case study good growth at patagonia

Patagonia shows how turning a profit doesn’t have to cost the Earth

The clothing industry accounts for a significant share of global greenhouse gas emissions and wastewater. Patagonia chose to tackle this environmental footprint head on. Its mission statement, “We’re in business to save our home planet,” reflects its core values of quality, integrity, environmentalism, justice, and being unfettered by convention.

Yvon Chouinard, who is also an environmentalist, philanthropist, and adventurer, chatted to McKinsey’s Tony Hansen about the company, which has its roots in his love for the outdoors and mountaineering. In 1973, he started making and selling mountaineering gear when he noticed the equipment he was using was damaging rocks, and soon expanded into clothing. He is quoted as saying, “What we take, how and when we make, what we waste, is in fact a question of ethics,” a belief he has applied to Patagonia since its inception.

In 2022, Chouinard and his family transferred ownership of Patagonia to the newly created Patagonia Purpose Trust and the not-for-profit organization, Holdfast Collective. These two entities ensure that all of Patagonia’s profits go toward combating climate change and protecting underdeveloped land across the world.

Not only a mountaineer at heart, Chouinard is also a surfer, kayaker, falconer, tenkara fly-fisherman, author of his memoir, Let my people go surfing , and, in his own words, a reluctant businessman.

The following is an edited version of Yvon’s and Tony’s conversation.

McKinsey: You’re described yourself as a reluctant businessman, but it’s undeniable that you’ve also been a very successful one. Looking back, what are the one or two moments you’re most proud of?

Yvon Chouinard: Patagonia has time and again broken the rules of traditional business and proven we still can be successful. The average lifespan of a corporation currently is a little over 20 years, but we’re still here after five decades of doing things on our own terms. I’m proud of our employees for getting us to this point. Our success is based on quality in whatever we do, and we’re taking that into the future.

McKinsey: How has Patagonia navigated the tensions of being a responsible company while managing growth and profit in a consumerist context?

Yvon Chouinard: We have to be cautious about growing too big. A company doesn’t last 100 years by chasing endless growth. There’s an ideal size for every business and, when companies outgrow that, they die. We know we have to be intentional in our growth to be around for another 50 years, so we’re focused on longevity, not expansion.

McKinsey: What are the core attributes of the culture at Patagonia, and how were these principles instilled in the employees and your suppliers?

Yvon Chouinard: Building the best product while causing the least harm is at the heart of what we do. A Patagonia employee is someone who can treat work as play, finds fulfillment in independence, and is obsessed with quality, whether that’s in a shirt or a store display. We spend a lot of time hiring the right person for a job or sourcing partners in business—so it isn’t so much about trying to “instill” our philosophy into a person as it is finding those who already share our values.

McKinsey: Patagonia has embarked on a long sustainability journey—organic cotton, a self-imposed earth tax, 1% for the Planet (to which members contribute at least 1 percent of their annual revenue to environmental causes), and ultimately the donation of your company. 1 “Putting people and planet over profits,” 1% for the Planet, 2023. What is your conclusion as to when a company actually becomes sustainable or “nature positive”?

Yvon Chouinard: We can’t delude ourselves into thinking that anything we or any other business does is “sustainable”. The best we can do is minimize the harm we do to the planet. We’ll do what we can to clean up our own house and convince other businesses and suppliers to use cleaner energy and more responsible materials, but it’s a never-ending summit. The work is never done.

Building the best product while causing the least harm is at the heart of what we do. Yvon Chouinard

McKinsey: How can we engage corporations to accelerate the conservation and restoration of nature?

Yvon Chouinard: One of the best tools we have is to show that doing the right thing for the planet can be profitable. We’ve proven it for decades now. Customers are putting pressure on companies to take action, and that’s a good thing. Young people are voting with their purchases, and companies should recognize that customers are changing. They can see through the greenwashing. The climate crisis is an existential issue, so we’ll use our influence to join our communities in calling on the business sector to act.

Read more about Natural Capital and Nature

McKinsey: What was the evolution of making Earth Patagonia’s sole shareholder, and how do you hope this will influence corporate awareness and action?

Yvon Chouinard: We needed to find a way to put more money into fighting the environmental crisis while maintaining Patagonia’s values. There weren’t any good options available, so we had to create our own. The new ownership structure ensures the company stays true for another 50 years or more and uses the wealth the company generates to protect our home. After everything we’ve been through, I hope Patagonia can serve as a model for other businesses as they evaluate their own environmental policies, and that this company’s success is proof you can make a profit doing the right thing.

McKinsey: What would you advise every business leader to ask themselves every day?

Yvon Chouinard: Ask yourself why you went into business in the first place. What are you there for? When you establish values as a business and your employees care about your mission, everyone works harder.

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How Patagonia Became The Benchmark In Sustainable Clothing

Table of contents.

The trendy outerwear brand that is loved by millions didn’t initially start out in clothing but surpassed $1 billion dollars in annual revenue back in 2017, largely due to the brand’s environmental initiatives and popularity amongst outdoor enthusiasts. With its ever-growing evolution and creative business approach, Patagonia has evolved into a retail giant and advocate for sustainable business practices. 

Key Patagonia statistics showcasing growth over the last 50 years:

• On September 14, 2022, Patagonia announced its new corporate structure giving away 98% of its stocks on a non-profit
• 100% of electricity in its US facilities is from renewable sources
• 98% of Patagonia's product lines use recycled materials
• More Than 70 Patagonia Stores Worldwide
• #1 Market Share Holder in the Outdoor Apparel Market (near 10%)
• Spends less than $100 Million on advertising (digital and print)
• Since 1985, Patagonia has donated 1% of its profits to grassroots environmental groups (Sum: $140 Million)
• Over 2000 Employees Worldwide

Throughout the course of this article, we’ll cover Patagonia’s early influences and the history of how the brand came to be, as well as map out the attributes and executive decisions that built the billion-dollar eco-brand we all know and recognize today. 

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Passionate Rock Climber to No. 1 Climbing Equipment Supplier in 20 Years

Back in the 1950s, a young teenager by the name of Yvon Chouinard joined the Southern California Falconry Club . Through this club, Yvon developed a passion for rock climbing and it soon became a driving force in his life. By 18, Yvon was learning to craft and create his own rock climbing equipment, which soon grew to be a small backyard business at his parent’s house. 

Yvon taught himself to blacksmith, handmade each product, and was having incredible success with his small business. However, the demand for Yvon’s products quickly outpaced his ability to hand-craft each piece. In less than a decade, Yvon had formed a strategic partnership that allowed him to mass-produce effective climbing equipment. 

Just 13 years after Yvon began his blacksmith journey, Chouinard Equipment was the leading manufacturer of climbing equipment in the US . 

Growing up in a humble French Canadian family in America in the 1940’s, Yvon experienced hardship and escape that ultimately would contribute to his entire career and impact generations. While Yvon had no aspirations of becoming an entrepreneur, his drive for exploration and adventure drove him to create a career that adapted to his lifestyle. Throughout the early years of Chouinard Equipment, when Yvon was still hand-crafting gear, he would make products throughout the winter and curb his urge for adventure during the summer. This work-life balance value that so deeply plagues Yvon Chouinard would go on to serve as the progressive company culture mission that Patagonia’s employees benefit from today. 

Key takeaway

Yvon Chouinard’s decision to build a life around his passion would eventually lay the groundwork for the employee vision of Patagonia. While he was just a kid with no business experience, Chouinard’s ability to identify a problem or a hole in the market and develop a solution would serve as the product development approach for the two businesses he built over the following decades. 

Chouinard Equipment Adds Clothing to Their List of Specialty Outdoor Gear

When Chouinard was ready to expand his backyard business, he took his proposal to his friend, fellow rock climber, and engineer, Tom Frost. The two would create Chouinard Equipment, Ltd and begin to set precedents for the entire outdoor industry. Both passionate and educated, the duo began focusing more heavily on improving the quality and function of their products, obsessing over even minor details. Perhaps ahead of their time, Frost & Chouinard’s attention to detail and product quality would quickly drive Chouinard Equipment to the top of the industry. 

Product development & marketing 

It was in Chouinard Equipment’s first 1972 catalog that would set the beginning of the brand tone of Patagonia in the coming years. The first of its kind, the climbing gear catalog championed the planet and called on ethical climbing products that would not damage the mountains (as other carabiners did). The catalog was filled with inspirational quotes and thought-provoking information while marketing the climbing gear sold by Chouinard Equipment. 

Frost and Chouinard’s marketing approach worked better than expected and again, demand was becoming difficult to meet. While sales skyrocketed and the marketing achieved the intended effect, perhaps more notably important is the influence the educational approach had on consumers. The message effectively reached and resonated with the climbing community, causing many people to cite reading the catalog as a defining moment in their climbing journey. 

As the outdoor gear industry began to grow in the 1970s, Chouinard recognized an opportunity for expansion and so began the company’s experimentation with outdoor clothing and storefronts. By 1975, Chouinard was well on his way to expanding into textiles, but Tom Frost was not on board. The disagreement on the future of the company eventually led to the dissolution of the partnership between Frost & Chouinard and Chouinard began to take the company where he thought it should go.

Chouinard Equipment Product Development Timeline — 

The Great Pacific Iron Works —

First opened in 1973 with just 12 employees , the store is still up and running in Ventura, California, and is regarded as Patagonia’s first ever storefront. Here, climbers and outdoor enthusiasts could find a collection of highly-thought out textiles that were eco-conscious and perfect for the outdoors. 

Year after year, Patagonia released new styles of outdoor fashion pieces to be sold at Great Pacific Iron Works, and year after year the company produced a multi-million dollar increase in sales, reaching $5 million per year by the time of the company’s Chouinard Equipment incorporation in 1982 .

Patagonia Clothing Release Timeline —

After the incorporation of all three companies in 1982 (Patagonia, Chouinard Equipment, and Great Pacific Iron Works), the outdoor gear giant continued to lean into its missions of “clean climbing,” sustainability, and environmental protection. Through the rest of the decade, innovation of product design and increasing sales would inspire big changes for the future of Chouinard Equipment and Patagonia. 

Chouinard’s initial decision to implement environmental messaging into the Chouinard Equipment catalog would serve as Patagonia’s entire marketing strategy in the years to come. Not only did his messaging leave a lasting impact on readers of the catalog, but it spurred eco-conscious product development that is the leading priority—and cause of success—of Patagonia today. 

Rapid Growth and Bankruptcy for Chouinard Equipment

Since the formation of Chouinard Equipment, it was apparent that the company leadership would be a unique participant in the market. The first American outdoor gear supplier of their kind, Chouinard went on to lead with fearless abandon. In an effort to draw attention to climate change in a time where no one had really done so, Chouinard began to use his company in conjunction with that mission. 

