REI's Jewell: An Active and Activist CEO

REI's Jewell: An Active and Activist CEO

Sally Jewell, the president and CEO of REI, arrived for our dinner toting a backpack and water bottle, talking up the importance of America’s national parks and admitting that her company, which sells outdoor gear and apparel, is a long way from being sustainable—though not for lack of trying.

REI is installing solar panels on some stores, retrofitting others to save energy and reducing its carbon footprint in absolute as well as relative terms. Still, its overall impact is not entirely benign. “Our customers jump in their SUVs and drive to the mountains,” Jewell says, ruefully.

Jewell is not your typical CEO. Then again, REI, the nation’s largest consumer cooperative, which is owned by its 3.7 million members, is not your typical company. They seem to be a good fit.

Jewell, who is 53, is active and an activist. She was in Washington (where we ate at Ten Penh) for a meeting of the Initiative for Global Development, a business-backed nonprofit that tries to use the power of business to fight global poverty. She’s a board member of the National Parks Conservation Association, which works to preserve our national parks for future generations. (Years of neglect have taken a toll.) She loves the outdoors, spending weekends and vacations hiking, camping, boating, skiing and snowboarding in her home state of Washington and around the world. “There is nothing like a taste of nature to nurture the soul,” Jewell says.

Of course, Jewell spends most of her time guiding REI, which had $1.4 billion in revenues in 2008 and, like most retailers, is struggling to adjust to the recession. The company eliminated about 60 jobs last year. Fortunately, because it’s a co-op, Jewell can focus on building REI for the long term instead of worrying about day-to-day stock-price fluctuations. “There are not analysts beating our door down saying, why aren’t you growing,” she says.

The company, which is based outside of Seattle, was profitable last year ($73 million in operating income), and expects to make money again in 2009. Profits are shared among employees, who get end-of-year bonuses in good times, and customers, who get annual rebates based on how much they spend.  The Environmental Defense Fund recognized REI, which has about 105 stores, for its work retrofitting stores in its 2009 Innovations Review, which I helped write. Here’s a brief story about REI and an interview I did with REI’s manager of corporate responsibility, Kevin Hagen.

Jewell took a roundabout route to REI. Trained as a mechanical engineer, she worked for ExxonMobil after college, joined a Seattle bank as an energy analyst in the early 1980s, became president of a small bank and then a senior executive at Washington Mutual, one of the go-go financial institutions that came crashing down last fall. (It’s now part of J.P. Morgan Chase.) She joined REI’s board in 1996, became its chief operating officer in 200 , and was named CEO in 2005.

She has known about the company since she was a kid. Her father, a doctor and a British immigrant, was an early member, and her family took lots of camping trips when she was young. Jewell climbed 14,410-foot Mount Rainier for the first but not the last time when she was 16. It’s a strenuous three-day hike.

Here are a few highlights from our conversation:

On green products. The backpack that Jewell was carrying is an REI product called the Acumen, made from, among other things, 44 recycled plastic water bottles. But Jewell was quick to note that until the company can do a more sophisticated life cycle analysis of its products, it can’t really tell which ones have more or less impact. A group of companies in the outdoor industry, including Patagonia, Timberland and North Face, are working together to develop a credible index for products. I’m hearing more and more about companies that are taking seriously the need to analyze products and develop credible, green metrics.

“Customers are going to hold us to higher and higher standards,” Jewell says. “We’re a member-owned coop. A trustworthy brand.”

On the national parks. Jewell enjoys her work with the parks conservation group, which is already planning for the 100th anniversary of the national parks system in 2016. Improving the parks and getting more people to use them will help turn more Americans into environmentalists, she says. It should also be good for REI.

“My competition is anything that take people away from spending time outside,” she says. “Video games. Best Buy.”

On business and global poverty. The Initiative for Global Development was begin by a group of Seattle business leaders, the best known of whom are William Gates Sr., Bill Ruckelshaus (the first chief of the EPA), Daniel Evans (former U.S. senator from Washington). They are trying to organize other U.S. companies to promote jobs and trade in poor countries, and to exchange people and ideas with growing companies in the developing south.

An immediate focus is lowering trade barriers so that agricultural products like cotton and sugar can be more easily imported into the U.S. “Products imported from Bangladesh pay higher duties than products imported from France,” says Jewell. “How much sense does that make?”

As an REI member for many years, I’ve always enjoyed shopping at the stores and had good experiences with REI products. After meeting Jewell, I feel even better about doing business with the company.