Why Yvon Chouinard’s decision to give away his company shouldn’t surprise you.
On the most painful day in the company’s history, Patagonia and its founder, Yvon Chouinard, were in crisis. Never before in decades of rapid growth — from becoming the country’s largest supplier of climbing hardware to offering a clothing line that transformed from supplement to all-star — had Yvon laid off a single employee.
But now he had no choice. In a struggling economy, lenders abruptly clamped down on the company’s credit. Patagonia had become so reliant on double-digit grown that a 20 percent increase in sales was a financial blow, compared to years of 30 to 50 percent compounded annual growth. Sales fell short of what they’d prepared for, hired for, expanded for. The company had fallen prey to unbridled expansion and its lender was suddenly unable to cover its mistakes. Yvon had to let go of 120 people, many of them friends who’d been hired over the years. A fifth of his employees were out of a job.
The year was 1991. The day was July 31, what Yvon calls the single darkest day at the company. It was also a turning point for the man who hadn’t set out to do big business. Once a free-roaming mountain climber, Yvon had started with a simple handmade hardware business to support his lifestyle during offseason months. As a young man, he had always loathed the corporate ideal — to grow a profitable business as swiftly as possible, with no regard for its people or product so long as it produces a gold mine for the businessman to enjoy as he retires to a breezy, comfortable golf course lifestyle. Businessmen and politicians were, he thought, the “source of all evil.”
But by 1991, the outdoorsman and one-time blacksmith had forged an unconventional but thriving company, built on goods that his people were proud to make. The core driver was always that they avoided environmental destruction where they could. Early on, despite the popularity of his climbing pitons (metal spikes driven into cracks or seams in rock face), Yvon used an essay in his catalogue to steer climbers away from his best-seller. At Yosemite, he had been shocked and saddened to see how severely the pitons were disfiguring the mountains he loved so much. So he proposed “clean climbing” with aluminum chocks. Soon, chocks sales outpaced pitons and Chouinard Equipment phased out of the product that had delivered its first success. Many more would follow, especially with the addition of clothing for outdoor adventure-seekers; between the mid-1980s and 1995, sales ballooned from $20 million to $100 million. And the company expanded its efforts toward sustainability, too. Employees began recycling paper waste in 1984 and Patagonia became the first to issue catalogues made of recycled paper. In 1986, the company committed to give 10 percent of pre-tax profits to nonprofit environmental groups and, in 1998, it launched its first national environmental campaign, supporting a plan to deurbanize Yosemite Valley. Yvon was a far cry from the corporate glutton who mined for profits only.
And yet, here he was. The company started in the ’70s had become, like others, trapped in the prison of unsustainable growth. Watching natural resources being diminished was becoming his lifelong sorrow, and he saw that his efforts, while better than most, were still too small. It wasn’t enough to undo or slow the damage. Even his own company had become another example of recklessness.
One consultant recommended he sell Patagonia for $100 million. Those dollars could be used for to soothe environmental causes that troubled him so deeply. Or he could stick with it, make changes — even if they were painful or counterintuitive — and redirect the company more fervently toward being a change-maker in worldwide sustainability. He could cash out, or he could rebuild a completely dedicated company.
He took his managers to Argentina, to the wildlands of the real Patagonia, to consider their fate. And it was there, back among the wonders of the natural environment, where they remembered what had brought them all together in the first place. People worked at Patagonia for its values, because it committed to something meaningful, something other than a product or even a business. They worked there because they loved they outdoors and they wanted to protect and care for it. Yvon decided he wouldn’t risk those values again. They would renew a pledge to ignore the pressures of the corporate world and devote the company to the needs of the natural world. Yvon wouldn’t sell. He could do more good with a healthy company, one positioned as a model for others, than with a one-time gift of $100 million to environmental causes.