This strategy applied for Patagonia as well and has grown as much, if not more, success as it did in the 70s & 80s when it was first implemented. Even before full-fledged environmental efforts were a prominent part of the company culture, innovation was present. After Chouinard’s success in tool design, he went on to develop cutting edge, sustainable clothing options that no one had really seen before. 

With his creativity came the Patagonia color integration of the 1980s. Throughout this time, Patagonia ran a color campaign where every style was available in vibrant color options. The line featured knockout colors like teal, seafoam, deep red, and powder blue. In these busy years of product supply and demand, Patagonia’s sales had reached the millions and the company was named “ Fastest Growing Company” by Inc. Magazine . 

Due to unfortunate climbing accidents and company lawsuits, Chouinard Equipment was forced into bankruptcy . An investor group purchased the assets for $900,000, rebranded the company as Black Diamond Equipment, and Yvon Chouinard was free to focus solely on thriving Patagonia.

Despite the historical success Patagonia had over the last decade, they were not immune to an economic recession and the pitfalls that come along with it. By June of 1991, Patagonia had become Ventura, California’s fourth-largest employer . While the company growth was a clear indication of Patagonia’s success, it was a wake-up call for the company when they were forced to fire 20% of their entire workforce in July. 

As Patagonia worked to recover from the economic downturn of 1991, it did not lose sight of its commitment to environmental impact and continued to develop strategic partnerships with manufacturers that aligned with the Patagonia vision. Patagonia executives managed to rescue the company from near dissolution and emerged a stronger brand with a clear identity. Going forward, the company would lean heavily into philanthropic causes and sustainable product development. 

It was during this time that Patagonia would lead work culture and environmental initiatives that would separate the company from every traditional business—yet again—and mark the beginning of the climb to the retail giant we know today. 

While Chouinard Equipment was the first business of Yvon Chouinard, his decision to sell the company and focus on Patagonia contributed to the success of the brand through the 80s. 

With bold industry moves like the Patagonia color palette introduction that still has a strong presence in the brand today, the company gained great recognition in the apparel industry. 

Patagonia's Commitment to the Environment and its Employees

Patagonia had been making progressive decisions since its founding but as the years went on, it became clear that the company would continue to enlist progressive initiatives and make it apparent that they care about their teams and their planet. 

Decades ago, environmental impact information wasn’t as easily accessible as it is today and while Patagonia was aware, the leaders of the organization began to become more aware of the environmental crisis. In the early 1970’s, a developmental debate arose in Ventura, CA that would demolish what was left of the Ventura River and threaten any wildlife that lived there. It was in a partnership with a young biologist to save the river that Patagonia became fully inspired and committed to becoming a revolutionary company that would try to save the world. 

The combined efforts of biologist Mark Capelli and Patagonia would form a community coalition to protect the Ventura River, called “Friends of the Ventura River.” The coalition is still in action today and receives conservation sponsorships from groups like Patagonia, the Ventura Visitors and Convention Bureau, and BioResource Consultants in Ojai. 

Patagonia’s commitment to the environment

In 1986, the company made its first sustainability commitment. With this initiative, Patagonia pledged 1% of total sales or 10% of total profit each year would be donated to environmental non-profits and advocacy groups. Nearly 40 years later, Patagonia has honored this commitment each and every year, having donated over $100 million dollars to environmental agencies . 

While Patagonia does continuously donate a portion of its revenue to environmental causes, they don’t stop there. For decades Patagonia has sponsored grants, used its influence to inspire change, and championed grassroots movements in an effort to contribute to environmental protection at every turn. 

Yearly, beginning in 1988, Patagonia also campaigns around a specific environmental issue to raise awareness and effect change. The first initiative was an effort to De-Urbanize Yosemite Valley, another was the Globalization of Trade. Patagonia has poured money and time into creating a widespread education campaign on various environmental impacts for the last 30 years, inspiring up-and-coming entrepreneurs to look through business with an eco-conscious lens. 

Today, Patagonia is connecting activism and activists by promoting relevant cause information on their dedicated campaigns webpage: Patagonia Action Works . With quick access to factual information about the supported causes and detailed information on how to get involved, Patagonia is compounding its ability to help the world by giving the tools to the masses. Currently, the brand is promoting the following education campaigns:

• Build Back Fossil Fuel

Spread awareness about fossil fuels' effect on climate change and indigenous cultures. 

• 30 by 30 Resolution to Protect Nature

A commitment to legally protect 30% of our global land and water by 2030.

• Environmental Justice is Racial Justice

Commitment to invest in and amplify frontline groups. 

• Public Lands and Waters Are Under Threat

Coalition of Native American Tribes, Businesses, Conservation Groups, and Citizens to Unite Against Government Interference with Public Land/Water

• Support the Boundary Waters Wilderness Act

Spread awareness about copper mining and its toxicity. 

• Protect the Arctic and Stand with the Gwich’in  

Uniting citizens to protest development and oil drilling on the coastal plain of the Arctic National Wildlife Refuge.

By 1996, the company was making faster and more polarized movements in activism and environmental change. During this time, the company was the first to make the switch to all-organic cotton, as well as the first to use recycled plastic bottles to manufacture recycled polyester. Polyester manufacturing has a detrimental effect on the environment and is a large proof point in the debate against fast fashion. As of 2021, 84% of the polyester used to make Patagonia clothing is made from recycled polyester . 

In the same year, Patagonia opened a new distribution center in Reno that reduced energy use in the facility by more than half. A strategic deployment of capital into energy-saving components, combined with recycled or retrofitted materials led Patagonia to develop one of the most eco-conscious development builds of its time. 

Along with everything listed above, Patagonia also holds bi-yearly education conferences for activist groups. At the conference, Patagonia representatives share what they’ve learned about marketing, education initiatives, and strategic maneuvers that can help non-profits get more visibility and traction for their mission. The Tools for Grassroots Activists Conference is in its 12th year and “ mini” tools conferences have begun to take shape across multiple Patagonia locations. 

Patagonia’s commitment to employees 

About 10 years after Patagonia’s formation in the early 1970’s, Patagonia invested in an employee focused initiative that would set the tone for the entire company culture as the years went on. In 1983, Patagonia began to offer on-site childcare to their employees to improve their company morale. The initiative has been a long-time favorite perk of Patagonia employees and recent studies have shown that employee turnover is 25% lower when parents have children that attend the facility . Not only does the company focus on parent convenience and comfort, but they offer paid maternity and paternity care to all new parents. 

Not long after the first childcare program was introduced, Patagonia invested in an employee cafeteria in Ventura that served healthy and organic food options. The principles of Patagonia have always been to respect and care for their employees, as they do for their planet, furthering the authenticity and effectiveness of the brand. At this point, they had not only done well with marketing to convince customers of their mission, but they had started the beginning of a company culture that was encouraged to continue to grow in originality. 

Once the layoffs hit and Patagonia was in a particularly poor place, they began to invest more into their company culture and employee satisfaction—and the investment paid in dividends. While the 1991 layoffs were arguably the most difficult times the company has experienced, the lax and inviting culture got everyone through it. There were no office walls or strict dress codes, and company-sponsored ski trips were a token of appreciation from Patagonia to its employees. 

In an ode to his love of the outdoors and a working work schedule, Yvon Chouinard created a “ Let My People Go Surfing Policy ” at Patagonia that gives employees the freedom to enjoy the outdoors on a whim, as well as an alternating weekly schedule that gives each employee every other Friday off. 

Not only has Patagonia continuously shown their value for their employees, but at a time when the entire world was out of work and revenue during the lockdowns of 2020, Patagonia continued to pay their employees and only spoke to the collective responsibility of protecting each other from the virus. 

The company culture at Patagonia clearly works and is favored by the employees. The company has a surprisingly low employee turnover rate of only 4%— the national average is five times that and the majority of companies don’t make the effort that Patagonia does. With 46% of employees citing company culture as a workplace value , companies that struggle with high turnover rates would do well to learn from Patagonia. 

Patagonia’s decision to innovate even more after the 1991 layoffs led the company to more growth than it had ever seen, and the company continues to see that growth year after year. The brand’s early focus on ethics-centric business practices and open-mindedness set them apart from a generation of businesses and inspired the businesses of today to approach business with an ecological and social equity mindset. 

Patagonia Calls Out Inequity, Politics, and Unaligned Partnerships

Sure of their voice and their stance on the issues of the world, Patagonia has made it a point to speak out about the issues they believe in—even those beyond climate change. While this approach has worked for Patagonia for decades, executives are only recently beginning to understand that companies today must lead with purpose. Studies have emerged that suggest that 62% of customers want companies to advocate for social issues , which explains why Patagonia’s intuitive marketing style has been so successful. 

Patagonia has taken a refreshing approach to issues of politics and business partnerships, making it a point to release all unaligned connections from the brand. This means vetting manufacturing companies and ensuring that they comply with Patagonia’s commitment standards or writing a donation check for the amount of a tax break. 

Another area where Patagonia has not been shy to voice its stance on the matter is in politics. When Trump imposed a tax cut in 2018 that resulted in the company profiting $10 million dollars, Patagonia donated the entire sum to climate groups and deemed the tax cut “irresponsible.” 

In an effort to protect the conditions of migrant workers at Patagonia partner facilities in other countries, Patagonia has been working over the last decade to ensure that these employees are receiving fair treatment and conditions from the hiring process to every day on the job. 

Patagonia’s Social Responsibility Program requires that the brand stay true to its mission, and so do its partners. Whether it’s employee conditions or brand alignment, Patagonia has made it a responsibility to distance itself from partnerships that aren’t eco-conscious and speak out for issues that need a platform—regardless of the consequences. Patagonia doesn’t pander to those that don’t agree with the company’s business practices. After a Planned Parenthood donation in the 90s, the company received negative feedback from angry traditionalists. As the riled calls came in, reps at Patagonia informed callers that a $5 donation would be made to Planned Parenthood for every call .

Following the upheaval and political divide that was present in the entire year leading up to the 2020 Presidential elections, Patagonia took another bold step in activism as they creatively encouraged their customers to vote by embroidering it in their clothing. 

It’s displays of realism like this one continues to make Patagonia an icon in the retail world. 

The Patagonia Vest debacle 

As the brand grew, it began to evolve into a white collar leisure uniform of sorts. From pullovers to t-shirts, Patagonia offered a style range to men that hadn’t really been done before. Because of the high price point and the type of clothing Patagonia offers, the majority of the customer base has always been male . 

With the introduction of the fleece vest and its ability for the office, a “ Power Vest '' trend amongst middle-aged businessmen arose. Noticing this trend, Patagonia began to pull back and restrict its offerings to corporate clients, as the vest was becoming a symbol of something not quite aligned with any of Patagonia’s ongoing missions. 

