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Patagonia: Successful Corporate Environmentalism

Typically, corporations have one goal; to make money, and as much of it as possible. This usually comes at the expense of both the workers and the environment. This is especially the case in the fashion industry, where fast fashion has mistreated workers and the environment to become one of the economy's most wasteful yet profitable sectors. There is one fashion company that breaks this mold and has shown that it is possible for companies to be environmentally friendly and traditionally successful (in other words, profitable). This is the story of Patagonia, which rose from a small foundation to be one of the most influential businesses of our era.

Patagonia started in 1957 when founder and rock climber Yvon Chouinard started selling his DIY climbing gear to fellow climbers. In 1965, Chouinard expanded his business when he started Chouinard equipment, and in just five years Chouinard Equipment became the largest supplier of climbing hardware in the US. After realizing that their steel hardware was damaging rockfaces, they switched to aluminum, taking the first in many steps towards environmental friendliness.

They later moved into the apparel business as well and continued to succeed as they completely overhauled conventional climbing clothing. They then expanded the apparel side of the business into other outdoor sports and completely changed the game with their quick-dry yet warm materials.

As Patagonia grew, it also supported the values of its workers and became a very informal and open workplace. By hiring people with a love for the outdoors, Patagonia was able to keep environmental protection as a core value.

As all of this happened, Patagonia began to get more and more involved with environmental issues. In the early 70s, a group of its employees helped defeat a plan that would have destroyed the environmental productivity of the Ventura River. They also began to regularly donate bits of their profits to small conservation NGOs, and in 1986, they committed to donating 10% of their profits to these groups annually (this was later expanded to 10% of sales). In 2002, Patagonia founder Yvon Chouinard along with Craig Mathews, founder of Blue Ribbon Flies, created 1% for the Planet, making it much easier for other businesses to do the same. Furthermore, Patagonia is Fair Trade and B Corp certified and they have been very open with the pubic about their environmental impact.

Patagonia has also become a major environmental educator, as they make wonderful short films and articles about various environmental issues. In fact, every year since 1988 they have undertaken a major education campaign on an environmental issue.

A long-held value that has been expanded upon in recent years the use of sustainable materials. They have found various ways of using recycled materials since the mid-80s, and in recent years, they have expanded their use of recycled materials, led the way in removing toxic PFAS from clothing, set up programs where they recycle and fix old or broken gear, and much more.

Yvon Chouinard’s most recent groundbreaking announcement (which was earlier this week) was that he gave up ownership of the company. Patagonia, which is valued at around $3 billion, is now the first company owned by a nonprofit. 98% of Patagonia shares are now owned by the Holdfast Collective, a specially designed trust that ensures that all of Patagonia’s profits (around $100 million annually) go to combatting climate change and preserving nature. Patagonia will continue to operate as a private, for-profit company, but now they are doing even more for the planet.

Patagonia has broken the model of traditional businesses countless times, and the progress it has made has pushed other companies (especially outdoor apparel companies) to follow in their footsteps. They are the perfect example of how great things can be accomplished with great leadership.



Sources:

https://www.patagonia.com/ownership/

https://www.nytimes.com/2022/09/14/climate/patagonia-climate-philanthropy-chouinard.html

https://www.patagonia.com/company-history/

https://www.patagonia.com/activism/

https://onepercentfortheplanet.org/en/about#:~:text=Realizing%20their%20responsibility%20to%20protect,and%20started%20a%20global%20movement.

https://www.bloomberg.com/news/articles/2022-09-15/patagonia-billionaire-who-gave-up-company-skirts-700-million-tax-hit


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