Activist company supporting sustainable lifestyles and placing sustainability at the heart of its business model

Overview

The company Patagonia started out making tools for climbers based on a theme of simplicity and utility. Its mission statement echoes awareness that business creates pollution, “Build the best products, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” It tries to reduce pollution impacts in production and operation processes such as through using recycled materials like polyester and organic cotton, and renewable energy. It has also devoted resources to environmental issues around the world, and in so doing learnt about global warming. It became aware that different grassroots organisations and individuals are fighting climate change in their daily environments and tries to support them in their projects. To this end it co-founded “1% for the Planet” in 2002, a non-profit to devote 1% of annual net revenues to organisations working on environmental sustainability, especially at the grassroots level 1. On Black Friday 2016 it pledged 100% of the sales from its brick-and-mortar and online stores to environmental organisations (“100% for the Planet”).

Business as an instrument towards sustainability

Patagonia’s production follows its principle of “build the best products with no unnecessary harm”, and its products are designed to be long-lasting, of high quality and functionality with minimal impact on the environment throughout the supply chain. It also partners with customers in asking them take responsibility for the lifecycle of products through repair, reuse and recycling. In its operations, it also aims to minimise harm to the environment to reduce its impact on resources use of water and energy, and to reduce pollution from greenhouse gas emissions, chemical use, toxicity and waste generation. With the knowledge that in Japan only half of new clothes produced are purchased by customers – with the remainder either going to waste before selling or shortly after purchase – by producing the highest quality products it encourages customers to use them over the long term. It published an advertisement in the New York Times Black Friday in 2011 titled “Don’t buy this jacket” to enhance people’s awareness to avoid buying new products without thinking about the environmental impact.

In “Worn Wear: Better than New”, the website provides stories for the clothes people have worn as part of the people’s life stories rather than only a product 2. It promotes and guides customers to repair, reuse and recycle products to be in action for as long as possible and to share their stories related to use of Patagonia products. By connecting personal stories to worn products it is thought this creates a new kind of value by somehow enriching the product, thus making it more desirable than purchasing a new one. Patagonia products can be traded in at any Patagonia retail store for credit to purchase new or used items, with the worn items resold on their website. It also encourages and guides people as to how to repair clothes and sometimes supplements this through demonstrations in street-based and other events. Their repair service centre in Nevada sees throughput of over 30,000 items every year, and by extending the life of clothes it helps cut down on production and consumption of new materials, thus reducing resources, greenhouse gas emission and waste generated in those process. Such practices exemplify a new business model, which is opposed to the current one of mass production and disposal.

The Activist Company for sustainability

Patagonia considers itself as “The Activist Company”, and posits its mission of preserving and protecting the environment as the core of its business rather than as something peripheral to it. In addition to the grants it has been giving to support environmental organisations around the world in their activities, it also considers activism and advocacy as keys to achieving sustainability goals. Patagonia states that the chance of losing business along the way to achieving these goals, due to adopting attitudes that customers might not agree with, should not compromise its mission.

Under its 1% For the Planet initiative, Patagonia has donated 89 million USD in cash to support thousands of community-based grassroots organisations trying to improve their local environment[3]. The grants are distributed to hundreds of organisations that are normally very small in scale with less than five paid staff or entirely volunteer-run with 2,500 to 15,000 USD. The various environmental issues the initiative has supported to date include dam removal, restoring forests and rivers, finding solutions to and mitigating climate change, protecting critical land and marine habitats, protecting threatened and endangered plants and animals, and supporting local, organic and sustainable agriculture. Moreover, it has also trained thousands of activists to be more effective in the issues they are working on. It is currently involved in building a community through digital tools to connect individuals to those working on the issues they are passionate about, in a bid to build a movement towards sustainability in which each individual can play a bigger role.

