Photo © Todor Bozhinov
As of 2013, Patagonia, Inc. was earning $540 million in annual revenue, employing over 1,300 people and boasting perhaps the largest eco-conscious enterprise in the world.
Yet as recently as 2012, Patagonia founder Yvon Chouinard told the Wall Street Journal, “I never even wanted to be in business. But I hang onto Patagonia because it’s my resource to do something good. It’s a way to demonstrate that corporations can lead examined lives.”
Chouinard’s entrepreneurial story begins the way most of them do, out of a small, confined space that would one day be dwarfed by its ultimate multinational incarnation. But there are two salient distinctions between this story and your typical startup-to-riches scenario: instead of a basement or a garage, Patagonia was forged in Chouinard’s blacksmith shop in Ventura, California; and instead of humble beginnings, Chouinard came to his humble occupation only after climbing down from the world’s most awesome mountains.
By 1973, Chouinard had already been climbing for two decades. He’d taught himself to blacksmith in 1957 when he became frustrated by the soft, single-use iron pitons that were available at the time. Ascents he made with his self-forged chrome-molybdenum steel pitons up Yosemite’s Lost Arrow Chimney and Sentinel Rock were enough to attract interest from other climbers, and he was eventually selling them for $1.50 each.
Fast forward to 1965 and Chouinard teams up with Tom Frost, an aeronautical engineer and fellow climber, and the two began specializing in high-end gear for rugged people living rugged lives. By 1970, Chouinard Equipment was the largest supplier of climbing hardware in the United States. In its company history, Patagonia acknowledges that “[i]t had also become an environmental villain because its gear was damaging the rock.”
Something better for the rock and better for the world was needed. For Chouinard, it was an easy move to make.
“I know it sounds crazy,” he told Inc. in 2013, “but every time I have made a decision that is best for the planet, I have made money.”
Where Chouinard Equipment ends, Patagonia begins. The company was founded with the core mission to “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.”
To the surprise of cynics everywhere, Patagonia accomplished exactly that.
To gain some insight into how Patagonia has blended its business and environmental goals, I spoke to one of the company’s top representatives. His name alone evokes a John Williams score.
Meeting Indiana Jones
Rick Ridgeway is Patagonia’s Vice President of Environmental Affairs, and it is the least dangerous position he’s ever been in. Ridgeway was one of the first Americans to summit K2 and part of the first team in the world to do so without supplemental oxygen. That was in 1978. Two years earlier, he was part of the second American team to climb Mount Everest. He has explored six continents, directed several documentaries, written six books and has been honored with National Geographic’s “Lifetime Achievement in Adventure” award. Rolling Stone has called him “the real life Indiana Jones.”
Born and raised in Orange County, California in the 1950s, Ridgeway started mountaineering in the late ‘60s. He spent a lifetime climbing and traveling the world, and it was not until 2003 that he landed his first corporate job, courtesy of his old climbing buddy, Yvon Chouinard.
Chouinard and Ridgeway had been climbing together for over 40 years when Ridgeway was asked to join Patagonia’s board. In 2005, he began overseeing their environmental initiatives on a permanent basis.
By that point, “going green” was beginning to gain traction in the corporate world, but Patagonia’s environmental consciousness had been born with the company. Ridgeway’s job would be to push it even further, to draw the line between “greenwashing” and actually making a difference.
“The company was really safe from any charge of green marketing,” said Ridgeway. “And the reason is because of the company’s philanthropy. We give one percent of our sales off the top to environmental groups.”
Since 1985, Patagonia has committed one percent of its total sales or 10 percent of its pre-tax profits – whichever is higher – to environmental groups. In the last three decades, Patagonia claims to have given over $61 million in grants and in-kind donations to over 1,000 organizations.
“And then,” added Ridgeway, “the profits of the company go into a family foundation that is in turn used for environmental protection. So anybody who might claim the company is touting its commitment to environmental protection so it can just grow and sell more stuff is failing to recognize that as the company gets more successful and it does grow, it all goes back into the environmental movement. You can’t criticize anybody for green marketing when the whole purpose of the organization is to support the environmental movement.”
