Walmart’s latest environmental report confirms what it warned of in December: the world’s largest retailer won’t meet its 2025 goal to cut the carbon footprint from its retail operations and energy consumption by 35 percent and looks unlikely to meet its pledge for a 65 percent reduction by 2030. 

Yet, in its ESG report published Sept. 8, the company’s chief sustainability officer characterizes progress toward Walmart’s goal of reaching zero emissions by 2040 as “meaningful.” Why the optimism? Here are three highlights.

A big emissions intensity reduction

Walmart logged a 1.1 percent year-over-year increase in 2024 for its Scope 1 and 2 emissions to 15.7 million metric tons of greenhouse gases. On the bright side, the Bentonville, Arkansas, company has reduced that footprint cumulatively by 18.1 percent since 2015 — short of where it should be, but a significant cut from where it started. 

“Progress isn’t always linear, especially for some of the longer-term goals that require partnerships across sectors, industries, communities and among different groups that have very different views about how to achieve outcomes,” said Kathleen McLaughlin, executive vice president and chief sustainability officer at Walmart.

That’s why another data point, emissions intensity, is an important “companion metric,” she said. It measures the ratio of operational emissions per million dollars of revenue, offering a different context for investors. Walmart has cut its emissions intensity by 47.4 percent over the past 10 years, while growing revenue roughly 40 percent to $684 billion. Emissions intensity decreased 3.7 percent for 2024

It’s easier for a company losing market share to cut its footprint than for one meeting its business growth objectives to do the same. “I think it’s important to consider that every banana we ship, every toaster that you buy from Walmart, the emissions footprint at that level is coming down,” McLaughlin said.

Walmart also studies this metric for its much larger Scope 3 footprint, which reached an estimated 636.6 million metric tons in 2024. For that emissions category, intensity has been reduced 6.2 percent since 2022.

A clear rationale for short-term increases

Walmart’s decision to in-source more of its fleet operations two years ago resulted in a 19.6 percent increase in transportation-related emissions. That strategic shift was necessary to support growth in Walmart’s e-commerce business and will yield more efficiencies over time; in effect, those emissions were transferred from Scope 3, so that Walmart can influence them more directly. 

For the next few years, that number is likely to keep increasing, as Walmart navigates investments for both last-mile and long-haul delivery methods. The three biggest contributors to address: Class 8 tractor trailers, refrigerated trucks and warehouse vehicles.

Walmart is piloting alternative technologies, including heavy-duty electric vehicles and forklifts that run on hydrogen fuel cells, and it opened a renewable hydrogen fuel plant in Latin America.

A strong link to stakeholder value

The Sustainability section of Walmart’s 113-page report, which starts on page 25, deliberately links its climate goals — including those for water stewardship, sourcing and energy — to business value creation.  

“Talk about your strategies in a way that helps people understand why you’re pursuing topics, why you’re pursuing strategies, why it’s good for your business, as well as for stakeholders,” McLaughlin said. “As you know, sometimes different stakeholders will have different views about issues or different language that they use, take time to understand that.”  

One example is how Walmart is handling the overhaul of the refrigerants used to keep its products and buildings cool, which accounted for 57 percent of its Scope 1 footprint in 2024. That was a 2.4 percent decrease over the previous year, due to ongoing investments that were built into the company’s financial models and capital allocations.

All Walmart stores in the U.S., for example, undergo preventive maintenance and the company has hired more than 600 refrigeration technicians. When stores are updated or new locations built, Walmart requires the installation of cooling systems with lower global warming potential where commercially possible. So far, about 410 U.S facilities have been updated; as of August, Walmart had slightly less than 4,600 locations.

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The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Corporate profiles in Trellis’ Chasing Net Zero series are raising useful questions about the strengths and gaps of corporate net-zero progress — questions that advocates must continue to wrestle with during this “period of reckoning” for climate action. As the series continues, it’s important for the analysis to highlight a critical question too often overlooked by similar efforts: are companies actually ready to pay for the transition to net zero? 

If we want to accelerate progress over the next five years to reach the 45 percent reduction goal, now is the time to seek crucial data about corporate funding for the climate transition. Without this data, climate ambitions will continue to masquerade as real action and we can give up our hopes of 1.5 degree Celsius-aligned decarbonization.