The company stated it would be focusing on working with Certified B Corporations , or corporations committed to sustainable practices. This was a polarizing stance that may have cost them a considerable amount of revenue from past clients but Patagonia does not care. The health of the planet is the number one priority and Patagonia is setting precedents in the world of business relations— if you’re not prioritizing the planet, the company doesn’t want your business . 

Tin Shed Ventures

To further the reach of the retail brand and the Patagonia network, the company became a Venture Capitalist. In 2013, Patagonia, Inc formed Tin Shed Ventures, a venture capital fund that would invest in innovative start-ups that align with Patagonia’s mission to “save our home planet.”

With $20 million and only the goal of affecting positive environmental and social change, Tin Shed Ventures began to work behind the scenes to advance the Patagonia mission. 

To date, Tin Shed Ventures has nine partnerships with up-and-coming startups of all industries. 

• Wild Idea Buffalo —Raises 100% grass-fed buffalo in a way that restores the grasslands of the Great Plains.
• TERSUS Solutions —A water-less laundry solution that uses less energy.
• Bureo —Cleans up fishnets in South America to repurpose as valuable goods. 
• Cairnspring Mills —A milling company that contributes to farming and agriculture. 
• Beyond Surface Technologies —Swiss textile company that only uses raw materials. 
• Solar Funds —Solar panel company to reduce overall energy usage.
• Trove —Platform that encourages recirculating old apparel back into the economy.
• California Safe Soil —Creates organic fertilizer from supermarket food waste. 
• NuMat Technologies —Research company to optimize energy usage. 

It’s apparent that Patagonia is using every tool at its disposal to make real change across our communities and our planet. From simply speaking out to putting millions of dollars into an idea, Patagonia has seemingly left no stone unturned when it comes to the effectiveness of the organization.

Patagonia’s decision to speak out for the causes they believe in, as well as truly invest in and promote these causes, contributed greatly to the brand recognition of the company. By deploying capital into advocacy campaigns, the company has been able to effectively contribute to environmental and social issues, while gaining the intended results of typical ad spend. 

Patagonia Marketing Strategy & Success

Brand transparency, consistency, authenticity, purpose, and content are all important brand characteristics that are important to the modern-day consumer. Patagonia has managed to harness each and every one of these characteristics in its marketing. 

Because the Patagonia brand identity is so clear, marketing specialists have a semi-simple job when deploying marketing for Patagonia. As any marketer would tell you: a business must be clear about who their customer is. Patagonia has reached a unique level of customer engagement by having a product that is appealing to men and women, or athletes and business professionals, mainly because of the business itself and less of the product. 

By marketing its philanthropic efforts or running educational campaigns, Patagonia is deploying essential ad spend that serves a greater purpose. Similar to killing two birds with one stone, Patagonia is able to promote the causes they care about and gain brand recognition in return. 

Similar to all aspects of the Patagonia business, marketing is not an area where innovation and creativity have been left in the dust. The company makes use of all modern-day marketing techniques, from social media promotion to partnering with brand ambassadors, to investing in short films or tours. 

Over the last decade, Patagonia has taken steps to discourage consumerism, and oddly enough, the position has benefitted the company’s brand and sales image. In an effort to bring awareness to indulgent consumerism, Patagonia released a 2011 Black Friday ad that encouraged people not to buy Patagonia clothing or anything else they don’t need. Despite the plea, Patagonia sales did not falter and the retail powerhouse has gone on to donate 100% of Black Friday sales since 2016. 

Non-marketing ploys and a rejection of consumerism actually catapulted Patagonia into more success as loyal customers of the brand value the company mission and dedication to the planet. The decision to be a non-marketing company has made Patagonia more impactful and furthers the company’s ability to rally behind social causes. 

Patagonia as an Industry Role Model 

Patagonia’s not wrong about the planet and they haven’t been for the last 30 years. As awareness spreads and more businesses and individuals are making conscious decisions about where and how to shop, everyone should look to Patagonia for guidance on how to ethically live their lives. 

The brand and company's commitment to the overall mission of saving the planet is what has built the success of the outdoor apparel brand over the last several decades. Patagonia was implementing ethical business practices long before it was cool to do so and has made reducing the company’s footprint a priority. 

If more brands led with the clarity, passion, and dedication that Patagonia has, we would have a more engaged client base, a healthier planet, and more retail companies might be able to produce the success that Patagonia has. 

With the company hosting several initiatives through 2025 and 2030, it’s safe to assume that Patagonia will not be changing its methodology anytime soon—unless it’s to decrease energy usage and maximize its awareness outreach. 

An overview of Patagonia’s evolution

Learn from Patagonia's success

• Businesses with Purpose Behind Their Mission Make More Money 

Patagonia paved the way for purpose-driven business long before purpose-driven business was the trend and the preference that it is today. Patagonia developed the brand recognition, customer loyalty, and ultimately sales numbers that the brand has because of the authenticity, genuineness, and dedication that is apparent in everything that the company does. 

• Product Innovation Can Allow for Higher Price Points & Brand Value

Over the last 50 years, Patagonia has been committed to consistently designing products that lessen the brand's environmental impact. This diligence contributes to Patagonia’s ability to charge premium rates for the brand’s products, the overall revenue growth of the company, and brand loyalty as consumers trust that Patagonia approaches product development with intention and consciousness. 

• Anti-Marketing Can Have Positive Outcomes

Patagonia has had incredible success from its anti-marketing stance and rejection of consumerism. In a time when consumers don’t appreciate a hard sell, anti-marketing gives consumers a sense of realism and appreciation for brands. While Patagonia implemented one of the first anti-marketing campaigns with the “Don’t Buy This Jacket” ad, the continued spin of marketing through social cause awareness has furthered Patagonia’s brand recognition.

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How patagonia became the most reputable brand in the united states.

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A repaired and revived down jacket begins its second life.

Patagonia founder Yvon Chouinard didn’t give a damn what anyone else thought he should be doing. He had an irrepressible sense of adventure, a tireless curiosity to find a better way, an unwavering moral conviction to do what was right, and a selfless humility that made the whole package work.

As Patagonia celebrates its fiftieth anniversary, ranking as the most reputable brand in the US , Chouinard and Vincent Stanley, the company’s Director of Philosophy, have written a new book, The Future of the Responsible Company: What We’ve Learned from Patagonia’s First 50 Years . It’s an update to the book they wrote on the fortieth anniversary incorporating dramatic shifts that have taken place in the world and at Patagonia over the past ten years.

The coauthors in 1974

One significant change was a 2018 rewrite of their purpose, making it unequivocal: We’re in business to save our home planet . A second was Chouinard and his family putting their money where their mouth is. Rather than take the company public, they gifted 100% of their $3B fortune to the Patagonia Purpose Trust and Holdfast Collective to fund their deep commitment to the planet in perpetuity.

I didn’t know the details of Patagonia’s history until I read this book. It led me to read several other books about the company. As someone who studies and consults on leadership, and has written on the topic of making stakeholder capitalism a reality , the reading left me deeply inspired. We need more leaders with Chouinard’s guts and more companies with Patagonia’s constancy of purpose. The following are some of the stories and insights I found most compelling from the readings and a recent conversation with Vincent Stanley.

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Climbing Clean

Yvon Chouinard’s first test of environmental stewardship came years before he founded Patagonia. An avid rock climber, he was unhappy with current pitons on the market (iron spikes used to secure rope), so he bought a forge from a junkyard in 1957 and learned how to make his own. His chrome-molybdenum steel pitons were stiffer and stronger than their European counterparts and better suited for removal and reuse. The climbing community loved them. A few years later Chouinard Equipment was born in a shed in Burbank, CA. By 1970 it was the largest supplier of climbing hardware in the United States. However, that same year, Chouinard realized he had a problem. On an ascent up the Nose route of El Capitan he noticed the increasing damage pitons were doing to the rock as climbing gained popularity. Disgusted, he needed to find an alternative to pitons, yet at 70% of his business they were keeping him afloat.

Chouinard and his business partner, Tom Frost, made what would become a legendary decision to shift away from pitons. It foreshadowed many other decisions Chouinard would make over the next fifty years, each with a similar pattern: Come to grips with damage you’re doing, set bright lines about how you’ll shift your business to reduce that damage, then force yourself to innovate inside new constraints. In this case, the innovation was newly designed aluminum chocks that left the rock unaltered or “clean”. Crude versions of chocks had been around for years but were less known and trusted than pitons. To build trust in his new chocks, Chouinard used them to successfully climb the Nose route of El Capitan again. By 1972 the chock business was booming, pitons sales had become marginal, and he had redefined modern climbing.

Launching Patagonia

In the early 1970s Chouinard started selling climbing clothing for purely practical reasons. In those years climbers were still wearing sweats, cutoff chinos, and dress shirts, none of which were durable. On a trip to Scotland, he found corduroy fabric which made excellent abrasion-resistant pants, so he ordered some of it. He also found rugby shirts that were tough and had collars that kept his gear from cutting his neck, so he ordered some of those too. He soon opened a retail store in an abandoned meatpacking plant next to his office selling a variety of items he discovered on his travels. This gave Chouinard an idea: The higher-margin clothing business could support the lower-margin equipment business, which at the time was only earning a 1% profit. In 1973 this idea became Patagonia.

General manager Roger McDivitt and national accounts manager Cindy Nichols double as models for the ... [+] new polypropylene underwear, circa 1975

The textile industry in 2023 is recognized as one of the worst polluters on the planet, but in the early 1970s this problem wasn’t as clear as it is now. Back then environmental issues were largely considered the government’s responsibility. As long as businesses stuck to regulations, they didn’t think too much about the impact of their operations. While Patagonia did fight for environmental causes for the first fifteen years of its existence, it paid little attention to its own environmental footprint. That changed in 1988 when a faulty ventilation system in their Boston store forever transformed how they viewed their responsibility as a business.

The Cotton Lesson

Unbeknownst to the company, formaldehyde was being added to their cotton fabric at the mill to prevent shrinkage and wrinkling. The faulty ventilation system spread the off-gassed formaldehyde into the store, poisoning employees. The easy solution would have been to fix the ventilation, but Patagonia chose to see the incident as a larger wakeup call. Like the earlier shift away from pitons, they followed the same protocol: Come to grips with the damage, change your business, and innovate inside new constraints.

Stanley refers to this as “The Cotton Lesson.” Beyond the formaldehyde, Patagonia realized it knew little about where its products came from and how they were made, which was a problem. They decided to put their employees on a bus, 40 at a time, to see the conventional cotton fields in California’s Central Valley.

“The moment our bus pulled off Highway 99 you could smell the organophosphates,” Stanley recalled in a recent conversation, “which was a nerve gas developed in WWII, used in cotton fields to kill all living organisms. It smelled awful. There were no worms or other life in the soil.” The field trips left a stomach-churning, unforgettable impression on the employees. A company-commissioned study found that cotton wasn’t much more natural than nylon due to the heavy use of chemicals in its production.

