Patagonia’s Mission Against Climate Change
Beloved by nature enthusiasts and urban dwellers alike, Patagonia is an outdoor clothing and gear designer founded in the early 1970’s. Since its inception, Patagonia has a legacy of environmental and social responsibility that has been codified in its mission statement: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” [1].
Climate Change in the Apparel Industry
As an environmentally and socially-conscious business, Patagonia has recognized climate change as the key “crisis” to overcome in its mission. Climate change has significantly impacted the apparel industry, from upstream farmers and manufacturers to downstream retailers and consumers.
On the suppliers’ end, volatile temperatures and depleting global water supplies reduce crop yields and increase textile prices [2]. While cotton is the most commonly used natural fiber, it is extremely thirsty, and a single shirt requires 2,700 liters of water. Cotton production is linked to a decrease in global water footprint due to over-drawing by cotton farmers, and it is associated with disproportionately high pesticide use relative to its land use. Commonly used synthetic fibers such as polyester require less land, water, and pesticides; however, due to greenhouse gases emitted during manufacturing, polyester has twice the carbon footprint of cotton [3].
On the consumers’ end, the rise of fast fashion has led to shortened fashion cycles and micro-seasons, driving increased clothing consumption and waste. As the apparel industry has grown, it has become the second most polluting industry in the world after oil, equivalent to the entire country of Russia [4], and consumers are increasingly demanding ethical practices and transparency.
Patagonia’s Mission Against Climate Change
Since its founding, Patagonia has made concerted efforts to actively reduce its environmental impact. Its products are made primarily with textiles causing lower environmental harm, including both natural materials (organic cotton, hemp) and synthetic fibers (recycled polyester). Since 2000, Patagonia has worked with certifier Bluesign to monitor its supply chain and ensure the safety of fabric chemicals and dyes used in its manufacturing [5]. Patagonia quantifies its corporate carbon footprint and measures renewable energy usage, which it aims to improve on an annual basis. Over the longer-term, Patagonia works to develop innovative products that are more durable and repairable, thereby extending their useful life and decreasing their environmental impact.
Additionally, Patagonia supports environmental non-profit groups and encourages other companies in its ecosystem to do the same. Since 1985, it has contributed $70 million to non-profits through an “Earth Tax” comprising 1% of sales. Patagonia’s founder Yvon Chouinard co-founded a non-profit which has raised an additional $100 million in contributions from member companies [5]. In 2016, Patagonia announced it would donate its Black Friday sales to organizations focusing on air, water, and soil protection; it projected $2 million in sales and ultimately achieved $10 million, with 100% of proceeds contributed [6]. Employees are encouraged through an Environmental Internship Program to volunteer up to 320 hours per year for environmental non-profits while still receiving full pay.
Lastly, Patagonia engages in advocacy and education with external stakeholders. It regularly highlights environmental issues on its corporate blog, with recent articles including global warming’s impact on cold-water fishing, the importance of regenerative organic agriculture, and environmental protection of U.S. federal lands. Through its “Vote our Planet” initiative, Patagonia encourages customers and employees to vote for local, state, and national candidates who support climate action. Patagonia registered as a certified B Corp in 2011 and a Benefit Corporation in 2012, a legally binding commitment to the environmental and social goals laid out in its corporate charter [5].
Additional Recommendations & Concerns
There are additional measures Patagonia should take to manage climate change in its global supply chain. It launched its “Footprint Chronicles” in 2007 to provide transparency about its products’ origins and allow consumers to identify specific manufacturers associated with their items. However, it is unclear whether the full supply chain has been traced; furthermore, Patagonia should disclose key environmental initiatives it has implemented at each of its farms, mills, and factories.
Patagonia currently quantifies carbon footprint and renewable energy usage only for its corporate network, but it should also aim to do so for its full supply chain. Over the medium-term, Patagonia should incentivize better performing suppliers by including relevant metrics on its internal product quality scorecard, developed in 2015 to evaluate quality metrics including lack of environmental harm.
A key concern facing Patagonia management is the tension between good and bad growth [7]. As the brand has become increasingly popular with mainstream consumers who may not be aware of its environmental and social mission, one questions whether Patagonia’s rapid growth and increasing demand for its products is causing undue stress on its supply chain sustainability. How should Patagonia best use its unique position to further effect change across its devoted customers?
