Patagonia is Setting the Gold Standard for Corporate Social Responsibility and Sustainability

As the effects of manmade climate change increase in severity across the globe, brands the world over are coming around to the need for immediate action to mitigate their impact on the environment.

As the public becomes more aware of these issues – especially those belonging to the younger generations of GenZ and Millennials – they are increasingly choosing brands which embrace corporate social responsibility and sustainability to spend their money with which means prioritizing these ideals is not only good for the planet, but good for business as well.

However, not all brands are created equal in this regard, and some are much farther along in their corporate responsibility and sustainability journey than others. This is a particularly salient point when talking about the fashion business which can have an especially devastating environmental impact.

Patagonia

One brand in the fashion space which has been making serious waves in this regard is California based outdoor clothing retailer, Patagonia. Founded by Yvon Chouinard in 1973 and operating stores in over ten countries and factories in 16, Patagonia was built from the ground up with sustainability and corporate responsibility in mind.

Patagonia’s mission of sustainability begins with the materials it sources for its products. 87% of Patagonia apparel is made with at least some recycled material and its organic cotton comes from regenerative farming practices. Patagonia also uses factory floor-cutting scraps for a number of their products, ensuring as little material as possible goes to waste.

Another huge problem with the fashion industry is its reliance on cheap foreign labor – often in countries where labor laws are far less stringent, and workers are not treated or paid as fairly as they would be in the US. To combat this Patagonia requires all links in its supply chain to follow a strict code of conduct and conducts regular inspections to ensure it is being adhered to. Over 80% of Patagonia’s sewing is done through Fair Trade and a higher percentage of workers in its factories earn an internationally agreed upon living wage, compared to other apparel companies.

Patagonia also eschews the trend of fast fashion by ensuring all its products are hard wearing and long lasting. It’s Worn Wear product buyback program extends the life of clothing products by two years, buy selling used products on to other customers. This, combined with its recycling policies creates a circular economy of materials which drastically reduces the number of items which end up rotting in landfills.

"85% of clothing ends up in landfills,” says Patagonia on its Worn Wear portal. "One of the best things we can do for the planet is keep stuff in use longer and reduce our overall consumption. That means buying less, repairing more and trading in gear when you no longer need it.”

Non-profit

As if that weren’t enough, Patagonia went a step further recently when it announced it would be transforming its operation into an entirely different beast. Founder Yvon Chouinard, has transferred company ownership to a trust and non-profit dedicated to fighting climate change, sending reverberations through the business world in the process.

"Here’s how it works,” said Chouinard in a press release. "100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a non-profit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”

This move means Patagonia will be able to continually pump money into fighting the climate crisis. Compare this to going public, which can often mean even the most well-intentioned companies can wind up making decisions which prioritize short-term gain at the expense of long-term vitality and responsibility to meet shareholder obligations.

The other option would have been to sell the company and set up a new organization, but there’s no way Chouinard could have guaranteed a new owner would adhere to Patagonia’s values or keep its team of people around the world employed.

"It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started,” concluded Chouinard. "If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part. Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it.”

Final Thoughts

All but the most dedicated contrarians and fossil fuel lobbyists agree that the need for action on climate change is at its apex and that change must start with industry. Whilst companies such as Patagonia are far from perfect, it is clear it is making all the right moves to mitigate the harm the fashion industry causes.

Sustainability and corporate responsibility are sure to be part of the conversation at eTail Connect 2023, being held in April at the Hilton West Palm Beach, Florida.

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