At that point, there were no regulations against using conventional cotton and no customers asking for organic cotton. Patagonia didn’t care. They made the decision to stop using conventional cotton. It was another bright line they wouldn’t cross. That decision made the business more difficult for a for a few years as organic cotton was harder to source and tougher to spin. Margins shrank and growth slowed. Working with suppliers, they eventually innovated around those challenges. Now, decades later, they are moving to regenerative organic cotton which, beyond avoiding chemicals, decreases water use and tillage. This has created additional constraints that Patagonia is currently innovating to get around.

Freedom Inside Constraints

“In many ways the magic of Patagonia comes from the constraints we place on ourselves which are grounded in our deep sense of responsibility to do right by the environment and society,” Stanley told me. “We can't go to the Fashion Institute of Technology library and choose from 5,000 fabrics for the spring line. We have a couple hundred we can choose from. And we can't go to 1,000 factories to find the best price. We have less than a hundred that can deal with the problems we raise. We get to know these limited options very well. The constraints make us more resourceful.”

Solving a puzzle in the Forge, the home of Patagonia’s advanced R & D team, Ventura, California

Ironically, the constraints also create a sense of freedom. With boundaries and rules set, Patagonia gives employees latitude to be creative on how to play the game and improve performance. “We have a deep middle management culture,” Stanley reflected. “Yvon didn’t like running the business day-to-day and was away for six months of the year anyway. People got used to figuring things out on their own. That sense of agency remains all these years later. People speak up and find a way to do what’s right. It goes beyond our product teams and touches all corners of the company.”

Stanley shared a recent example. In 2018 a finance team was looking for a new warehouse site on the East Coast. After visiting a variety of undeveloped plots of land, the team decided they couldn’t take any of them. Virgin development didn’t fit with the ethos of Patagonia. They ended up finding an abandoned coal mine in Wilkes Barre, PA and made a deal to use that land with an NGO that was reclaiming it. While the deal was more complex than developing virgin land, it fit with the company’s values. “No one told the finance team they had to do that,” Stanley said. “They never even spoke to the tree huggers in the company about it. It was just built into our culture. They knew no one would complain about the several month construction delay because it was the right decision.” The new warehouse now sits on 22 levels of abandoned mine shafts.

Patagonia’s Most Important Product

Reading Stanley and Chouinard’s book makes you realize Patagonia’s most important product isn’t a piton or pullover, it’s an unflinching sense of purpose they’ve stuck to for decades. Much of its success can be traced back to Chouinard’s uncompromising leadership since Day One. Whereas many companies espouse a set of values only to sacrifice them under the pressure of quarterly returns, Patagonia has religiously stuck to theirs for the last half century, come what may. Quality, integrity, sustainability, and justice were never negotiable.

A Fair Trade Certified™ information display at the Patagonia Santa Monica, California, store

Stanley and Chouinard will be the first to tell you Patagonia isn’t perfect. Despite making tremendous progress, there’s a lot more work to do. Many of the mills they use are still fired by coal. Thirteen percent of the clothes they sell are still produced in non-Fair-Trade factories, and their fleece microfibers still end up in our water supply. Patagonia has no interest in greenwashing their efforts to make the company look good. They just want to continue finding ways to responsibly support our planet and its communities within a capitalistic system that has too often neglected both.

It stands to reason US consumers see them as the most reputable brand in the country.

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Leadership in action: Patagonia case study

Success in the age of disruption isn’t driven by the bottom line; it’s value driven and good leadership is at the heart of it. There is no better example than the founder of outdoor clothing manufacturer and retailer Patagonia, Yvon Chouinard, say Scott and Alison Stratten, entrepreneurs and authors of Unbranding: 100 Branding Lessons for the Age of Disruption 

In the age of disruption, leadership is more important than ever. Companies that are successful in navigating digital innovations have strong leadership guiding the way.

■ Leaders make decisions that guide practice. These often involve tough choices and run counter to the 'what we’ve always done' mentality.

■ Leaders take these decisions and create action. When decisions live only in mission statements and directives without action, brands suffer. In fact, they suffer more with the incongruence between mission and practice than they would otherwise.

■ Leaders take responsibility. When things go wrong, a true leader is out in front taking responsibility. They don’t shift blame, they don’t throw vendors and employees under the bus.

■ Leaders lead in their actions, not just in their words. Leading by example is an art, a continuous process, and the key to true leadership.

For us, there is no better example of leadership than the founder of Patagonia, Yvon Chouinard. Patagonia is a 40-year-old American company that manufactures and sells outdoor clothing. Mr Chouinard started out making pitons (metal spikes used in climbing) because the ones available at the time were for one-time use only. He taught himself blacksmithing and made pitons that could be reused in order to diminish waste and leave mountains as untouched as possible. His pitons became popular and his company grew, diversifying into other gear. By 1970, Chouinard Equipment had become the largest supplier of climbing hardware in the United States.

Changing environment

As the industry leader, he ended up having to make a tough call when the climbing world changed and his gear went from being seen as environmentally friendly and reusable to being considered an environmental villain. Climbing had become more popular and was concentrated into a few popular routes. With the same cracks having to endure repeated use of pitons, the damage was severe. Although this was not his intent starting out, Chouinard saw the damage and decided to phase out of the piton business. He acted out of his concern for the environment, even though the change was a huge business risk. Rather than defend his original stance, shift the blame, or ignore the problem, he acted, not only on paper but with decisive real-world action.

As with the pitons, Chouinard saw another hole in the outdoor market: there were no colorful, fashionable clothes for men. On a winter climbing trip to Scotland in 1970, Chouinard bought a rugby shirt to wear while rock climbing. Back in the States, Chouinard wore it around his climbing friends, who asked where they could get one, and his clothing company was born. He started making the kind of clothing he and his friends wanted—of good quality, durable, and fashionable. The company grew at a rapid rate until the summer of 1991, when sales fell during a recession. To pay off the company’s debt, management had to drastically cut costs and inventory and lay off 20% of the work force. This was a tough time for the company, and it taught Chouinard a major lesson. The company has purposely kept growth modest ever since—another tough business decision.

Since 1984 Patagonia has had no private offices, an office arrangement that can create distractions but also keeps communication open. The company has a cafeteria serving healthy, mostly vegetarian food and an onsite child-care center (one of only 150 in the country when it started) and offers flexible work hours and job sharing. Chouinard himself takes months off every year, months during which he is unreachable. “ People know if the warehouse is on fire, not to call me. What can I do about it? ”  He credits this and the success of the company’s flexibility on hiring energetic, independent workers who are encouraged to take time off to surf, to spend time with their families, and to make their own hours.

Strong purpose and values

Patagonia runs national environmental and educational campaigns. From early on, the company took a stand against globalisation of trade whenever it could compromise Patagonia’s environmental and work standards. We’ve never seen a company site with Patagonia’s level of transparency around manufacturing, including factory photos, details, and a global map of where all products are made, from material sourcing to manufacturing. Every year and a half it holds a Tools for Activists conference to teach marketing and publicity skills to the advocacy groups it works with. In 1996, all its cotton fabric was moved to organic cotton, and it actively continues the search for more environmentally friendly fabrics.

Perhaps Patagonia’s most important value is quality. While its clothing is expensive and well-made, it is also repairable, creating high perceived value. Rather than encouraging customers to buy new products, Patagonia provides repair guides so people can get as much use out of their clothes as possible. Customers can send in damaged clothing for free repairs or recycling. This spring, for the third year in a row, Patagonia’s Worn Wear College Tour visited campuses around the country. Students could bring garments, regardless of brand, in for repair—in a vintage wooden camper truck, of course.

Patagonia’s values aren’t only good for the environment, they’re good business. As with current trends in food, shoppers are placing a higher value on where their clothing comes from and how it’s made. They will spend 10% to 15% more on ethically produced clothing, according to Marshal Cohen, retail analyst at NPD Group. “The younger generation, in particular, is willing to pay for the responsibility factor, because they’re not buying as much stuff in the first place,” Cohen said. “ They want to buy things that are good for the environment and are going to last .” 

Alison’s grandmother always told her to have fewer clothes but they should be of high quality; we aren’t sure whether this is a younger generation value, but either way we love it. When clothes are cheap, they become disposable. Save your money for something that lasts. That’s what Grandma wanted, and she lived to be a very wise 99 years old.

Business as an agent for change

Patagonia became the first benefit corporation, back in 2012—a certification and a movement that provides a clear and dependable path for business leaders who believe business can and must be an agent of positive change in our troubled world. Rather than scrambling to respond to daily affronts with little strategy, benefit corporations embed their core values directly into their legal charter. As a result, the company can act purposefully at all stages of decision making, balancing transparency with the need to achieve reasonable financial gain while also taking deliberate action to create additional benefits for multiple stakeholders whenever possible. In other words, benefit corporations take real steps to ensure that business is good for people and good for the planet. The program eliminates the false choice between making money and doing the right thing .

To pass along their success to others, Patagonia recently launched $20 Million & Change, an internal fund to help “like-minded, responsible start-up companies bring about positive benefit to the environment.” As Chouinard explained: “Others might see Patagonia Works and $20 Million & Change as revolutionary business ventures; we think both are just next logical steps to doing business more responsibly. Economic growth for the past two centuries has been tied to an everspiraling carbon bonfire. Business—and human—success in the next 100 years will have to come from working with nature rather than using it up. That is a necessity not a luxury, as it’s seen now in most business quarters. We invite and encourage all companies to start to work with us in that direction.” 

Lessons from leadership

The lessons you can take away from Patagonia are lessons from Chouinard’s leadership. Embrace innovations that make sense, keep your values clear, and use them to dictate practice. Make tough choices, take environmental responsibility seriously, and lead by example—from hiring, to workplace design, to setting out expectations and responsibilities. When your values align clearly with your company’s activities, you are able to provide the kind of transparency that will set you apart. Success in the age of disruption isn’t driven by the bottom line; it’s value driven. Chouinard has said that since the recession, he has decided to start making decisions with the assumption that they’d be in business for 100 years, rather than looking quarter to quarter. How would your business actions change if you thought this way?

This is an edited extract from UnBranding: 100 Branding Lessons for the Age of Disruption by Scott Stratten and Alison Stratten (Wiley, 2017). Subheads added by ThePeopleSpace

Patagonia’s purpose-driven Marketing Strategy

If I ask you the 4Ps that set the tone for a company’s marketing success, you would swiftly develop a predictable acronym.  Edmund Jerome McCarthy’s 4 P’s  of Product, Price, Place, Promotion have been etched in marketing folklore. McCarthy’s 1960 book “Basic Marketing – A Managerial Approach” simplified the fundamentals of a marketing plan for managers.