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Sources
[1] “Patagonia’s Mission Statement”, Patagonia (2017), http://www.patagonia.com/company-info.html
[2] Zaczkiewicz, A., “Is Climate Change Killing the Seasonality of Fashion Apparel Retailing?”, Women’s Wear Daily (October 18, 2016), http://wwd.com/business-news/business-features/climate-change-impact-fashion-apparel-10525390/
[3] Drew, D. and Yehounme, G., “The Apparel Industry’s Environmental Impact in 6 Graphics”, World Resources Initiative (July 5, 2017), http://www.wri.org/blog/2017/07/apparel-industrys-environmental-impact-6-graphics
[4] Sweeny, G., “Fast Fashion Is the Second Dirtiest Industry in the World, Next to Big Oil”, Ecowatch (August 17, 2015), https://www.ecowatch.com/fast-fashion-is-the-second-dirtiest-industry-in-the-world-next-to-big–1882083445.html
[5] “Our Business and Climate Change”, Patagonia (2017), http://www.patagonia.com/climate-change.html
[6] Addady, M., “Patagonia’s Donating All $10 Million of Its Black Friday Sales to Charity”, Fortune (November 29, 2016), http://fortune.com/2016/11/29/black-friday-2016-patagonia/
[7] MacKinnon, J. B., “Patagonia’s Anti-Growth Strategy”, The New Yorker (May 21, 2015), https://www.newyorker.com/business/currency/patagonias-anti-growth-strategy
Cool article! I wrote about LEGO’s similar efforts to reduce its supply chain’s Co2 footprint and found it inspiring to read that Patagonia actually contributes a significant amount of money towards environmental non-profit groups. At first, I was a little bit skeptical as to whether Patagonia would actually be able to communicate this additional value proposition (apart form its high quality standards) to its consumers. However, after browsing trough Patagonia’s online catalogue, it is quite clear to me that they have done a tremendous job in highlighting the relatively positive climate impact of its products under the description of the product features. My only concern is whether all of Patagonia’s consumers are willing to pay a premium towards climate change combat. Considering the amount of good causes out there, an alternative model could perhaps be to allow the consumer to choose which causes Patagonia should support upon payment- e.g. climate change, breast cancer, poverty, etc.
Karen, thanks for the interesting article! It is refreshing to see a company putting their money where their mouth is in regards to sustainability and climate change by being mindful of choosing low impact raw materials and manufacturing processes, adequately conveying info about their cause to consumers, donating to environmental causes, and offering repair and recycling services to further combat climate change by reusing and/or reducing the amount of new products needed. Their Worn Wear programs are really neat: you can recycle gear you are tired of, purchase used products instead of brand new, and repair damaged products for a small fee or in some cases for free.
Awesome article, Karen! I agree with JV that it’s great to see a company enforce sustainability at each level of its operations rather than just paying it lip service. You raise an interesting question regarding engaging the growing customer base to help Patagonia realize it’s sustainability goals. The Patagonia website currently features an initiative to get customers to donate to or volunteer at the grassroots organizations that it works with through its “1% for the Planet” pledge and efforts like this to connect customers and worthwhile non-profits is a good step towards teaching/reinforcing Patagonia’s mission to new and longterm customers alike.
Great job, Karen! I also thought your question about growth was interesting – if we’re talking from a marketing perspective, I wonder if they will use price at all to regulate their supply and demand in the future. Will they raise their prices as it becomes increasingly difficult to regulate their supply chain? One other thing I was thinking about was their affect on other companies – if they encourage others to follow suit, do you think they will lose their competitive advantage in the industry at all (though it will be benefiting causes that they champion)?
Wow, Karen, I had very little idea that the fashion industry is that taxing on our climate. While I think Patagonia has done a great job addressing this, I believe most fashion companies do not, because the industry is not incentivized to get away from the fast fashion trends and constant replacement of our wardrobes. I wonder if there are other organizations (e.g. regulatory body?) that can step in and put some pressure on these companies to be more environmentally conscious like Patagonia.
Karen, just wanted to get your thoughts on the ability of other clothing manufacturers to pursue similar harm reduction strategies. Patagonia has a few advantages when it comes to this topic: they are privately held by their founder, they have an active and engaged customer, and thanks to their status as a near-luxury brand (“Patagucci”), presumably cushy margins. I would suspect that competitors, as a whole, have neither the motivation nor means to invest in these initiatives. I wonder if a statutory or self-regulatory regime will force the rest of the industry to adopt the same standards as Patagonia and price the cost onto the customer in unison.
Great article Karen! I agree with above comments that it is relieving (and surprising) to see a company taking actions to actively tackling the climate issues. I have known the brand Patagonia for a long time; however, I have never realized that such aspect of the company, so I became curious about how they communicate on their position towards the climate changes and its action. I just visited Patagonia’s homepage, and the first thing that came into my eyes was not about their sales, or about quality of their products – it was an ad for awareness raising campaigns “This land is your land?”, discussing how our land and water are under threat. I became fully convinced that they are truly hoping to combat the climate changes.
With regards to your concern on the tension between good growth and bad growth, I would argue that it is already under bad growth, given most consumers are not aware of their corporate vision. I would suggest Patagonia to keep on advertising their mission, and make sure all purchasers or potential purchaser are well aware of its environmental and social mission. I disagree with Philip’s concern that consumers may not be willing to pay premium, as the consumers who are able to afford Patagonia are likely to resonate with its mission and would be happy to pay for the premium.
Thanks Karen – I am glad you wrote about Patagonia! Having read Yvon Chouinard’s book defining his philosophy on business as a means to fuel positive environmental action in the world, I am convinced that true corporate environmentalism stems from a leadership commitment. I think you are right to raise the concern near the end that Patagonia, as a popular consumer brand, should be careful about not selling at an unsustainable scale. However, I think the company, from its roots, has been extremely intentional about not expanding to a point that it cannot support with a sustainable supply chain. One way that it does this is, in my opinion, is with its pricing. Selling somewhat of luxury products, Patagonia, I would imagine, maintains its margins while selling less products than the traditional mass market retail apparel company. In addition, Patagonia should continue with its strategy of heavy environmental marketing, ensuring that its consumers base will be those that champion its sustainable vision of reducing overall consumer greed.