Case in point, the company’s transition to organic cotton in 1996. The decision was made based on social responsibility and the company’s commitment to leading what Chouinard has often called an “examined life.”
In the late ‘80s, the company learned that employees at a Boston store were becoming sick after inhaling the finish on the cotton clothes stored in the basement. After commissioning a study on what was in the finish (formaldehyde), the company learned that cotton grown with pesticides was bad for the environment and bad for human health.
As Chouinard himself has said, sometimes “living the examined life is a pain in the ass.”
Regardless, Patagonia committed to environmentally sound materials and practices at every step in its supply chain, “from crop to fabric to finished garment.” This includes hiring an outside auditor and an in-house corporate responsibility specialist to ensure its international factory workers are ethically employed and fairly paid; it includes making fleece jackets from recycled plastic; investigating the sources of its electricity; supporting its employees with adequate medical insurance, providing maternity and paternity leave, subsidizing childcare; and telling customers not to buy their products on Black Friday, as a statement against the rampant consumerism. Patagonia, Inc. has also been a certified B Corporation since December 2011.
Patagonia pursues these socially responsible goals without mandate from government or governing body, and it takes pride in the fact that it doesn’t chase lowest-cost labor around the globe. It is unique in that it refrains from donating to schools, hospitals or the arts to focus almost solely on the environment.
“Those kind of partnerships are important to us,” said Ridgeway, “and it’s not that we ignore the support of social justice goals and organizations. Rather, we focus on environmental protection because our own analysis over a period of 13 or 14 years now [shows] that the root of all social injustice issues is in some form of environmental degradation, extending all the way to things like the AIDS epidemic. If you really dig deep and you keep looking for the sources of the epidemic, eventually you arrive at forest and habitat degradation in Central Africa. And it’s true with so many social issues that at their headwaters lies some kind of environmental degradation.”
Ridgeway adds that Patagonia does support fair trade organizations that help them implement fair labor practices in the factories where their goods are made (Patagonia’s products are manufactured in factories on almost every continent). And there is one very special organization that Patagonia regularly donates to.
“We do support one social justice organization – and we have from the beginning – and that’s Planned Parenthood. And that’s because population growth is so linked to environmental issues,” said Ridgeway. “We’ve always supported them.”
This has been an unpopular move in the eyes of the conservative right, but Ridgeway was delighted to share a story of how unshakeable their commitment is.
“A Catholic group came out – a number of years ago now – with a campaign once they learned about our support for Planned Parenthood. They started picketing our stores. We had this really cool idea where we made an announcement at every store where they were picketing. We had people at the store counting the number of picketers and for every picketer, we increased by – I think – $100 our donations to Planned Parenthood. The picketing disappeared the next day.”
It seems that one benefit of leading an examined life is that its decisions do not waiver in the face of adversity. Ridgeway acknowledged that their response to the incident was a bit cheeky, but “it reflects a renegade culture at our company that we pride ourselves in.”
The Sustainable Apparel Coalition & the Higg Index
Ridgeway was instrumental in founding the Sustainable Apparel Coalition, which seeks to reduce unnecessary environmental waste and benefit laborers and communities working in the apparel and footwear industry. The Higg Index provides the means for SAC members to measure and evaluate the sustainability of their products while identifying areas for improvement.
“It’s web-based and it allows us to see any of the facilities that we select to partner with to manufacture our products,” explained Ridgeway, “[and] where they are amongst the entire world. So you get immediate benchmarking to measure the sustainability of the social justice effort in the facility. And you can see where they stack up against everybody else. That’s really helped us out a lot.”
The Higg Index has now been adopted by over a third of the global apparel and footwear industry, including Adidas, Burberry, the Coca-Cola Company, Hanes, Ikea, Levi, Lululemon, Nike, Gap, H&M, JC Penney, Macy’s, Nordstrom, Target, DuPont and Walmart. All of SAC’s for-profit members pay annual dues to support the coalition.
Having a tool like the Higg Index on hand, said Ridgeway, has enabled Patagonia to prioritize its current and future investments. “[W]e can concentrate our capacity on the areas where there’s the most harm or where we’re weakest and we can manage and reduce those impacts and the footprints,” said Ridgeway. “And then we can measure our progress against benchmarks, and we’ve never been able to do that before, until now.”