This framework has remained a cornerstone of every marketing strategy taught in universities and B-schools. Brands and start-ups have also made it a part of their lingua franca. It is the go-to plan every time you put pen to paper for a business plan.

However, some companies have started to look beyond the basic structure of the 4Ps and still make their marketing efforts count. A few of these have become the talk of the town (err, the world). By this time, you may know which company I’m alluding to – yes, it is Patagonia.

This 48-year-old US-based outdoor retailer has upended the definition (or perhaps added a layer) through its marketing narrative. This narrative is based on the new 4 P’s – People, Planet, Purpose, Profits. Simply put, it is a purpose-driven philosophy that matches John Elkington’s  Triple Bottom Line  theory (It has 3 P’s: People, Planet, Profits) with brand purpose.

In 2021, a study on the reputation of corporations found that in the United States, Patagonia took the top spot with an index score of 82.7, which was based on consumer perception of the brand

A Brief about Patagonia

Patagonia is an American company that manufactures clothing and gear for outdoor and adventure sports. Founded by Yvon Chouinard in 1973, Patagonia has earned a reputation for its upscale clothing and its environmentally friendly initiatives. What started as a small firm that made tools for climbers now has gear for travel, adventure sports, and a range of outdoor activities.

Patagonia has become synonymous with the outdoors and environment-friendly initiatives, from humble beginnings in a shop near Ventura, California, to an  US$800 mn behemoth with stores in 10+countries . Recently, it topped the list among  apparel brands with the best reputation  on the Axios Harris Poll rankings (2021).

But how did Patagonia position itself as an activist company? What marketing strategies did Patagonia adopt to connect with consumers? Let’s find out.

Purpose Driven Marketing Strategy of Patagonia

Making anti-consumerism core of patagonia’s marketing strategy.

Businesses are built on making more goods, selling all they make, and earning maximum revenues. In the apparel industry, it is mainly the norm with fast fashion dictating terms. But have you ever heard of a company asking its customers not to buy its products? Never, right? Unless, of course, it is Patagonia.

The 2011 Black Friday edition of the New York Times Black caught readers by surprise. Patagonia published a  full-page ad  telling readers to not buy their products. The advertisement titled “Don’t Buy This Jacket”, explained why consumers should not buy the jacket shown in the image.

The ad explains the costs involved at various stages of the manufacturing process in making the product available to customers. It talks about how producing the best-selling R2 jacket requires 135 liters of water, enough for meeting the needs of 45 people. The advert also listed factors like the generation of 20 pounds of carbon dioxide in transportation, and that two-thirds of the jacket’s weight was lost to waste.

The primary purpose of the communication was to convince people to buy ‘only what’ they need and ‘only when’ they need it. The idea was to change people’s relationships with clothing, bringing conscious consumption to the forefront. The outcome of this advert was a 30% rise in sales post the campaign. Though it wasn’t the campaign’s main intention, Patagonia demonstrated that you can still make profits when you do good.

Repair what you Wear

Patagonia’s products are durable, and therefore, you wouldn’t have to replace them as often. Having said that, it doesn’t mean the brand encourages the purchase of new ones as the older garments are rendered unfit. The company launched the Worn Wear Wagon in 2015, a mobile repair shop traveling across the United States to mend clothing/gear and educate people on how to fix those on their own for free.

Even the website has a bunch of repair guides to empower consumers on the DIY (Do-It-Yourself) route.

We have lots of repair guides available, see if there's something in there that can help with a patch or repair: https://t.co/SPWlKmDun3 — Patagonia (@patagonia) April 25, 2017

As part of the worn wear program, customers get credits towards their next purchase of a new or used garment. Customers get credits when bringing their old items to the store (or selling those on the website). The company actively promotes buying used stuff as it  extends a garment’s life by two years .

The ideology perfectly aligns with its Common Threads Initiative (also mentioned in the ad above), which persuades people to care for the environment. This initiative is based on the 5 R’s, which mean –

Reduce – Make valuable gear that lasts longer. You don’t buy what you don’t need.

Repair- Help customers repair old gear and ask them to pledge to fix what’s broken.

Reuse – Find a home for a product that users no longer need. Pass the product to a person who needs it or just sell it.

Recycle – Take back old, unused brand merchandise from the customers. Avoid clogging landfills with Patagonia’s items.

Reimagine – Build a world where humans can take from nature only what they can replace.

This marketing initiative by Patagonia strikes a chord with environmentally conscious consumers and makes them come back to the company. It is a fine initiative to reduce environmental footprint, which also boosts retention of customers. And yes, it earns their goodwill too.

Storytelling through Short Films

Patagonia has a section called “ Patagonia Films ” on its website. These films bring real-life stories of challenges faced by people across the world in protecting their environment. The purpose of these video stories is to raise awareness about environmental problems and offer solutions for the benefit of individuals and stakeholders.

Such films inspire people to take action. They build an army of followers and people who spread the word. Once people understand the brand, they’re hooked to it. By telling stories that matter, Patagonia inspires change by being at the forefront of social and environmental causes. This boosts discoverability, and the customers feel an affinity with the brand too.

Walking the Walk with Brand Purpose 

Patagonia has been built around a philosophy of making the best products, causing no harm to the environment, and using profits to implement solutions to environmental crises. The enterprise has built itself as a thought leader in environmental protection, social activism, and sustainable practices.

Patagonia’s social media handles propagate care for the planet and amplify people’s voices who create a positive impact. Whether you look at YouTube, Facebook, or Instagram, you will find a consistent brand message which aligns with the purpose. You can see some of it in action below.

However, it doesn’t stop at promoting its values. It also takes steps to set things right where required. To this end, Patagonia even sued the then Trump Administration over its decision to withdraw its protected status of approx. 2 mn acres of land in Utah. In 2020, it even  suspended advertising  on Facebook and Instagram. This was done as part of a belief that the social media sites were doing little to stop hate speech.

View this post on Instagram A post shared by Patagonia (@patagonia)

Patagonia has embodied its brand purpose in its marketing strategy to everything it does – whether it relates to the sale of goods or taking a stand against the exploitation of natural ecosystems. When a brand champions a cause and walks the talk, it brings in customer advocacy & shores up authenticity too.

Final Thoughts

Patagonia’s marketing strategy has been the polar opposite of other popular apparel retailers. It has embraced a counterintuitive tactic that has reaped dividends in the long run with a loyal and ethical audience. High-quality products, inspirational storytelling, and care for the environment are its key differentiators.

Patagonia’s marketing success shows that brands must have a cause greater than growth, more prominent than profits, and fueled by honesty. When you do what you believe in and build a community around it, your customers will follow you all along the way.

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Award winner: Patagonia’s Sustainability Strategy: Don’t Buy Our Products

This case won the Economics, Politics and Business Environment category at The Case Centre Awards and Competitions 2019 .

Celebrating the win

Author perspective

Who – the protagonist.

Yvon Chouinard , Patagonia CEO.

Patagonia is a popular designer of outdoor clothing and gear for the silent sports.

Founder and CEO Yvon is a sustainability pioneer and was one of the first of a group of CEOs to commit 10% of their companies’ profits, or 1% of their sales (whichever was greater), towards charitable and environmental initiatives.

Patagonia placed an advert in The New York Times. It was a picture of one of Patagonia’s highest grossing fleece jackets, with the headline ' DON’T BUY THIS JACKET .' To reinforce this message, Patagonia detailed precisely why consumers should make smarter buying decisions to purchase only what they need in order to decrease the impact of consumerism on the environment.

Remarkably, their sales increased by 30%.

Patagonia is a North American company. Its founder Yvon was known for his rock climbing feats across the continent in the 60s.

The New York Times ran the advert in their Black Friday edition in 2011.

“Because Patagonia wants to be in business for a good long time – and leave a world inhabitable for our kids – we want to do the opposite of every other business today. We ask you to buy less and to reflect before you spend a dime on this jacket or anything else.” An excerpt from The New York Times advert

Despite making great strides, how could Patagonia truly achieve the goal of curbing consumerism to decrease the negative environmental footprint to which it contributes?

AUTHOR PERSPECTIVE 

Sharing ideas

Francisco said: “I am very honoured to receive another award from The Case Centre, and to know that through this award our ideas about business sustainability are being shared with many other fellow faculty and students around the world. This is particularly important today in which business must step up its commitment to build a sustainable society.”

A case of sustainability

Francisco continued: “Patagonia is a case of Sustainability Leadership. The vision of the founder of Patagonia is that through his business he can service the needs of his customers, make a profit and protect the planet.

“But not necessarily through growth…his idea “don’t buy my product…unless you really need it” is innovative and challenging. Mainly because he does not just promote consumption but also smart and ecologically minded-consumption. He is an example to follow.”

Asking the right questions

He added: “A lot has been documented about Patagonia and its founder Yvon Chouinard. What was needed was to write the story in a short and provoking fashion and formulate key questions from which students can think, debate and learn about a different way of thinking. The most important aspect of a successful case is the questions designed for the students. To craft good questions is ‘an art’.”

A different approach

He explained: “The case creates substantial debate.

“For too long many business students and business executives have identified business success with growth. Growth at any cost.

“Patagonia provides a different approach. They sell a product and reclaim it to improve it, or resell it, instead of suggesting to customers to buy the newest products. And their approach makes economic sense!”

Less is more

Francisco commented: “In my experience, long cases are less successful because it defeats the purpose of a case which is: a short story with provoking ideas and a new way of thinking, and good questions to make people think, debate and learn.

“Long cases are difficult to manage in class and provide too much information. Also, when a case is about a real-life story, participants become very engaged. When it is a fictitious situation…participants lose interest.”

Benefits of the case method

“I believe the case method is a fantastic tool to disseminate ideas and allow people to learn.

“The case method also provides faculty with an opportunity to synthesise his/her ideas and to make an effort to communicate clearly and succinctly with the purpose of providing learning opportunities for others.”

The authors

Zahir was a postdoctoral research fellow at IMD when he wrote the case.

Hear from Francisco

When we visited Francisco to present his award we took the opportunity to talk to him about his winning case. Watch what he had to say here.

The protagonist

Educators can login to view a free educator preview copy of this case and its teaching note.

View all the 2019 winners

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How Patagonia Leads the Way in Global Sustainability

Cathy Carpetta

February 16, 2024

In Kantar’s 2022 study, 94% of consumers aim for a sustainable lifestyle , with 49% associating sustainable products with their identity, and 57% stating that a brand's environmental efforts impact their purchasing decisions.

In a world where greenwashing and flashy marketing dominate, Patagonia marketing’s strategy stands out. The brand's journey towards sustainability and its bold stance represent its environmental and social commitment. 

Discover Patagonia's success and how it became the number one brand in terms of reputation among the top 100 visible brands in America .

1. Patagonia’s history: Innovating the outdoor apparel market 

In 1973, Yvon Chouinard, a rock climber, started Patagonia because he wasn't satisfied with available outdoor gear. 