The persistent blind spot in net-zero accountability

For more than a quarter century, voluntary and compliance reporting frameworks have urged companies to provide information about their sustainability actions, environmental risks and GHG emissions. The Global Reporting Initiative and Carbon Disclosure Project launched with a focus on current performance and future exposure of the world’s biggest companies. Under the Science-Based Targets framework, thousands of companies have declared their forward-looking climate intentions. The EU recently adopted the CSRD rules to mandate more thorough sustainability reporting. (The U.S. Securities and Exchange Commission attempted to follow suit, but failed.)

All the while, global GHG emissions remain stubbornly high, telling us that it’s not enough to hold a mirror to a company’s actions. Disclosure efforts have been good at pushing for the now and what could be, but far less effective at pushing for the how of the net-zero transition.

Seeking to rectify this, several years ago a group called the Transition Plan Taskforce took up the challenge of defining clearer expectations for climate reporting. The taskforce’s work echoed principles that NGOs and government bodies have said is fundamental to climate action.

These various transparency movements improve accountability (and keep sustainability people very busy). But they don’t do enough, because there remains an urgent need to close the climate mitigation finance gap, a point noted by multiple global advocates. Data sharing, targets and pledges cannot be the highest-ranking mark of ambition because promises and pledges don’t signal concrete progress. These days, real climate leadership involves budgets.

Actions without budget details

It’s time to reckon with the climate finance gap by directly asking what role companies will play in closing it. In 2024, The Change Climate Project worked with stakeholders to improve our climate certification so that it would address the question of funding. We decided to make a “climate transition budget” the central accountability threshold. The budget is determined by annual emissions and a per-tonne carbon price.

This is not common practice. We recently reviewed the sustainability reports of 30 companies with strong reputations for sustainability – including the likes of Microsoft, L’Oreal, Crocs, Chobani and Navitas Organics. Of those, only eight reports offered enough information to weigh transition funding against annual emissions. “Enough” information included — at a minimum — summary-level disclosure of investment amounts, along with a comprehensive GHG inventory, including Scope 3 emissions.

On the whole, most companies in our sample did a good job of describing their top sustainability actions, which included shifting to renewable energy, improving energy efficiency, adopting sustainable materials and redesigning packaging.

But lists alone aren’t enough to gauge whether the company is good at decarbonization or marketing. In 22 of the reports, either the money or the tonnes were missing. Or both. Without this data, it’s impossible to tell if a company’s investments are proportionate to their emissions.

For the eight companies, transition funding amounts ranged from 10 cents to $53 per tonne of emissions. One company, IKEA, reported funding of $33 per tonne. Their $9 billion — $5 billion spent, with $4 billion more to follow — was also covered by the Trellis analysis, and is the kind of funding that has the potential to move the needle. Conversely, the Trellis analysis of Nestlé gave a different take: the company “did not share the amount it expects to invest in order to hit its 2030 target.”

Recognizing the hurdles

As the vast majority of companies globally continue to fall significantly short of their net-zero targets, it’s time for clearly-revealed transition funding to be added as the third leg of the net-zero stool — right alongside targets and plans.

To get there, we should ask why, in a majority of cases, companies don’t make it easy to parse their climate transition investments. Is it too hard to categorize investments? Perhaps, but businesses do a fine job of communicating complex financial information to shareholders on their earnings calls. 

Are transparency advocates afraid to put the emphasis on funding, because it acknowledges that the climate transition isn’t free? Perhaps, but there is also plenty of money to be made and saved from climate initiatives.

Or are we scared to push too hard? Advocates work tirelessly to squeeze incremental progress from companies, so maybe there’s a fear of losing our fragile hold on corporate attention if the push for climate transition funding data turns out to be a bridge too far.

Sustainability practitioners now face existential questions and the need to become smarter and more effective. Better practices around documenting and disclosing climate transition funding could help. The process of detailing climate projects allows companies, often for the first time, to view transition funding through an “all of the above” lens.

Many companies now are deciding whether and how to include market instruments in their strategies. As noted by MSCI, carbon trading is expected to play an “increasingly pivotal role in transition finance.” A transition funding approach gives companies a way to see beyond rigid “mitigation hierarchies” to focus on the important thing: getting climate finance flowing. The practice also complements the use of internal carbon fees by creating a dollar-per-tonne through-line that starts with residual emissions and extends through to all mitigation projects.