Patagonia’s dedication to transparency and self-examination extends beyond its environmental philanthropy and into the offices of its employees.
“Let My People Go Surfing” Time
Patagonia employees enjoy some of the most flexible hourly schedules in the corporate world. Many workers are allowed to set their own hours and even encouraged to hike, play and exercise.
Neil Blumenthal, co-founder of Warby Parker, has described Patagonia’s commitment to not only profit but also its team and the environment as its “triple bottom line.”
“It didn’t come from any sort of analysis or surveys or formal study,” said Ridgeway. “It came from the fact – in the case of surfing – that the good waves only come when there’s a distant storm somewhere and the tide’s right and the storm’s just right. You can’t predict that. When the surf’s good, you gotta go surfing.”
But rather than simply give Patagonians time off to have fun, the company has chosen to soften the boundary between career and everyday life.
“So if the culture of the company is to support people’s passions about things other than just selling a bunch of clothes,” said Ridgeway, “that’s when you come up with a policy like that. It’s all connected to our history in the company of being a bunch of climbers and skiers and surfers. Those other parts of our lives are just as important as the work part.”
And the biggest part of that, said Ridgeway, is not even the surfing. The company’s headquarters in Ventura, California is studded with playgrounds and fields for its daycare center, so visiting its campus feels like visiting one giant family.
“It really feels that way,” said Ridgeway, his voice softening. “It deeply feels that way. And that in fact is what it is – a big extended family. And I would say that daycare is one of if not the biggest contributor to the culture here that we’ve developed over the decades at Patagonia.”
Ridgeway mentioned that one of the most gratifying things about being a part of Patagonia is seeing parents visiting their children during their lunch and playing with them on the campus.
This kind of attention and care to families, to employees’ lives outside selling clothes, is what Ridgeway believes to be the defining quality of future businesses.
“Especially with Millennials and the new generations that are coming behind the Millennials,” he said, “they’re only going to work for companies that have cultures like ours, who not just allow but are actually built around the commitment to living your life fully and thoroughly. That’s who they want to work for.
“That’s one of the central reasons why other companies should and do pay attention to what we do and follow our lead often. We’re proud of that. We always have time for other business people who want to come here and talk to us and learn how we’ve done it. And we’re very happy to do that, even with our competitors.”
In the Business of Making a Better World
For many years Patagonia has been funding environmental education in the communities it employs, always searching for ways to reduce greenhouse gas emissions and produce more organically. Its other sustainability initiatives include “Freedom to Roam,” which raises awareness for wildlife corridors in the Northern Great Plains and Eastern Himalayas; “Common Threads,” which reduces the energy, water and toxic substances used in its manufacturing processes; and the “Footprint Chronicles,” a program to make the company’s supply chain as transparent as possible.
Today, the corporate world is neither as ignorant nor as dismissive of their environmental footprints as they were in the 1970s. I asked Ridgeway if it seemed like other businesses were coming around to Patagonia’s way of thinking.
“It’s changing pretty quickly,” he said. “The number of companies that are managing their companies for sustainable outcomes is really snowballing. And that’s happened in the last four or five years. We’ve really seen that shift, whereas in the ‘70s or ‘80s we were kind of out there almost on our own. There were only a few companies that had the concerns that we did. They were Ben & Jerry’s and The Body Shop and a couple others – half a dozen at the most. But now there’s hundreds.
“And as you know, the population’s slowly starting to get more concerned about the emissions as well.”
But it’s becoming easier to care about sustainability, he said, when the effects of blind development are visible in your lifetime.
“I’ve been committed to that since the ‘80s, through mentors like Yvon and Doug Tompkins, to become more and more aware of the degradation that was around me. And I didn’t even need mentors because you could see this stuff with your own eyes. You could track the retreat of glaciers over time – you know, actually see it happen, or go back to a place where you hadn’t been for 10 or 15 years and see what once had been maybe a giant undeveloped grassland in Patagonia now developed into a full town, even a little city, in your own lifetime.
“So when you see these things happen,” said Ridgeway, “and you see the places that you love so much degrade right in front of your eyes, then you’re motivated to try and do something about it.”