They committed to do everything possible, no matter how challenging, starting with trimming cost and waste internally, including a closer look at the company’s own environmental footprint — highlighted in detail by a first environmental assessment in 1994. That began an ongoing effort to clean up Patagonia’s supply chain, seeking organic natural fibers and recycled synthetics and avoiding toxic dyes and chemicals. They also would investigate labor practices (the company went on to become a founding member of the Fair Labor Association) that still, today, go as far as interviewing workers on the ground floor of potential suppliers.
Cotton, which contributes millions of metric tons of greenhouse gas emissions annually and is most often grown through genetic modification, emerged as a major culprit in that initial study. It was time to make good on the new promise.
And they did.
In 1996, the company met its goal to switch to 100 percent organic cotton for all sixty-six of its cotton products — an undertaking that took company representatives past existing suppliers, who didn’t have enough organic cotton for the company, and directly to new farmers. Patagonia had to trace fiber all the way back to bales of raw cotton and then had to convince ginners and spinners to handle a natural product with leaves and stems still to be sifted out. The research and alliance-making was tedious, painstaking, and expensive. And, because the line sold successfully, the company was able to influence others in the apparel industry to move toward organic cotton (Patagonia’s buyers even coached Nike and Gap on switching to organic) and it spurred growth in organic cotton farming.
That path, to investigate potentially harmful components and supply chain practices and then to be willing to make pricey, unprecedented changes, became an ongoing process in each step of the company’s design, production, and distribution practices. Shoppers now can explore the materials and manufacturing sources before they make a purchase through the company’s Footprint Chronicles — so someone considering a Lightweight Synchilla ® Snap-T ® Fleece can read about working conditions in the Nicaraguan sewing factory where the jackets are assembled or the energy investments of Portalec, the Patagonia supplier who worked with the company more than 30 years ago to develop the recycled materials branded as Synchilla ®.
But selling better-sourced products wasn’t good enough. Yvon had to search for ways the company could do more to further ground-level conservation efforts. The company continued to support activist causes by hiring like-minded people and by encouraging and responding to grassroots movements. Its financial giving — $79 million in cash and in-kind donations to environmental activists between 1985 and 2016 — is just one element. Patagonia also began offering a “Tools for Grassroots Activists” conference every 18 months to help more people participate in causes that align with its values.
Those environmentally conscious employees were encouraged to act, too. Patagonia’s internship program allowed employees to leave their jobs for up to two months, still receiving pay and benefits as they work for an environmental cause. And under some circumstances, the company would even post bail for employees who jailed during civil nonviolent disobedience. Manpower, education, and support. That’s the level of commitment the company demonstrates in making environmental change.
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On Black Friday 2011, the biggest retail sales day of the year and the time when most companies flaunt their best deals, a curious advertisement stood out among the flashy promotions meant to froth the crazed consumerism of after-Thanksgiving shopping.
Patagonia took out a full-page ad in The New York Times featuring a shot of its R2 Jacket, a breathable layer of warmth perfect for climbing or hiking and a product made from 60 percent recycled polyester built to be durable and lasting. An ideal gift for the upcoming holidays — only Patagonia advised against it.
In bold type, above the jacket’s image, it printed this request: “Don’t buy this jacket.”
The smaller type explained.
“The environmental cost of everything we make is astonishing. Consider the R2 Jacket shown, one of our best sellers. To make it required 135 liters of water, enough to meet the daily needs (three glasses a day) of 45 people. Its journey from its origin as 60% recycled polyester to our Reno warehouse generated nearly 20 pounds of carbon dioxide, 24 times the weight of the finished product. This jacket left behind, on its way to Reno, two-thirds its weight in waste.
“And this is a 60% recycled polyester jacket, knit and sewn to a high standard; it is exceptionally durable, so you won’t have to replace it as often. And when it comes to the end of its useful life we’ll take it back to recycle into a product of equal value. But, as is true of all the things we can make and you can buy, this jacket comes with an environmental cost higher than its price.”