A new chapter for accountability

There’s much room for net-zero accountability evaluation efforts by analysts, standards bodies and corporate buyers to improve by adding transition funding to their criteria. This would raise the quality of insights from efforts ranging from the Net Zero Tracker to Amazon’s Climate Pledge Friendly program. To decide what to include in the assessment, there’s plenty of good guidance to pull from in the pages of lesser-known mitigation finance tracking initiatives, existing CSRD rules and The Climate Label’s Standard.

In this period of reckoning we must make clear that ultimately, companies need to focus on closing the climate finance gap. The best way to tell how seriously a company is pursuing its climate initiatives is to look at transition funding data in simple, understandable terms that enable quick analysis. After all, money often talks louder. 

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The demand is straightforward, if not simple: To slow climate change, stop funding fossil fuels now, not decades from now.

That’s what the International Energy Agency said in May 2021, only a month after 43 banks launched the Net Zero Banking Alliance (NZBA). To some, the group’s formation, amid a flurry of related new alliances, offered hope that big banks were throwing their weight behind decarbonization in line with the Paris Agreement.

After all, the financial sector is arguably the root of all climate change. Businesses, which pollute at scale, can’t operate without institutional shareholders and financiers.

Yet four years and five months after its inception, the NZBA has frozen its activities and banks are keeping more fossil fuels in their portfolios than they did in each of the previous two years. Nevertheless, financial institutions continue to share their net zero-aligned intentions.

Where does this leave the movement to shift to a low-carbon global economy?

“What worries me is that I think there is a higher probability of zombie targets,” said Todd Cort, a senior lecturer in sustainability at the Yale School of Management. “They’re not living, because banks are not actively trying to push progress in the absence of outside pressure. But they’re not dead, because they still sit on the books. The downside is that we cannot afford to slow progress on climate. If there’s any upside, it’s that re-engaging with net zero will be easier if the target was never officially dismissed.”

The timeline

On August 27, the United Nations-backed NZBA announced that it was pausing its operations, with members voting by the end of September on whether to become a guidance-only initiative. Whatever the result, critics argue that the NZBA had already slipped into irrelevance.

Twenty banks have fled the NZBA since December, kicked off by the U.S. “big six:” Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley and JPMorgan Chase.

This past April, most remaining NZBA members voted to remove its Paris Agreement alignment. Only Triodos Bank left in protest over the thinned-out goals. 

At the same time, however, all NZBA banks have kept their net zero targets. Just this week, Deutsche Bank issued its latest net zero transition plan. Even all of the exiting member banks, except Wells Fargo, appear to be maintaining net zero pledges, albeit with little in common. (That was partly the result of a March 2024 guideline favoring independent targets.)

Political pressures

Environmentalists have blasted banks for bowing to right-wing political pressure as they fled the NZBA.

In June 2024, for example, U.S. House Republicans railed against a “decarbonization collusion in ESG investing.” By the end of the year, Goldman Sachs, Wells Fargo, Citibank and Bank of America announced their NZBA exits. 

This past January, as President Donald Trump brought an anti-ESG rampage with his return to the White House, Texas Attorney General Ken Paxton cited U.S. banks’ NZBA departures when he threatened them over their ESG commitments. 

More recently, on July 22 the Science-Based Targets initiative (SBTi) said that it would no longer validate the emissions targets of financial companies that fund new oil, gas or coal projects. On Aug. 8, an unusual letter followed by the attorneys general of 23 states, who charged the SBTi with violating antitrust laws.

However, there’s no consensus that political threats caused banks to change their minds about advancing climate plans, at least on paper.

Fossil fuel financing by the 65 largest banks ticked upward to $868.8 billion after declining for two years following the NZBA’s formation, according to the Banking on Climate Chaos Report. The total was $922 billion in 2021, with a low of $706.9 billion in 2023.

Political cover for low ambitions?

“In our view, the political context in the U.S. was only a pretense that banks used to leave the NZBA,” said Quentin Aubineau, policy analyst on the banks and climate campaign at BankTrack, a Netherlands nonprofit that contributed to the “climate chaos” report. After all, the first banks to check out of the NZBA were also among the biggest fossil fuel financiers since 2021, he added.

“Banks want the best of both worlds,” said Abineau. “On one side, they want to be seen as climate leaders that are aligned with international climate goals. On the other side, they do not want to give up on short-term benefits and cut ties with their carbon-intensive clients, even if these clients are developing new fossil fuel projects that are incompatible with long-term climate goals.”

