sportswear company to invest in green tech startups. After all, investing in green tech startups can be a risky business – for instance, the high-profile solar panel manufacturing company Solyndra just filed for bankruptcy.
Could Nike be doing this simply to improve its public image?
In fact, Nike’s sees its new venture capital arm as a strategic way of increasing its profit margins.
In particular, the majority of its investment capital will be devoted to green businesses focused on renewable energy and more efficient manufacturing processes. It views these investments as a smart way to cut costs and embrace cheaper ways of manufacturing its products in a volatile global economy.
Its investment portfolio will consist of two types of investments:
- Closed Loop Production – shifting towards zero-waste production cycles
- Activating the Inactive – Encouraging people to adopt healthier, more sustainable lifestyles
Although the specific dollar amounts for its venture capital investment are still under discussion, it has already hired a number of venture capital investment professionals such as Avi Sahi, former VP at Perseus, and John Hull, former managing director at Marquam Hill Capital.
What do you think of Nike’s new green venture capital arm? Do you think that it will encourage other consumer goods manufacturers to set up their own green venture capital offshoots?
Feature image: The Nike Trash Talk was the first performance basketball shoe made from manufacturing waste.