At a time when most retail companies make their best sales, Patagonia was trying to make a point, one it had emphasized since an essay in a company catalogue in 1991 — the same year Yvon and company leaders renewed their commitment to the environment. The essay encouraged customers not to buy what they don’t need. The idea was this: Even a responsibly made product costs resources. That includes Patagonia products, no matter how much the company works to procure more responsible suppliers and manufacturers. So what’s the alternative to buying new?
One is to discourage needless consuming. Another is to make products that will last longer and then offer to recycle and reuse products that have outlasted their useful life. Another is to create ways for consumers to fix products, rather than buying new. All three are counterintuitive for a retail company, but that’s what Patagonia has done, and not just through editorial efforts. It launched its Common Threads Recycling Program in 2005 and has trained staffers to make repairs either in store or at the company’s Repair Center in Reno, Nevada, now the largest garment-repair facility in the U.S.
Its newsletters push conservation over consumption, too. Often, they focus on a specific cause or idea before they present a product to purchase, if they present one at all. An email from the company might ask subscribers to sign a petition to require stricter EPA regulations on bee-killing insecticides, with a link to join the request rather than one to go shopping. Or it might ask subscribers to add their voices to Department of Interior comment period to protect a national monument. Or it might be a story that puts a smiling face on one of the company’s family farm suppliers. Patagonia doesn’t just say it puts the cause before profits; it employs all facets of the company — from supply chain to management to marketing — to support its stated commitment.
Patagonia ambassador and avid rock climber Jasmin Caton, who’s scaled heights in across North America and in Greenland, France, Greece, Italy, Australia, says the company’s comprehensiveness in making environmental change is what makes it stand out against other, less costly options for gear and apparel. Their efforts — like a recent film “Jumbo Wild: Sacred Spaces and Wild Places,” which documented the push for and against another B.C. ski resort that likely helped land a final denial to developers — go beyond a press release or online petition that other companies might make. “It did a good job of showing that as recreationalists, we have to be stewards and think clearly about how we like ski resorts — but not in every place. It just made people think.” The lengths the company goes to, and the thoughtfulness, overcomes skepticism, too. “I have a wariness with respect to corporations. They will say anything to seem like they are doing groundbreaking work. On an individual level, though, everyone at the company deeply believes in their mission and walks the talk. It’s the furthest thing from greenwashing.”
Many companies have a mission statement; few follow it to the letter or execute the follow-through. Many do good — at least from their appearances — presenting oversized checks to certain causes, but few would be willing to donate 10 percent of pre-tax profits. Some have made efforts to create products with less harmful ingredients to meet consumer demands for more responsible products, but few change their sourcing and pricing before the demand exists. What other companies have ever actively sought a reduction in purchases — whether through a surprising Black Friday advertisement or by ongoing efforts to have buyers get their products repaired, rather than buying new? Patagonia made a pact, and it hasn’t wavered. It exceeds the standards of its customers in quality and durability — but also in its dedication and resolution.
Barry Blanchard, an alpine climbing ambassador since 1991 and a friend of Yvon’s since pre-Patagonia days, isn’t surprised. It reflects the nature-fearing climber he’s known for most of his life. “Yvon’s reason for being in business is to try to promote positive change for the environment. It’s not something he says. It’s something he lives and does.” He didn’t sell when the consultant suggested he should, and he’ll tell anyone, including his customers, to buy used clothes. “If you hang around with the guy, he’s got access to a great wardrobe of outdoor clothes and he does test new stuff, but he also walks the walk. I went to his cabin in Jackson, and they’ve bought all the cutlery and furniture from secondhand stores and outfitted the cabin with stuff where the harm is already done.” He’ll repair his clothes and does what he asks of customers: Get the most use of items that have already been produced (and taken their environmental toll). “If you saw him on the street, you wouldn’t think he was a homeless person exactly, but he certainly doesn’t look like he runs a multimillion-dollar company.”