Barclays, the latest NZBA exile on Aug. 1, boasted that it generated roughly $675 million “in revenues from sustainable and transition-related activity” in 2024. Yet it also invested $35 billion in fossil fuels, a four-year high.

For Saskia Straub, climate policy analyst at the New Climate Institute of Cologne, Germany, political headwinds catalyzed NZBA departures but also exposed the low integrity of many bank targets. They have been “plagued by loopholes,” she said.

“This raises questions about whether the initial commitments were driven more by a desire to follow trends and manage public relations than by a genuine intent to decarbonize” Straub added.

What should banks do?

“Our research suggests that instead of focusing on long-term targets, financial institutions can have an impact by dedicating their resources to engaging their investees and directing finance to achieve real-world decarbonization in the short term,” Straub said, citing her organization’s Aug. 26 report, “Fixing the Broken Governance Chain.”

It encourages banks to set consequences for their funding recipients’ high-emissions actions. Banks can also channel capital into activities that support a low-carbon economy, Straub added.

NGOs including BankTrack, ShareAction and the Sierra Club call for regulators to step in to cement climate progress where optional collaborations are failing. 

“Voluntary commitment frameworks like NZBA can be effective, but they only work if backed by enforceable rules,” said the Sierra Club’s Sustainable Finance Campaign Advisor Jessye Waxman.

Most of all, banks need to own their culpability for fueling emissions, whether by directly financing fossil fuel projects or by including oil, gas and coal in their investment portfolios, according to Aubineau.

Investor pressures

Beyond threats by politicians, activists have mounted hundreds of protests against banks propping up fossil fuels over the past year. Wells Fargo, the only NZBA bank to ditch its net zero pretenses entirely, has taken much of the ire in multiple U.S. cities this summer.

From London, Louise Marfany, director of financial sector standards at NGO ShareAction, warned that many investors will not tolerate backsliding from banks on their commitments to reduce their financing of high-emitting activities.

Case in point: PFZW, one of Europe’s largest pension funds said on Sept. 3 that it was yanking nearly $7 billion in holdings from BlackRock due to its lack of support for climate action.

“Banks that attempt to roll back on the vital commitments they have made to safeguard people and planet should expect significant pushback,” Marfany said.

The post With a key alliance in limbo, banks are risking ‘zombie’ net-zero targets appeared first on Trellis.

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

At the federal level, if environmental regulations are going anywhere right now, they’re going away. At the same time, seven states are completely overhauling the $107 billion industry that determines how the world’s largest economy packages its goods. And they’re doing it via a policy most consumers have never heard of: Extended Producer Responsibility. 

Extended Producer Responsibility (EPR) is a type of policy that applies the “polluter pays” principle to packaging. In other words, those who pollute are held responsible for their actions — such as companies paying fines for emissions under the Clean Air Act.

With EPR laws, the polluter pays principle applies to product packaging materials we use every day, from cereal boxes to subscription box containers. In passing these laws, states are tackling waste upstream and downstream: EPR should shift the financial responsibility of recycling and waste management from taxpayers onto producers, and it should incentivize companies to develop more recyclable, refillable or compostable packaging by levying higher fees on packaging that’s less environmentally friendly.

For the optimists in sustainability and packaging, EPR might feel like the only path forward. It promises a more circular system where product and packaging producers fund everything from consumer education to curbside recycling collection — and no doubt, the potential is there. But to achieve this potential, EPR stakeholders need to overcome the pitfalls behind three promises:

1. EPR will improve recycling infrastructure — if it’s done correctly 

EPR laws promise to generate funds that modernize and expand recycling systems to help ensure the materials you’re putting in your recycling bin actually get recycled.

But here’s the reality check: Building better infrastructure isn’t just about funding — it’s about making calculated and appropriate investments. The industry can do that by using existing infrastructure first, because building something such as a new Material Recovery Facility can cost upwards of $65 million. Plus, disrupted supply chains, lengthy permitting processes, community planning and stakeholder engagement all require time and trust that cannot be rushed. 

Moving forward, smart EPR implementation will build on what’s working — such as Oregon’s EPR plan that has begun funding new facility upgrades at material recovery facilities and purchasing new trucks — and fill in gaps across recycling systems rather than start from scratch.

2. EPR will incentivize better packaging design — but it’ll take time

Because EPR will make companies pay fees based on how difficult it is to manage their packaging once it’s been used, the policy’s greatest promise is creating financial incentives to design packaging that’s easier to recycle, uses fewer materials or eliminates problematic components altogether. 

