Four Decades of Success
Yvon Chouinard never saw himself as a businessman.In fact, it is he who refers to himself as an "accidental businessman". Yet, this fortuitous businessman has architected one of the most successful and sustainable businesses ever to exist.Perhaps it was his love for mountain-climbing as a young boy, or the years he spent studying Zen Buddhism (a philosophy which preaches process, rather than result), but Chouinard established Patagonia, Inc. as a paragon of sustainability from the onset."Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis".Piece of cake, right? Well, actually yes, for Patagonia.Patagonia evolved into a clothing company in the late 1970s, when founder Yvon Chouinard - then avid mountain climber and designer of hiking equipment - introduced clothing to the loyal customers of his company, Chouinard Equipment, Inc. As one might suspect, clothing sales far surpassed climbing equipment sales.And in 1973, Patagonia, Inc. was born.Simplicity. Quality. Environment.At age 76, Yvon Chouinard lives a simple life. He tells the media he has been wearing the same Patagonia jacket for twenty years. In fact, he's quite plausibly the world's only owner of Patagonia's first-ever jacket, from 1973.Simplicity exists as a key component of Patagonia's success.Chouinard has often been known to quote 20th century French author, Antoine de Saint Exupery."In anything at all, perfection is finally attained not when there is no longer anything to add, but when there is no longer anything to take away, when the body has been stripped down to its nakedness".Patagonia's strategy has remained consistent - to design and market high quality, durable outdoor sportswear and equipment while concomitantly protecting the surrounding environment.Paradoxically, despite having crafted the paradigm of corporate sustainability, Chouinard maintains a pessimistic view regarding the environment. "I'm just looking at the facts. It's not an emotional thing with me. How to solve some of it is unacceptable. We're in denial about the real problems. But that doesn't mean I sit back and don't do anything."A Pioneer in Environmental and Social Responsibility:Today, Patagonia upholds the same reputation for social and environmental responsibility as it has since its origination. Let's take a look.The Common Threads Partnership: a collaboration with customers to reduce consumption.This initiative was launched in 2005 to encourage customers to adhere to the following five R's:
- Reduce - We make useful gear that lasts a long time. You pledge not to buy what you don't need.
- Repair - We help you repair your clothing. You pledge to fix what's broken.
- Reuse - We help find a home for Patagonia gear you no longer need. You pledge to sell or pass it on to someone who needs it.
- Recycle - We will take back your Patagonia gear that is worn out. You pledge to keep it out of landfills.
- Reimagine - Together, we reimagine a world where we take only what the planet can replace.
In 2011, Patagonia became California's first "benefit corporation", spearheading the growing movement of corporate commitment to consider environmental and social factors when making business decisions.“Patagonia is trying to build a company that could last 100 years,” - Yvon Chouinard on the day Patagonia incorporated. “Benefit corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission-driven through succession, capital raises, and even changes in ownership, by institutionalizing the values, culture, processes, and high standards put in place by founding entrepreneurs.”And, since 1985, Patagonia has donated one percent of its revenue (yes revenue, not profit) to grassroots environmental organizations. But they did not stop here. Instead, recognizing the importance of magnifying impact, the company has, to date, persuaded over 1,400 other corporations to join the "1 percent" initiative.Life as a Patagonia Employee:If you're in need or desire of a new job, you might want to consider a trip to Ventura, California, home to Patagonia headquarters. Flexible time policies enable employees to come and go as they please, allowing many to fulfill their passion for outdoor activities. Such outdoor activities have become a great bond between colleagues. In fact, if surfing or mountain-climbing is not one of your pastimes, you're likely eating alone in the (massive and fully stocked) cafeteria. And don't even consider working late hours - the building is locked, everybody out, at 8:00 pm (and weekends). Employees are not only allowed, but encouraged, to take two-month paid sabbaticals to pursue environmental projects and passions.Slacking off? Not in the least. Since 2008, Patagonia has doubled its size and tripled its profits, earning over $600 million in revenue in 2013.Patagonia epitomizes the notion that business is not zero-sum. In fact, profitability and sustainability depend on each other. To date, this is tilted. Generally speaking, corporations must have money to implement effective and broadly impactful sustainable actions. One could contend that sustainability is dependent on profitability.The reverse is simply not true. Yet.One need not be sustainable to be profitable. However, as information transparency increases in the market, as millennials begin to demand "more" from companies, as business leaders shift from profit-fiends to creators of simultaneous profit and impact, and as ESG investing becomes more important to portfolio allocation - you can expect some changes.This, in itself, is certain. The real question is when.