Too warm for the fleece: Patagonia’s quest for relevance amidst climate change

Student comments on Too warm for the fleece: Patagonia’s quest for relevance amidst climate change

1. November 20, 2017 Alec Guzov says:

   Really well written article! I think a large part of why European corporations are further along in their sustainability efforts than Patagonia may have to do with the consumer demand for these corporate behaviors. While many Patagonia shoppers care about the outdoors, many apparel purchases seem to be feature-driven (how cold of temperatures does this product withstand, how sophisticated is the material, etc.). To your point about the lack of awareness of Patagonia’s sustainability efforts, I did not know about many of these initiatives. Only when I started reading about the company some more did I see that sustainability is core to the company’s mission. By increasing awareness, I think that this could drive many more customers to Patagonia, and incent management to push these sustainability initiatives even further. Beyond the training program that you suggest, I think that a high-profile marketing campaign could also aid the company’s cause. Since Patagonia is privately-owned, they can invest in building their brand in the short term without substantial ramifications.
2. November 21, 2017 FCP says:

   Thank you for writing this piece – in my opinion, Patagonia is one of the leaders in Corporate & Social Responsibility. I believe that there may be limitations to Patagonia building a closed-loop system due to challenges with collecting recycled clothing. Patagonia is a global company with a significant portion of its sales in the U.S., where the culture is often to pass down or donate clothing to the less fortunate after it is “consumed.” Based on Patagonia’s CSR write-ups, it does appear that the company is committed to purchasing and manufacturing products from recycled materials, but the collection issue may make it challenging to close the loop. While Patagonia could certainly do more to create awareness of climate change issues, it really does embody the triple bottom line mentality. One of the most interesting aspects of its CSR initiative is the support the company provides to others creating a positive environmental impact. Patagonia gives the larger of 1% of sales or 10% of pre-tax profits to environmental groups each year which is truly incredible.
3. November 24, 2017 DPI says:

   Awesome article and such an interesting comparison to our recent IKEA case. To your first question – regarding whether or not Patagonia can improve their ability to reduce their carbon footprint through 100% commitment to closed loop production – I believe they can certainly do more here. Similar to the IKEA case, my biggest critique of companies who focus solely on the sourcing of raw materials in the production of their goods is the fact that they are not providing consumers a process to return those same goods into the usage loop once they no longer need the product. For companies like IKEA and Patagonia, I would argue that a bigger part of the problem is the fact that consumers buy a lot of products and often times, the product are trashed after just 1-2 years of usage. Without addressing this issue, Patagonia (and IKEA’s) commitment to the ‘triple bottom line’ seems insincere to me.

   Patagonia can certainly do more here – many companies (Madewell, APC) now have a brand renewal program where the company pays a substantial amount of money ($25-50) each time you return a pair of jeans to them, to spend on new jeans at the store — and the old pairs are then resold after the company fixes them up. I think a program like this benefits the consumer – since they’re able to buy the next pair of jeans at a discount, benefits the company since it keeps purchases at that company and, benefits the environment since people are actually using and re-using products for as long as its viable.
4. November 24, 2017 Philip Sorensen says:

   Cool article! 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.
5. November 25, 2017 Imran says:

   Without question, Patagonia is a pioneer when it comes to sustainability. The company has been committed to environmentally friendly practices for the past 30 years [1]. And I do believe consumers in today’s world are finally giving such practices equitable importance in their purchasing decisions. There are over 90 million millennials in the U.S. alone, spending ~$600 billion each year [2]. These group of consumers are dedicated to improving our planet — studies show that 45% of millennials stated they could be influenced to support companies that are committed to helping the environment [2]. They are even willing to pay more for sustainable products [3]. Retailers like Patagonia have played a pertinent role in placing importance on sustainable practices, but the next wave of importance will be created by the consumers themselves. I believe the next generation of consumers will generate pull for sustainable products, creating a movement within retail players to uplift their standards.