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In 2013, Patagonia took on a new task. To prepare, the company assembled plant geneticists, fishery biologists, fisherman, farmers, and chefs.
The opportunity, this time, was not in sporting equipment or clothes, but in food — a source of harmful, polluting practices since the Industrial Revolution. It was starting fresh in new territory, an endeavor Yvon calls the company’s most important so far.
Patagonia sent crews to research agricultural techniques at small farms that compost and find natural alternatives to chemicals. It sent others to rivers, to rediscover ancient ways of fishing with selective-harvest. Still others went to search for farmers raising livestock in more natural ways, with animals that wander free-range and grow without hormones or industrial feedlots.
With Patagonia Provisions, the family of companies now sells eco-conscious foods, an undertaking Yvon hopes to use to encourage older, slower methods of producing nutritious foods. More careful agriculture and harvesting, he says, might be the best way to not just slow the damage consumers inflict on the earth but also to help it heal, following studies that showed that compost could help absorb greenhouse gas emissions in an impactful way — if it’s used more broadly. Of course, Patagonia’s aim is to cause that broader change, the same way the company has done with organic cotton use, recycling, or giving to environmental causes. They will act as explorers and researchers, and use their success and influence to counsel other companies, even competitors. That happened in 2009, for example, when Yvon worked with Wal-Mart executives to launch the Sustainable Apparel Coalition, a group of about 175 retailers, manufacturers, and suppliers. Together, they introduced the Higg Index, a standardized way to monitor the environmental and social impact of supply chains.
The company also helped found 1% for the Planet, a group of more than 1,200 companies and brands that have pledged to give at least 1 percent of annual sales to nonprofit environmental groups; started its own venture capital fund, $20 Million and Change, to support startups with products or ideas meant to produce positive environmental or social change; and worked with four other companies to create a $35 million fund for residential rooftop solar power. Beyond monitoring and minimizing its own environmental footprint, and beyond trying to foster cultural change among consumers, Patagonia has worked to change other companies, even competitors.
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While Patagonia’s message — and its commitment — have been built around putting environmental needs above profit or growth, it still functions as a for-profit company. Has it been able to stay faithful to its commitment and make money, despite those priorities? In a remarkable way, yes. The efforts to make the company more responsible, internally and through its interactions and influence, have in no way made for a financially weak company. It’s stronger and more sustainable than in 1991. When the Great Recession hit, the company sailed through with sales that grew by 25 percent. In fact, according to a company statement, profits tripled between 2008 and 2014. It has a cause that is integrated into its business model, it has a loyal customer base that supports it even in difficult financial times, and it has achieved growth that far outpaces its peers. By 2015, company sales reached $750 million, and FORBES placed Yvon’s net worth at $1 billion (an accomplishment he eschews).
Patagonia’s efforts are authentic, and they’re seen as such. The work is nonstop and woven through how the company operates and what it demands of any company it deals with. Because it has shown that it can be profitable and still be committed to its cause, Patagonia has influenced others, too — and not just other companies. Entire industries.
Why has it earned such loyalty? People, including consumers, need to know they’re part of something greater than their own life or efforts. With Patagonia, they can be, and they know it’s not something done in a gimmicky, half-hearted, or short-term way. Toms does it by giving to the needy with every shoe you purchase; Warby Parker does the same with glasses. Fashion designer Stella McCartney does it with her animal-free mandate. All three are for-profit entities committed to a cause. Patagonia has shown commitment, and in doing so, it offers purpose that its customers can be part of without fearing their efforts will be abandoned. Similar to the role of consistency in building trust, commitment ensures that a person or organization will continue doing what matters to the people who become loyal — but it goes beyond that. It shows the company or leader will continue to look for new ways to fulfill its promise. Because Patagonia has stayed true to its pledge — and followed through in ongoing, expanding, tangible, and traceable ways — it has created loyalty that upholds a profitable, healthy company. The sense of fulfillment it offers to employees and customers elevates them by connecting them to a grander purpose.