Based in Ventura, California, Patagonia makes outdoor clothes and cares about quality and the environment. 

In 1965, aeronautical engineer Tom Frost joined forces with Chouinard, leading to the establishment of Chouinard Equipment in the industrial era. By 1970, they had become the first supplier of mountaineering gear in the USA.

Following a trip to Patagonia, the company changed its name to Patagonia in 1973.

“No longer can we assume the earth’s resources are limitless”

With 5.3 million Instagram followers , Patagonia is known for its commitment to reducing environmental impact. Standing out from competitors, the brand offers high-quality products with a minimal environmental footprint. 

Since 2011, Patagonia has been a certified B-Corporation, recognised for its sustainability practices. 

Patagonia donates 1% of sales annually, contributing over $100 million in grants and in-kind donations since 1985.

In 2023, the company is valued at around $3 billion and generates an annual revenue of $100 million. 

2. Patagonia’s campaigns: Sustainability, community, and beyond

2.1 patagonia's sustainability impact: advocacy against fast fashion and fostering loyalty.

When we look at why Patagonia is successful, we see it's not just about regular marketing. Patagonia made sustainability a part of who they are. Every product and campaign tells a story in their commitment to the environment.

Patagonia's marketing doesn't just sell products. It tells a story of purpose, eco-friendly choices, and community. Their transparent approach showcases each item's journey, celebrating artisans and the environment.

Let’s have a look at a few of their key campaigns!  

2.1.1 The “Footprint Chronicles”

This initiative allows consumers to trace the origins and impact of their clothes. Imagine buying a fleece jacket and being able to follow its journey, step by step, analysing its environmental footprint.

It's a clear way for consumers to be more aware of the environment.

2.1.2 "Don’t Buy This Jacket" campaign

Patagonia's impactful campaign challenged consumerism by urging mindful consumption, especially during Black Friday and Cyber Monday . Rather than promoting more purchases, it emphasised the durability of its products, encouraging customers to buy less and use items longer for environmental sustainability.

2.1.3 "Worn Wear" campaign

In a world dominated by fast fashion, Patagonia stands out by introducing its 'Worn Wear' initiative. 

Encouraging customers to send in their well-worn items for repairs, Patagonia confronts the disposable culture in the fashion industry. 

Worn Wear allows you to trade in and buy used Patagonia gear.

This represents a bold stance against the throwaway mindset. Patagonia highlights repaired items through events and social media, advocating for waste reduction and responsible consumption.

2.1.4 "Vote Our Planet" campaign

Before the 2018 U.S. midterm elections, Patagonia's "Vote the Environment" campaign closed stores on Election Day, underlining the brand's commitment to environmental activism.

2.1.5 "Buy Less, Demand More" campaign

Voir cette publication sur Instagram Une publication partagée par Patagonia (@patagonia)

Responding to the global climate crisis, this campaign urged consumers to buy fewer products and demand higher sustainability standards. It emphasised the need for a shift towards a circular economy and called on consumers to support brands prioritising sustainability and transparency.

2.2 Patagonia's political and ethical activism 

2.2.1 bold political stances against the trump administration .

In 2017, Patagonia showcased its commitment to environmental activism by taking bold political stances. When President Trump signed an executive order to reduce national monuments, including Bears Ears, Patagonia joined forces with Native American and grassroots groups to challenge the order in court. 

The company extended its political stance to product tags, with a limited-edition pair of shorts bearing the message "Vote the Assholes Out." 

2.2.2 Corporate branding ban campaign

In 2021, Patagonia went a step further in aligning its business practices with its values. The brand banned all corporate branding options. This decision aimed to uphold Patagonia's commitment to sustainability and environmental protection. The move resonated with the brand's identity, reinforcing the notion that actions speak louder than words in promoting a sustainable future.

3. Patagonia’s marketing strategy: UGC, ambassadors and documentary 

3.1 strong focus on ugc and dedicated community of ambassadors .

Despite selling clothing, the brand avoids direct product promotion on social media. Instead, it utilises multiple Instagram accounts – 11 certified and several unofficial but recognised – each catering to specific interests. 

This segmentation diversifies content while adhering to the principle of avoiding aggressive promotions. 

User-generated content (UGC) plays a central role, with athletes and enthusiasts sharing photographs across Patagonia accounts, fostering a dedicated community. 

Since its beginnings, Patagonia has focused on its community. The outdoor brand mainly relies on its community and communication. Patagonia nurtures its community by sharing a lot of information about its achievements, evolution, and programs through its website or online. It has managed to stay true to its core values from the beginning. 

Patagonia doesn’t pay influencers to promote their products. Instead, they collaborate with people, usually athletes or people who often partake in adventure sports, who share the same climate-conscious values as them. These people are Patagonia’s brand ambassadors.

These ambassadors are sorted into different groups based on what sport they play since Patagonia’s gear is also sorted separately according to sport, for instance, @patagoniaclimb and @patagonia_trailrunning. 

The brand, then, reshares the videos of their ambassadors being in their element while wearing Patagonia’s clothes. 

This type of indirect marketing works wonders because it is purpose-driven and is based on mutual values. Moreover, they get to fill their feed with unique content and value their collaborators in the process. 

Since each of the ambassadors are veterans in their respective fieldfields, and customers can trust their recommendations.

3.2 Communication and building community around environmental and social causes 

Patagonia encourages its customers to share their own stories and experiences related to the brand. They invite customers to send photos, videos, and testimonials about using their products in natural environments or memorable situations.

On its Instagram account, the brand almost exclusively shares inspiring stories from its customers around the world. This reinforces the feeling of belonging to a community that is committed and loyal to the brand.

3.3 Storytelling through documentary and short films

Patagonia engages in documentary production and community co-creation, positioning itself as an ecological media platform. 

Patagonia's marketing strategy now centres on engaging with the outdoor sports community through storytelling, collaborations, and long-form video content. Collaborations with respected members of the outdoor sports community, referred to as "Global Sports Activists," exemplify this strategy. 

By investing in content that tells unique and compelling stories, such as the documentary featuring trans climber Lor Sabourin, Patagonia continues to demonstrate its commitment to values beyond conventional marketing, establishing a lasting connection with its audience.

Patagonia's journey, marked by sustainability and authenticity, is highlighted through impactful campaigns like "Don’t Buy This Jacket" and "Worn Wear." 

The brand's commitment extends to bold political stances and a corporate branding ban. 

Unconventional marketing, focused on UGC and brand ambassadors, strengthens community bonds. Overall, Patagonia's success stems from its narrative, eco-friendly choices, and engaged community, showcasing a commitment to a sustainable future.

As Patagonia continues its commitment, how do you think the brand will improve its supply chain and evolve its engagement with loyal customers and the global community?

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Patagonia’s Anti-Growth Strategy

Earlier this month, a peculiar vehicle appeared on the streets of Manhattan and Brooklyn: a biodiesel-fuelled, reclaimed-wood camper that could have been a food truck selling vegan “ish” and chips. But instead of a meal, the truck was made to sell a message on behalf of Patagonia, the outdoor-clothing company.

The camper, dubbed Delia, was on a six-week cross-country road trip, repairing outdoor gear and selling used Patagonia products along the way. The amount of fixing that went on was humble in scale: ninety-three garments in New York City and about twenty-one hundred nationwide. The tour, which ended May 12th in Boston, is better thought of as the latest embodiment of the company’s ongoing campaign to encourage a national conversation about the threat posed to the planet by a global economy that depends on relentless growth and consumerism.

That conversation—despite being spurred, in recent years, by such figures as the author-activists Bill McKibben (a former staff writer) and Naomi Klein; the economists Robert Costanza, Tim Jackson, and Peter Victor; and the participants in a thinly spread “degrowth” movement—has so far failed to reach the volume even of mainstream Internet buzz. Yet anti-consumerism is clearly helping to build the Patagonia brand. Indeed, the company is seeing double-digit annual growth.

Rick Ridgeway, Patagonia’s vice-president of environmental affairs, told me that the company’s approach was inspired by a 2009 Times story he read about consumer spending during the last days of the Great Recession. The article noted that the financial squeeze was putting “value in vogue”—and not only in the predictable form of bargain hunting. Impulse buying and conspicuous consumption had slowed, and some shoppers were seeking goods that offered enduring worth, such as fuel-efficient vehicles and gardening tools that allowed them to grow their own food.

“That really caught my eye, because that is our value proposition. That is what we’re trying to deliver to our customers—those kinds of products,” Ridgeway said. “I thought, Wow, if at least some small cohort of people are recognizing that, then those people are our people, and how could we do a better job of giving them what they need to live more responsibly, not just in recession but any time?”

The company’s anti-materialistic stance ramped up on Black Friday, 2011, with a memorable full-page advertisement in the Times that read, “Don’t Buy This Jacket.” The ad’s text broke down the environmental costs of the company’s top-selling R2 fleece sweater and asked consumers to think twice before buying it or any other product. The attention the ad received helped to bump Patagonia’s 2012 sales significantly.

In September, 2013, the company launched its Responsible Economy campaign. In an accompanying essay (which, like the rest of the campaign's material, is no longer available at Patagonia.com but still can be read in Google's cache ), under a graphic that declared “growth is a dead end,” Ridgeway argued that global environmental crises such as climate change, toxic pollution, and resource depletion were only symptoms of a larger problem. Annual, compounded economic expansion, of the kind that the Club of Rome warned against in its 1972 book, “The Limits to Growth,” was the “elephant in the room.” Since Ridgeway published his essay, Patagonia’s own expansion has continued unabated: this year, the company expects to gross about six hundred million dollars.

All of this would be jet fuel for the engines of modern cynicism, if not for the fact that Patagonia, a privately owned corporation now in its fifth decade, has a distinguished record of environmental philanthropy and investment. The company has often made risky choices in favor of its ecological and social ethics, including early bets that consumers would pay more for products made with organic cotton or Fair Trade certification, the latter of which is now available on thirty-three of its products. The Responsible Economy campaign similarly backed talk with action. Patagonia is trying second-hand-clothing sales at its shop in Portland, Oregon, and has made product repair and recycling a growing part of its business model. It recently invested in Yerdle —a Web startup whose stated mission is to reduce new-product purchases by twenty-five per cent—as a way for people, and even the company itself, to swap or give away used Patagonia gear.

This spring’s truck tour was part of a related campaign called Worn Wear, which is an attempt to draft a new compact between Patagonia and its customers. The company promises to make products that endure, and to repair, resell, or recycle them as necessary, while consumers, in turn, pledge to buy only what they need, and to similarly steward their purchases from new garment to storied heirloom to the recycling bin.

