Patagonia's Journey to Sustainability
The legendary outdoor apparel maker wants to lead the business world to sustainability, even as it strives to do so internally. On that quest, the company has learned some Zen-like lessons, not the least of which is, always be true to your mission, and the journey can bring great rewards. By Richard Fleming.
Patagonia Inc. is out to make money. The outdoor gear and apparel maker also is out to save the planet. In fact, Patagonia plans to save the planet by making money.
“The bottom line is that we’re using business to implement change,” says CEO Michael Crooke. “We do that by being successful. The more profitable we are, the more money we can put into the environment, and the more inspiration we can create in the business community at large. And that’s what it’s all about.”
Ventura-Calif.-based Patagonia’s stated corporate purpose is a lofty one: “To use business to inspire and implement solutions to the environmental crisis.” Transferring that sweeping tenet to the everyday nuts-and-bolts process of running a company isn’t difficult, Crooke maintains. “This is a company founded with the heritage of looking at all aspects of how its products affect the earth. Our environmental commitment started in 1957 when an 18-year-old came up with a better piton. So it’s not difficult to have a company that comes from that tradition where every aspect of a business decision is weighed environmentally.”
That 18-year-old was Yvon Chouinard, a climber and surfer who, along with partner Tom Frost, began hand-forging pitons that could be pounded and removed with minimal scarring of rock routes, unlike other pitons of the day. The two young entrepreneurs founded Chouinard Equipment, a climbing-gear company that would later help usher in a revolution of “clean” rock climbing in the U.S. by popularizing chocks and stoppers, protection that could be placed and removed by hand, an environmentally superior innovation that would supplant pitons for most climbing situations.
The shift from pitons to chocks in 1970 was potentially life threatening to the young company, whose business was built on piton making. But it was the kind of decision it would become known for: one made out of passion for the natural world.
“Yvon’s company has been adamantly activist environmentally from the very beginning, and he’s never softened that. I admire him for it,” says Royal Robbins, co-founder of the Modesto, Calif.-based outdoor clothing company that bears his name. With two other climbers, Robbins and Chouinard made climbing history with a first ascent of the massive North American Wall on El Capitan in 1964. “Yvon is a gifted athlete and a far better climber than me,” says Robbins. “But his real strength was his vision. He could pick out elegant routes that others couldn’t see. He was a visionary as a climber and he’s been a visionary in business as well.”
Companies such as Robbins’ in turn have played a role in helping Patagonia accomplish its stated purpose of inspiring change. “Patagonia has been a model for our business in terms of standing for certain things,” says Robbins. “Patagonia started donating 10 percent of its net profits to environmental groups and causes. We picked up on that because it’s a good idea.”
In the last fiscal year, Patagonia donated $1.75 million in cash and services. Since 1985, the company’s self-imposed “earth tax,” which includes noncash donations, has totaled some $17 million.
As with the rock-friendly chocks and stoppers sold by its corporate forerunner, Patagonia has pushed the technical envelope to develop environmentally responsible gear and apparel. Besides making clothes that hold up under rough wear, Patagonia brought products such as synthetic fleece sweaters -- once used only by North Atlantic fishermen -- to the outdoor recreation world, refining the water-repellant, insulating fabric through evolutions such as Bunting and Synchilla, the latter of which is spun from the plastic of recycled pop bottles. In the 1980s, the company also introduced moisture-wicking polypropylene underwear, improving on it with a fabric called Capilene. Other years brought other innovations: SealCoat rainwear, the Super Pluma Jacket, Pneumatic fabrics, and the list goes on, a virtual hall-of-fame of apparel milestones in the outdoor industry.
By the mid-‘80s, sales were exploding, growing at a rate of 40 percent annually. With the company’s cotton Baggies shorts leading the way, mainstream customers were discovering Patagonia goods. President George Bush (the first) appeared on the cover of People in a Synchilla jacket. The company diversified, spinning off product lines for paddling and surfing. Its first retail store was opened in San Francisco, followed by stores in Salt Lake City, Seattle, Santa Barbara, Calif., Chamonix, France, and Tokyo. The business that had been started by a teenager with a blacksmith forge in Ventura, Calif., was on track to become a billion dollar company.
Then an odd thing happened. The businessman turned his back on the money. “So here I was with the prospect of owning a billion-dollar company someday, with thousands of employees, making outdoor lights and clothing for ‘posers,’” Chouinard recounted in a 1999 speech to the Michigan Land Use Institute. “I decided to do some soul-searching.”
Patagonia would grow only at a rate that allowed the company to sustain itself for 100 years, he decided. The company winnowed its roster of products from 900 to 650. A top-to-bottom analysis of how to lessen the company’s environmental impact was instituted. Patagonia catalogs, already known for tributes to nature and outdoor adventure, began campaigning to save old-growth forests and free-flowing rivers.
In 1996, Patagonia switched from using standard industrial cotton to 100 percent-organic cotton. It was no easy process. The company devoted a year to educating its employees about the decision in order to get their buy-in. “It changed the way we did business and had an impact on every job in the company -- in a very exciting way,” says Jil Zilligen, VP for Environmental Initiatives. “It brought people together to figure out how to do business in this new way.”
Patagonia’s effort to become sustainable continually presents challenges. “Nobody really knows how to become sustainable -- it’s never been done before,” Zilligen points out. “In the past we have gone through environmental analysis of each and every product. Now we take more of a bottom-up approach, for example, educating designers to put good environmental decision-making into the product from the beginning.”
On the scope: a substitute for petrochemical fibers used in skiwear and rainwear. According to Crooke, Patagonia aims to develop within five years products manufactured from plant-based materials.
And although the process has its frustrations, progress is steady. “We just finished our most successful year in our history, in all respects -- profits, revenues, the environment,” Crooke says.
Making consumers aware of environmental issues is crucial to the company’s mission, he adds. “Fifty percent of the content of our catalogs is used for selling the story of the environment. The message is in every retail store; it’s on our website; it’s in everything we do. At least 25 percent of our advertising in mainstream publications is focused on the environment.”
True to its informal roots, Patagonia does its best to shun advertising. “We don’t advertise as much as other companies our size,” says Crooke. “We like our actions to speak louder than words. We believe that when dams come down and forests are saved, the consumer knows Patagonia was there. Cultural Creatives know what’s going on in the world. We don’t have to advertise to tell them about us.”
If anything, Patagonia has proven that the interplay between business and the environment is a profitable one. “Each time we’ve done something for the environment, we’ve become a more successful business,” says Zilligen.
Richard Fleming is a staff writer with Natural Business LOHAS Journal, a GreenBiz News Affiliate. The piece, reprinted from LOHAS Journal's July/August 2001 issue, appears by permssion.