Under EPR, market forces should drive more environmentally friendly design choices. In reality though, design innovations take time — especially for complex product and package combinations. 

Reworking a packaging’s design is highly technical. It requires a significant investment to develop a package from R&D to product distribution that can take up to 10 years. And for complex food or pharmaceutical products, a company can’t simply swap paper in for plastic overnight. The intersection of safety, compliance and recyclability creates time-intensive, complex design puzzles. 

Swaps for more sustainable options — such as Graza Olive Oil using recyclable aluminum cans instead of single-use plastic pouches — can be exciting beacons of change. The key moving forward will be managing expectations: EPR fees will drive packaging innovation, but the timeline will vary drastically depending on the product category and its complexity.

3. EPR will include more stakeholders — which means more cooks in the kitchen

Across the U.S., state municipalities are tasked with waste and recycling management, which means local governments are at the center of these systems. EPR laws, however, force a big tent. They require the cooperation of a broad coalition of stakeholders composed of local recyclers, lawmakers, producers and other actors. 

Ideally, as the proverbial table grows, so does our collective ability to improve the system. This is why legislators have passed EPR — to involve producers and make them “responsible” for their packaging. But for a state such as California, with an economy larger than most countries, this requires a disparate group of stakeholders to reach a consensus on EPR implementation. 

To advance impactful implementation, states can standardize their EPR laws. Harmonizing key elements such as how a state defines a “producer” or how it determines which materials will be regulated can ease cross-state compliance. And we’re already seeing how this potential can play out: In Maine, the first state to pass EPR, lawmakers recently standardized their law with other states’ EPR laws to bring consistency across definitions. 

The rubber is meeting the road now

EPR laws have tremendous potential. They could completely overhaul our nation’s relationship to waste and recycling — but right now, we should moderate those hopes. The policy’s full impact hinges on its stakeholders’ ability to strategically invest in waste and recycling systems, quickly implement better packaging design and ensure that stakeholders from consumer groups to Fortune 500 companies are on board for the changes in store. 

Right now, the world is watching as the first states roll out their EPR laws. The results will offer a critical window into whether the nation is ready to embrace a truly circular future. It’s time to stay tuned. 

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Leather seats epitomize luxury and comfort for many high-end auto enthusiasts. However revered, though, leather is a co-product of the meat industry, which is among the most carbon-polluting on the planet.

That’s one reason high-end automakers with decarbonization ambitions — including Mercedes-Benz, General Motors and BMW — have backed the development of animal-free alternatives for vehicle interiors.

Mercedes is the latest brand to collaborate on a substitute to traditional leather. In June, it announced its co-development, with startup Modern Meadow, on a plant and recycled-tire-based biomaterial for the seats of its Concept AMG GT XX sports car.

The Labfiber materials, including seats mimicking full-grain Nappa leather, is based on Modern Meadow’s Innovera product, “setting new standards in vehicle interiors,” according to Eileen Böhme, Mercedes-Benz’s director of innovations and future technologies. “By combining recycled rubber, plant proteins and biopolymers, it not only offers the same design freedom as conventional leather but also reflects the company’s sustainable strategy. We are driving innovation across the value chain, from materials to mobility.”

Modern Meadow’s early lifecycle analysis calculated Innovera’s equivalent carbon dioxide footprint at about 7 kilograms per square meter, roughly one third of the nonprofit Leather Working Group’s estimate for cow leather.

Innovera offers the durability, flexibility and tear-resistance of leather, according to Modern Meadow. “Auto seating is a bit of a holy grail application,” said the company’s CEO David Williamson. “If you’ve got a material that can work in that space, you’ve got a remarkably high-performing material.”

Market for leather and alt leather

The $37 billion market for bovine automotive leather shows no signs of slowing down, with projections of growth to $68.4 billion by 2033, according to Grand View Research.

Yet in addition to tooting out methane, livestock occupy vast swaths of land, which have wiped out valuable rainforests and grasslands. Farming and slaughtering make up 68 percent of the hides’ global warming potential, according to Leather Working Group. Tanning and finishing pile on additional impacts, leading to livestock’s contribution of 6 percent of overall greenhouse gas pollution in 2023, according to the United Nations.

A $12.5 billion synthetic leather market will reach $20.8 billion by 2033, according to research by DataDynamics.