It is confounding to try to draw lines around when Patagonia’s marketing encourages sales and when it discourages them. The gimlet eye will find no shortage of contradictions. Watch enough of the company’s promotional videos, which feature real Patagonia customers, and you might start to believe that the United States is mainly a nation of earthy, physically fit people who are handy with a framing hammer, enjoy rock climbing, and know their way around Bhutan (one Worn Wear spot depicts an actual mountain guide turned family farmer). But visit the company’s stores in locations like the Upper West Side, Hong Kong, and Chamonix, and you will also see the affluent recreational shoppers who helped to inspire the nickname Patagucci. Online, the company offers D.I.Y. garment-repair tutorials, produced in partnership with iFixit , but these also feature a thirty-dollar “expedition sewing kit” that resembles a prop designed for the Khaki Scouts in Wes Anderson’s “Moonrise Kingdom.” Click for more information on the kit and a typical marketing stratagem plays out: you will be offered six other Patagonia products.

Corporate-social-responsibility theorists say that successful activist companies go though a “sense making” process that renders their efforts meaningful both within the corporation and among its customers. In Patagonia’s case, self-inquisition was part of the campaign. Even two years ago, with the launch of the Responsible Economy concept, Ridgeway was publicly questioning Patagonia’s steady expansion. “Companies, including ours, are reducing the environmental footprint of our individual products but increasing the footprint of our company as a whole as we grow,” he told Adweek . To GreenBiz _,_ he said this: “It’s our hunch that all these sustainability innovations put together are not going to be enough to offset the continued increase in our human footprint that comes from this tie to growth.”

These days, the company is less ambivalent. “We’re not afraid of growth—we’re excited about it,” Adam Fetcher, the company’s director of global P.R. and communications, told me. Ridgeway was more expansive: “There is a point out there where our own growth is going to likely create more problems than it does solutions,” he said. “But as far out on the horizon line as we can see right now, we’re continuing to produce products that allow people to live a more responsible life with the apparel that they choose. As long as there’s a lot of other people out there that don’t do that, and that are creating more problems than they are solutions, then we should be growing.”

That narrative explains the Patagonia paradox: there’s bad growth, and then there’s good growth. An expanding economy driven by ever greater individual consumption of ever more disposable products is bad. In a more sustainable future, people will buy fewer things at higher prices, technological innovation will reduce the impact of those products’ manufacture, and the goods themselves will be made to last and then be recycled at the end of their useful lives. Since those are the kinds of products Patagonia is striving to make, and the kinds of relationships to products that Patagonia is trying to foster, then the more that Patagonia expands its market share, the better. The new economy must grow out from beneath the old one.

It makes sense—provided that is what’s actually happening. Company spokespeople say that Patagonia’s impressive growth over the past few years is explained by the fact that, like explorers in search of a lost tribe, they have made contact with a largely untapped market of sophisticated customers who support the brand’s anti-consumerism by thoughtfully consuming its products. “These new customers are the ones inspired by our approach with Worn Wear and other programs that stem from our values,” Fetcher said. Maybe so, but more conventional explanations are also available: for example, that the company is growing because it has expanded its reach (Patagonia has doubled its scale of operations in the past six years, and has opened forty new stores worldwide since 2011) and the impact of its marketing. Cognitive dissonance can cut both ways: it’s quite possible that Patagonia’s philosophy has attracted many shoppers to the brand without deeply affecting their buying habits, as suggested by the way that “Don’t Buy This Jacket” translated, for many, into “Buy This Jacket” in 2012.

Patagonia can’t say for sure if its growth is in fact the good kind or the bad. Fetcher says that they’ve had an “enormous outpouring of interest” from their customers, but that the company cannot currently provide any numbers on how many people are hanging onto their Patagonia jackets and board shorts for one more year rather than buying something new. Company records do indicate that Patagonia recycles about twenty thousand pounds of gear per year (roughly equal by weight to twenty thousand R2 jackets) and repairs some forty thousand garments; their Reno repair shop is the largest facility of its kind in North America. Given Patagonia’s sales figures, it is clear that the company repairs and recycles only a very small fraction of the number of products sold each year. Not a revolution at this point, then, though surely a significant gesture—corporate social responsibility’s version of propaganda of the deed.

Patagonia’s boardroom is now enough at ease with growth that they’re applying their business model in new directions. A foodstuffs division called Patagonia Provisions (shades of Wes Anderson again) aims to sell quality products that address the ecological consequences of farming, fishing, and livestock husbandry. So far, it’s small potatoes: “Just a tiny little million-plus-dollar business,” Ridgeway said. Products on offer are limited to sustainably caught Alaskan salmon; an organic toasted-grain-flour soup mix based on tsampa , the staple food of Tibet; and all-natural energy bars. “We are imagining a point out in the future where that business is probably going to eclipse the apparel business,” Ridgeway said, “because that’s where the biggest problems reside, and that’s also where the biggest solutions reside.”

A sense-making narrative survives only as long as it is believed, and it depends on being both true and perceived to be true. It is still the early days of Patagonia’s appeal to “good growth,” and the company’s core customers, sometimes referred to as Patagoniacs, appear to be patient. Lydia Baird, a student at the Fashion Institute of Technology who founded a campus cotton-muslin-composting project , was on hand when the Worn Wear truck made its Manhattan stop on the timeworn bricks of Greene Street, in front of Patagonia’s SoHo store. None of her Patagonia gear needed mending, but the repair crew was cool with patching a hole in a competing brand’s jacket, and they delivered her dad’s favorite Patagonia vest to Reno, free of charge, for a more complicated zipper fix. Environmentally literate, socially engaged, and with a clear sense that contemporary consumerism is a warm bath of contradictions, Baird is the shopper that Patagonia wants to be in business for—whether or not it really is.

“Their growth now is only positive in my eyes. The bigger they get, the more impact they can have,” Baird told me. “We definitely have to consume less, and there’s no way the world is going to be a perfect place. But maybe production can be done better. Maybe production doesn’t have to be a bad thing. And maybe Patagonia can lead us there.”

Patagonia Case Study: How to drive profit with purpose

“We’re in business to save our home planet.” – Patagonia  Mission Statement

When it comes to environmentally responsible brands, it is impossible to look past Patagonia. The US retailer is known for its outdoor and adventure apparel and its unwavering commitment to sustainability. Patagonia is an industry leader that has embedded preservation of the environment into its DNA. This is a brand that consistently leads corporate social responsibility trends. It intentionally creates products that last.

The question is: How does a business become a beacon for change? How can a brand truly drive profit with purpose?

In this case study we will examine the inspiring history of Patagonia.

The Patagonia brand story

Mountain climber and activist Yvon Chouinard founded Patagonia in California in 1973. Chouinard started with supplying climbing hardware before progressing into clothing. Like any brand, there were growing pains. One was finding the right fabric and materials suitable for outdoor adventure garments. The company spent much of the 80’s developing and improving the quality of its custom Synchilla and Capilene products. Patagonia also had to get design right and build a loyal consumer base. Other challenges included establishing its values and culture.

Growth happened rapidly but was put to a grinding halt when recession hit the brand hard in 1991. In response it had to let go of 20% of its employees. Patagonia learned the hard way how to scale a business in a more sustainable way.

The activist company

Environmental values were always a priority for the brand. The people behind the company were outdoor enthusiasts who had a close relationship with nature. From the early days Patagonia supported grassroots activism through donations. In 1986 the brand boldly committed 10% of profits each year to charity. Later it upped the ante to 1% of sales or 10% of profits – whichever was greater. This is a commitment the brand upholds to this day.

Patagonia moved beyond donations into creating educational campaigns highlighting environmental issues. Next it tackled the environmental impacts of production in its own supply chain. Ahead of its time, in 1996 Patagonia had reduced energy use by 60% through solar-tracking skylights and radiant heating. It also pioneered the use of recycled content and examined its use of toxic materials. It also switched to 100% use of organic cotton.

Significantly, it made environmental responsibility an ingrained part of the business since the 90’s. Patagonia faced hardships and made mistakes, but stayed true to its mission. Its commitment to innovating materials and creating environmentally friendly products has never wavered.

Patagonia now: A circular supply chain

In 2019 the United Nations named Patagonia a  UN Champion of the Earth . This honour was to recognise the business for its entrepreneurial vision and its commitment to sustainability and advocacy.

A circular supply chain is a circular ecosystem where products are designed to have prolonged life cycles. Within this ecosystem recycling and repurposing allows products to stay in use. Overall this system benefits the economical, social, and environmental sustainability of organisations.

Environmental and social responsibility

Currently, Patagonia runs a range of initiatives that support corporate accountability and a circular strategy, including:

• Transparency: Patagonia has  published its supply chain publicly .
• Carbon footprint:  It aims to hit carbon neutrality across its business by 2025 , including its entire supply chain. The company is actively investing in renewable energy and has incentives that encourage employees to drive less.
• Product lifecycle: Products are designed to be durable and multifunctional, increasing their length in use. There are also  ‘Worn Wear’  repair hubs that encourage consumers to repair items rather than buying new. Patagonia educates customers on how to care for garments to extend their lifecycle.
• Raw materials: The brand looks to use  raw materials  that are less harmful and are recyclable. Patagonia continues to invest time and resources into sourcing materials and  dyeing techniques and technology  that are less harmful to the environment.
• Recycled materials: The brand recycles used soda bottles, unusable manufacturing waste and worn-out garments into polyester fibers to produce clothing. It is aiming to use only renewable or recycled materials in all of its products by 2025.
• Activism: Patagonia still supports activism through  educational campaigns  for systemic change. It pays a self imposed ‘Earth tax’ where it donates 1% of non-profits fighting for environmental causes.
• B Corp certified: The business is  B Corp certified  and publishes annual scorecards.
• Social responsibility:  Patagonia supports fair trade programs  for workers. The 2020  Fashion Index Report  says Patagonia is one of few brands that disclose how many workers receive a living wage.
• Buy less: Patagonia has published several campaigns that actively encourage consumers to buy less!

Driving profit with purpose

In Chouinard’s business memoir,  Let My People Go Surfing , he explains that products come before profit: “At Patagonia, making a profit is not the goal, because the Zen master would say profits happen ‘when you do everything else right.”

Patagonia is a prime example of a brand that drives profit with purpose. It manages to simultaneously focus on brand purpose and generate millions yearly in revenue. Beyond creating quality products, it has prioritised its values and actively supported environmental causes. In doing this Patagonia has amassed a following of loyal fans.

Patagonia is a best-in-class example of a brand with defined values doing its best to reimagine a better world for all. Like any brand it has faced challenges and is not perfect but it has adapted and learned as it has grown. Patagonia is an example of what is possible when a brand leads from the heart.

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Patagonia CEO: A Force for Environmental Change

Rose Marcario is working to push the business world to stop prioritizing short-term gain over long-term environmental impact.