Implementation

Despite the various challenges it faces the company has located environmental conservation as its core business objective, and its most critical challenge is to maintain its environmental mission while also producing the best products as a business. In its decision to design and produce products of the highest quality that can last for a long time, it also has to judge what the environmental costs are in following this principle. It also judges its suppliers for social responsibility, regardless of how technically adept they are. Its intention to source the cleanest technology such as renewable energy can also be challenge in consideration of its downtown store locations, which have limited spaces roof space for renewables installation. Thus continuing to pursue its dual goals of making the best and cleanest products represents a constant challenge for Patagonia.

Measurement and Impact

Fashion is a very resource-intensive and polluting industry, and contributes to 10% of global greenhouse gas emissions – it consumes more energy than aviation and shipping industries combined. To produce one pair of denim jeans requires 1 kg of cotton, which requires 10,000 litres of water. The fashion industry also generates 20% of global waste water and 85% of the textiles are landfilled or incinerated instead of being reused.

Patagonia has created impacts in multiple dimensions, of which that on sustainability has been expanding. Its business model emphasises ongoing efforts to minimise environmental harm while producing the highest quality products and encourages customers to use them for as long as possible. The financial and human resources from the business are utilised in supporting its environmental missions, such as from expanding its grassroots environmental conservation efforts to improve local environments into larger impacts to assist capacity building and advocacy to bring about more long-term changes. Moreover, the community it is forming to connect individuals with the issues they are passionate about creates spaces for collective efforts aimed at long-term movements to bring about transformational change in society.

Nevertheless, collecting accurate data to monitor its consumption of resources and the positive impact of its environmental efforts is a challenge, as the grassroots organisations it supports through grants lack the capacity to measure their own impact due to their small scale.

Scalability 

The company has grown its business over the past 45 years, and as of 2017 attracts an estimated 750 million USD in revenue. In line with its mission of producing the best while considering the environment, it is currently expanding from apparel into organic food, with the aim of changing the food industry. This it intends to achieve by bringing about a rethinking of the supply chain, to connect people with the sources of the food they consume. This movement in building efforts can inspire and empower more communities and individuals to scale-up Patagonia’s efforts to achieve its environmental mission.

Other businesses in the fashion industry are also committed to sustainability as a core component. Filippa K, a Swedish fashion brand, has been attempting to minimise harm to the environment in its production processes and make fabrics and products that can last a long time through efforts in designing, repair, recycling, and rental practices. Its motto “7 Pieces Is All You Need” encourages customers to create 18 different styles using seven key pieces of clothing to embrace the idea of “simplicity-as-luxury”. The company also supports and encourages new legislation to collect unwanted clothes in stores to extend the life of used clothes. Through joining the Global Fashion Agenda, Filippa K signed the 2020 Circular Fashion System Commitment, which is a commitment to implement circular design, i.e., collecting and reselling used garments and recycling used textile fibre[4].

Working with the United Nations, more and more fashion brands are starting to shift towards more sustainable production and consumption in the industry. The UN Climate Change organisation, along with the Italian Ministry of Environment and other partners regularly host Green Fashion Week to demonstrate more sustainable business models the industry can achieve, and during the UN Climate Change Conference in 2017 in Bonn, Germany, the industry announced its plans in support of the Paris Agreement goals[5]

Way Forward

The company’s commitment to its environmental mission has made it an inspirational leader on how business can act as a powerful instrument in support of the sustainable transition. Yet whether its business model will be replicated or adopted by other companies in the fashion industry remains to be seen. In the meantime, the case of Patagonia demonstrates how a business can act as a powerful instrument towards sustainability through its resources and platforms with the consumers.   


[1] https://www.patagonia.com/home/

[2] http://ungcjn.org/sdgs/pdf/elements_file_4001_en.pdf

[3] https://www.patagonia.com/home/

[4] http://filippakcircle.com/2018/04/19/campaign-focus-notthatcomplicated/

[5] https://unfccc.int/news/un-helps-fashion-industry-shift-to-low-carbon