How Innovera is made

Modern Meadow’s material originates with chemicals giant BASF, which turns old rubber tires into nylon fiber. Modern Meadow then uses the nonwoven material as a “scaffold” on which to add its Bio-Alloy. The Nutley, New Jersey, company’s biobased polyurethane uses waste from corn and rapeseed oil and soy farming. 

The startup produces thousands of square meters per day of “dry white” material, which it sends to tanneries around the world for processing. 

“When people walk into this room they say, ‘It smells like leather,’” Williamson said of Innovera. “That’s because it goes through the same process. It has all the same biological functionality that we attribute to leather, because of the plant protein functionality that we introduce into it. It’s why it dyes like leather, breathes like leather, processes like leather and ages like leather.”

Innovera can be used in aerospace, mass transportation, footwear, furniture, apparel and even electronics accessories, according to Williamson. He believes the company, which has raised $183.6 million, can churn out 500,000 square meters of it per year.

“We feel like we’re at a place, with Mercedes, to deliver that material for some super-demanding applications,” he said.

In addition, Innovera is “ready for circularity,” according to Williamson. “We can strip it back off the car, do some things to it, return it back to BASF, and it’s ready to have a new life. Sustainability is not required to drive adoption, but it certainly helps.”

Other animal-free interiors

Among auto brands, Volvo has been ahead of the curve. Four years ago, the Swedish company announced that its new seating material, Nordico, would serve a goal of recycled or biobased materials in one-quarter of new cars by 2025. By 2030, Nordico is likely to feature prominently in Volvo’s target of 100 percent leather-free and electric vehicles. 

The material features recycled polyethylene terephthalate (PET) bottles, a practice that circular economy watchdogs criticize for taking material from closed-loop, bottle-to-bottle recycling. Nordico also uses recycled wine corks and “bio-attributed” material from Nordic forests. 

General Motors’ Cadillac has pursued leather with neither livestock nor petrochemical origins. GM Ventures in 2022 invested in MycoWorks, a mycelium material then making its debut beyond fashion. The automaker featured the San Francisco startup’s Fine Mycelium technology in the concept Cadillac Sollei EV.

Four years ago, GM had set goals to reduce Scopes 1 and 2 emissions by 72 percent by 2035 compared with 2018, and Scope 3 emissions by 51 percent per kilometer per vehicle. However, the company did not submit those goals in time for validation by the Science-Based Targets initiative (SBTi).

For others, the alternative to virgin leather is recycled leather. Alongside Coach parent Tapestry and Dr Martens, Jaguar Land Rover’s venture arm in 2023 invested $18 million in startup Gen Phoenix, which upcycles tannery waste.

Fits and starts

It hasn’t been a smooth path for animal- and plastic-free seating within cutting-edge car designs. 

In 2021, BMW iVentures threw its backing behind Natural Fiber Welding, a Peoria, Illinois, startup brewing plastic-free, leather-like Mirum from plants. The undisclosed investment explicitly served the German automaker’s science-based goals for 2030, validated by the SBTi. These include reducing emissions per vehicle for Scopes 1 and 2 by 80 percent and by at least 33 percent across all scopes per vehicle.

Although Natural Fiber Welding has raised $224 million, the decade-old company recently endured its third round of layoffs in three years.

In another failed promise, in 2022 Mercedes-Benz’s Vision EQXX featured mycelium-based Mylo “leather” material. “Working with these innovative, sustainable materials to design the interior of the VISION EQXX was a hugely liberating and exhilarating experience,” chief design officer Gorden Wagener said at the time. But the high was short-lived. Bolt Threads, which produced Mylo, discontinued it one year later to focus on developing vegan “silk.”

That failure reset industry expectations, as did the slow progress from companies such as Ecovative and SQIM, according to Lux Research Analyst Tiffany Hua. “It also points out how hard it is to move from pilot-stage innovation to commercial-scale production,” she said.

“For higher-performance use cases there are additional requirements where extra binders, coatings or backing materials are often needed,” said Hua. Therefore, surface treatments and tanning processes address the shortcomings in strength, flex resistance and durability.

“Most developers I’ve spoken with rely heavily on co-development partnerships with OEMs and brand partners to get anywhere close to meeting performance benchmarks,” Hua noted. 

For now, then, the potential for mycelium-based materials remains in the premium and luxury markets, she added.

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