   [1] http://csrcentral.com/patagonia-the-clothing-company-with-a-revolutionary-approach-to-csr-sustainability/
   [2] http://www.mytotalretail.com/article/millennials-going-green-means-retail-must-follow/
   [3] https://www.cnbc.com/2016/11/04/millennials-willing-to-pay-more-for-sustainable-better-quality-goods-nestle-chairman.html
6. November 26, 2017 Jason Bourne says:

   Very interesting read. To the questions posed, its unclear why Patagonia should take further initiative than it already is in lobbying for carbon caps for apparel firms, which might be seen as a protectionist or anti trust move. Patagonia already seems to be the leader in sustainable apparel and there is no imminent threat to its supply chain due to climate change. Shifting production locations closer to retail locations will decrease not just transportation related CO2 footprint but also possibly bring costs down for end consumer. Beyond the incremental improvement in their carbon footprint, I would argue that lobbying for carbon caps is not Patagonias responsibility , though they could possibly capitalize on brand goodwill.
7. November 28, 2017 StarP says:

   Very interesting essay, great job! I had no idea that the apparel and textile industry contributed so much towards greenhouse emissions and water usage. To that end, I think your point about educating the end consumer is very important. Beyond educating me about Patagonia’s own supply chain sustainability initiatives, I believe that consumers would benefit from learning about the apparel industry’s environmental impact as a whole. I recommend that apparel brands/retailers collaborate together on an industry education initiative, with Patagonia at the forefront. Currently, sustainable products and business operations is a competitive point of differentiation for most companies; I would argue that for the collective good, we should expect it as table-stakes, rather than a differentiator. Consumers are growing increasingly conscientious about what they consume — oftentimes, the education piece is lacking.

   The other parallel I would draw is with the food / agriculture industry, which is one of the biggest offenders in terms of GHGs and water usage. One initiative that food leaders, such as General Mills, have done is pledge a certain reduction in GHG and water reduction. To implement this, they have actually pledged to reduce their environmental footprint throughout the ENTIRE supply chain – beyond their own direct operations. The majority of GHG and water usage occurs upstream of the company’s own operations, in the operations of the suppliers and growers. I could see that applying to Patagonia and apparel brands as well (e.g. with cotton growers and fiber manufacturers).
8. November 29, 2017 F1991 says:

   Thank you for writing this article! As I read it I reflect on the role that each individual company has on what is the second most polluting industry in the world. The problem with many sustainable initiatives is directly link to the power of competition. The fact that one company has the responsibility to drastically change its operations to diminish the amount of greenhouse emissions and waste they produce is hindered by its competitors. Implementing these changes are without a doubt costly so all fashion companies should be held to a similar standard.

   I think in this sense the responsibility to change the industry should come, in a way, through the consumers. We often forget the amount of power that consumers hold. If our own buying habits change, the fashion will have no other option but to adapt to out own standards. Is there a way Patagonia could partner with similar brands that advocate heavily for climate change and change de consumer perspective? How realizable is this?
9. November 30, 2017 Ko-Lee says:

   I suspect the question that Patagonia grapples with relates to which way a public ‘announcement’ of their sustainability efforts will swing the pendulum. While consensus tends to be that consumers around the world put a big price on sustainable manufacturing practices, research doesn’t always support the same. To quote Yvon Chouinard (Patagonia founder) in an interview some years back, “ Sustainability is not enough at all. Saving the planet is number 19 on people’s priorities. You’d think it would be number one. But no, number one is personal security. The world is scared to death of everything, right now.”

   Given that Patagonia is manufacturing a product associated with comfort in harsh climates, the focus on sustainability could well drop even further. In such a case, the onus is on the manufacturer to drive change in manufacturing practices, and in consumer behaviour. Interestingly, this was echoed by Chouinard in the same interview when he said, “So it’s not going to come from the consumer. It has to come from businesses who understand that the consumer is going to be demanding these kinds of products in the future. You have to start reacting right now, before the customer tells you so.”

   As a result, the onus is on Patagonia to drive customer education and sustainable production initiatives until the next generation of environmentally conscious consumers aren’t paying for their Patagonia themselves. The lack of faith that lobbying initiatives will, in fact, change competitor behaviour probably holds the firm back. After all, Patagonia refusing to undertake the same additional practices it propagates because its competitors refuse, while fair, will not play out well from a public perception standpoint.
10. December 1, 2017 JB says:

    Thanks for writing. Overall, I am not sure Patagonia has a huge incentive to promote policy changes to enhance sustainability. As you mention, the production of a cotton shirt consumes a large amount of water, and transporting production from Asia to America results in high carbon emissions. Therefore, one could argue that an appropriate policy response would be to disincentive the sale of clothes, such as by taxing clothes sales to account for the negative externality they cause. However, since Patagonia’s business model is based on constantly selling new clothes, I do not think the company would want to a) highlight the inherent negative environmental impact its business or b) ask for governments to increase the cost of clothes production.
11. December 1, 2017 Ashley Shaw says:

    What an articulate and thoughtful article, with a wonderful exhibit – I learned so much! I find your comment comparing Patagonia’s progress to its European counterparts to be particularly telling. Are there key political or cultural differences surrounding the integration of business and corporate responsibility or climate change that may help explain why Patagonia has not adopted these practices? I would argue that Patagonia has differentiated itself from its peers not only with its loud and demonstrated commitment to corporate social responsibility but also to its excellent customer service which encourages consumers to bring Patagonia products back for repair over and over instead of purchasing replacements and discarding, which I think adds to the company’s positive feedback loop. However, even this practice does not mitigate, and indeed may exacerbate, the huge burden contributed by absence of attention to the transportation implications of its sustainability initiatives.
12. December 1, 2017 Alexander Vidiborskiy says:

    I enjoyed the reading very much, thank you!
    Answering the second question I would like to notice that even though Patagonia with its $600M in revenue might be a leader in the outdoor clothing space, within the whole $3 trillion apparel market it might not have enough weight to lobby the policy. In contrast to IKEA case, in which the company has been one the largest consumers of wood and could’ve influenced its supplier by the virtue of the financial pressure, Patagonia doesn’t have enough scale to set the trend. I agree that companies in the clothing space should definitely be the force that changes the current situation with waste and environmental change and some of them already do that successfully – IKEA mentioned earlier, Nike and Adidas that are using recyclable plastic for its boots [1,2] and are imposing rigid standard for their suppliers, and many others. My view is that the larger the public company is the more its investors should demand careful consideration of opportunities for positive environmental changes. As we saw in IKEA case it might not only bring positive appearance to the company but also might be a source of operational improvements, for instance, cost reduction.

    [1] https://www.nike.com/us/en_us/c/innovation/grind
    [2] http://www.adidas.com/us/parley
13. December 1, 2017 GN says:

    Very interesting read! Patagonia has been a pioneer in the sustainability arena and one of its great marketing campaign from 2011 “Don’t Buy this Jacket” which emphasized the company’s environmental initiatives. Having said that, I do think there is more that can be done. One of the points you brought up in the article was relocating some of the factories to south America in order to be geographically closer to North America. This will indeed enable to cut down on emitted carbon dioxide but there are other factors to take into account such as availability of resources and human labor policies in the country.
    Another option would be to incentivize people to return used clothes when buying new ones – whether by receiving a discount a new product or even being part of a social sustainability loyalty program. Although many people donate or hand down their clothes, there are some who don’t and prefer to know that these clothes will be recycled.
14. December 1, 2017 Eric Blair says:

    Very interesting article! I was very encouraged to read about the extent to which textile manufacturers are willing to incorporate additional costs into their supply chain, in pursuit of more sustainable ends. My initial concern was similar to that of Philip, in that I was skeptical of the extent to which consumers would consciously opt into paying more explicitly to ameliorate carbon emissions, especially as I expect consumers value their right to sovereignty over the causes to which they direct their money. It would be interesting to explore the extent to which their environmentally friendly image is tied to their brand image as an American company, and thus the extent to which it would be challenged by the transitioning of manufacturing facilities over seas.
15. December 1, 2017 Anum Chandani says:

    Interesting read but I am curious to know how much of their profit margins are they willing to reinvest in the improving production process. Is Patagonia looking at drastically improving the process by reducing the amount of water used and in turn the GHG emitted. I understand that they are looking at cutting transportation cost however it will be interesting to find out how much of their future investment is made towards improving the overall production process at their factories as that seems to be the root cause of the problem.
16. December 1, 2017 hedychen says:

    Thank you so much for writing about this important topic! As a consumer of Patagonia, I had limited knowledge of the sustainability initiatives they have taken on as a company and appreciate your essay in helping educate me personally.

    Patagonia is definitely taking tremendous steps in the right direction, and I commend all the initiatives they have. I believe they are lagging relative to their counterparts partly because the U.S. has not adopted the same standards as European corporations and there is less industry pressure overall in apparel versus oil and gas. When I think of fighting climate change, I often immediately think of automobiles and manufacturing plants, not t-shirts and fleeces. I think that to pressure corporations to speed up change, consumers need to do their part to focus on the apparel industry and make that a criteria in their buying choices.

    There is nothing tangible preventing Patagonia from leveraging its leadership to shape policy for apparel firms, but I think a lot of it can be drilled down to lack of consumer education and marketing of its efforts. If consumers better understand Patagonia’s efforts and credit them with purchases, competitors will take note and follow suit.