April 21, 2020

“We can have a regenerative economy.” Rose Marcario, CEO of Patagonia, said at View from the Top. “We’re going to have to have one. And the businesses that are working on it now will, I think, be the most successful.” | Stacy Geiken

Rose Marcario left the private equity world to lead Patagonia, the forward-thinking clothing retailer trying to save the planet with sustainable business practices and environmental activism. As CEO, she’s defied expectations by showing how a company can in fact have it all: profit, product quality, and environmental stewardship. “I think the foundation of the business is making a great product and then standing behind that product,” she says. “I don’t think that is in any way bifurcated from caring about our planet and our environment.”

At a Stanford Graduate School of Business View From The Top event in early February, where she was interviewed by Tara Hill, MBA ’20, Marcario discussed her professional choices and the foundational decisions that define a company’s culture and overriding mission.

Don’t Stick to a Path That Doesn’t Feel Authentic

Before joining Patagonia as COO and CFO in 2008, Marcario was the CFO of a public company and spent almost five years in private equity, a path she suspected wasn’t the right fit for her. “I could see that the buying and selling of companies made very few people rich,” she recalls, “and in most cases, hurt the actual workers and the people who had built the company.” While searching for a new direction, she met Yvon Chouinard, the founder of Patagonia, and was struck by his vision for the company. “Yvon had this model where he was basically saying you can have a great business, you can make quality product, but you can also do the right thing by the environment, by your employees, by your community,” she says. “That, to me, was the most holistic vision of business that I’d ever seen.”

A number of Marcario’s colleagues tried to discourage her from making such a drastic career change, but she knew that her experiences up to that point had prepared her well. “All of your life experience comes to bear in anything that you do,” she says. “It all gets incorporated if you’re a person who lives a holistic life.”

Profits and Purpose Are Not Mutually Exclusive

Patagonia has long distinguished itself through its commitment to environmentalism, but Marcario hopes that it won’t be a differentiator forever. “Everybody’s mission, every business’s mission, should be to save our home planet,” she stresses. “We need the rest of business to wake up and turn toward solutions and innovations and the things that will help us survive.” Step one, in Marcario’s view, is to relinquish the type of short-term thinking that pervades the business world. “Nothing important happens in a quarter. It’s such a weird system,” she says.

Quote I don’t want to think about what happened in a quarter. I want to look into the eyes of my employee’s child and say, ‘What’s going to happen in her lifetime?’ Attribution Rose Marcario

In response to those who argue that embracing long-term planning and sustainable business practices can hurt profits, Marcario’s track record has proven otherwise. During her seven-year tenure as CEO, she’s helped quadruple Patagonia’s annual revenue to reach over $1 billion — while doubling down on the company’s world-changing mission. “Business is changing, and we need different solutions,” Marcario says.

To that end, Patagonia has pledged to become carbon-neutral throughout its supply chains by 2025, sourcing only organic materials, continuing its policy to repair damaged products for customers, and recycling what can’t be repaired. Marcario believes that the businesses that will thrive tomorrow are those that innovate by adopting regenerative practices today. “To me, those are the businesses that will really make a difference,” she says. “We can have a regenerative economy. We’re going to have to have one. And the businesses that are working on it now will, I think, be the most successful.”

Cultivate a Supportive Culture

When she first arrived at Patagonia, Marcario was impressed that the company offers subsidized on-site childcare, which has translated to increased career success and lower turnover for female executives, managers, and employees. Having kids around also serves as a welcome and constant reminder to think long term, says Marcario. “I don’t want to think about what happened in a quarter. I want to look into the eyes of my employee’s child and say, ‘What’s going to happen in her lifetime?’”

Acting with intention and reflecting on what matters is encouraged at Patagonia, and Marcario credits its founder for creating a culture of living a “self-examined life” while at the same time remaining attuned to others. “We’ve become so polarized as a country in so many ways, and yet, there isn’t a whole lot of curiosity about why people are different or why they might have different views,” she says. In her capacity as a leader, she tries to model and promote both private reflection and interpersonal dialogue in moments of conflict.

Embrace Corporate Activism

Some companies are leery of taking a stand on political issues, fearing potential backlash or strain on their bottom line, but Marcario is proud that Patagonia’s corporate activism has grown into a cornerstone of its identity. She hopes their example will spur many more companies to take bold action on climate change. “These are issues that are our issues,” Marcario says. “If you’re business leaders, you can’t turn away from them and say, ‘I’m just going to go make a profit and forget about the fact that the planet is burning, or species are dying, or that there’s such gross inequity between the rich and the poor, that it’s not going to affect me.’”

She also hopes that Patagonia can continue serving as a bridge between consumers and environmental activism. In 2018, the company launched Patagonia Action Works , a digital platform that connects their community with grassroots organizations in the U.S. and across Europe. “A lot of our customers just want to know, ‘What can I do? Can I donate time? Should I donate money? What are the right NGOs?’ And so, we’re connecting them together, and it’s been really powerful.”

For media inquiries, visit the Newsroom .

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Patagonia: 'Earth Is Now Our Only Shareholder'

• Format: Print
• | Language: English
• | Pages: 22

About The Authors

Brian L. Trelstad

Nien-he Hsieh

Related work.

• September 2023
• Faculty Research
• Patagonia: 'Earth Is Now Our Only Shareholder'  By: Brian Trelstad, Nien-hê Hsieh, Michael Norris and Susan Pinckney

SustainCase – Sustainability Magazine

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Patagonia’s Sustainability Commitment: Creating Shared Value for the Environment and Society

Patagonia is a clothing and outdoor gear company that has become well-known for its prioritisation of sustainability in their supply chain and operations. The company’s dedication to sustainability can be seen through their use of environmentally friendly materials, responsible production practices, and support for environmental causes. Through their sustainability efforts and activism, Patagonia has created shared value for both the company and society as a whole.

Michael Porter’s concept of shared value describes a business strategy that creates value for both the company and society. In the case of Patagonia, the company has prioritised sustainability in their supply chain and operations, which has created value for the environment and society. By sourcing environmentally friendly materials and implementing responsible production practices, Patagonia has reduced their environmental impact and contributed to a more sustainable future. This focus on sustainability has also helped to attract environmentally conscious consumers, contributing to the company’s success.

Patagonia has also prioritised environmental protection and conservation through their activism. The company’s activism includes campaigns to protect public lands, combat climate change, and support sustainable agriculture. Patagonia’s sustainability action plan includes the 1% for the Planet programme, where the company donates 1% of their sales to environmental organizations.

Through their sustainability efforts and activism, Patagonia is also contributing to the achievement of the United Nations Sustainable Development Goals (SDGs). The SDGs are a set of 17 goals adopted by the United Nations to achieve a more sustainable future for all. Patagonia’s sustainability efforts and activism contribute to several SDGs, including Goal 12: Responsible Consumption and Production, Goal 13: Climate Action, and Goal 15: Life on Land.

Patagonia has created shared value by prioritising sustainability in their supply chain and operations, while also advocating for environmental protection and conservation through their activism. By adopting sustainable practices, Patagonia has reduced their environmental impact and attracted environmentally conscious consumers. Through their activism, Patagonia is also contributing to the achievement of the UN SDGs. Patagonia’s commitment to sustainability and environmental protection is a powerful example of how businesses can create shared value for both the company and society.

References:

Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard business review, 89(1/2), 62-77.

Patagonia. (2022). The Activist Company. Retrieved from https://www.patagonia.com/the-activist-company.html

United Nations Development Programme. (n.d.). Sustainable Development Goals. Retrieved from https://www.undp.org/sustainable-development-goals

Patagonia. (n.d.). Footprint Chronicles. Retrieved from https://www.patagonia.com/footprint-chronicles/

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Marketing Research

40.18 patagonia: a case study in sustainable business practices.

• Background: Patagonia, founded in 1973 by Yvon Chouinard, is an outdoor clothing and gear retailer known for its commitment to environmental sustainability.
• Mission: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
• Innovation: Patagonia has been a leader in developing sustainable fabrics and materials.
• Quality & Durability: Emphasizing long-lasting products to reduce consumerism.
• Recycling & Repairing: Offering repair services and encouraging recycling of products through programs like “Worn Wear.”
• Transparency: Publicly sharing supply chain information and environmental impacts.
• Activism Marketing: Taking strong stances on environmental and social issues.
• Community Engagement: Collaborating with NGOs and community organizations.
• Supply Chain: Focusing on ethical production, fair labor practices, and organic materials.
• Environmental Activism: Regularly donating to environmental causes and supporting conservation efforts.
• B Corp Certification: Patagonia is a certified B Corporation, aligning profit with purpose.
• Profit vs. Purpose: Balancing strong financial growth with a commitment to environmental and social responsibility.
• Investing in Sustainability: Reinvesting profits in sustainable initiatives and environmental causes.
• Market Competition: Navigating a competitive market while maintaining ethical standards.
• Scale and Growth: Balancing growth and scalability with sustainability commitments.
• Greenwashing Accusations: Managing perceptions and criticisms related to authenticity and impact.
• International Expansion: Adapting sustainable practices across diverse markets and cultures.
• Global Partnerships: Collaborating with global organizations to expand environmental initiatives.
• Employee Engagement: Fostering a workplace culture that aligns with company values.
• Leadership and Governance: Maintaining leadership that embodies the brand’s ethos.
• Influencing Other Brands: Patagonia’s practices have influenced other companies to consider sustainability.
• Industry Collaboration: Working with competitors on common goals such as responsible sourcing.
• Adaptation to Climate Change: Developing strategies to mitigate and adapt to the impacts of climate change.
• New Market Opportunities: Exploring new product lines and markets while adhering to core values.
• Conclusion:

Patagonia serves as a compelling example of a company that has successfully integrated sustainability, ethical considerations, and environmental activism into every aspect of its business. From innovative product development to bold marketing strategies and influential industry leadership, Patagonia’s case study offers valuable insights for those interested in business ethics, environmental stewardship, social entrepreneurship, and innovative brand management. The brand’s ongoing challenges and successes provide rich material for analysis and reflection on the future of sustainable business practices.

People are our only stakeholders: Reflections on Patagonia’s commitment to the planet

“ We want to be the ‘ Patagonia ’ of outsourcing ”.   David Sudolsky , Boldr’s CEO and Founder has set this as Boldr’s aspirational future state since its inception in 2017. In the decade where fast fashion and garment production was gaining notoriety in terms of poor supply chain and labor practices, Patagonia continued to emerge as the gold standard for ethical production and sustainable business practices.

Inspired by Patagonia Founder   Yvon Chouinard’s Let My People Go Surfing   philosophy, Boldr took a page out of Patagonia’s book and in the last three years have modeled some of the tenets of our Impact work in parallel. For instance, Boldr committed 1% of its quarterly revenues for community building initiatives. In 2021,   Boldr became the first global Business Process Outsourcing (BPO) company   to become a B Corp. Boldr integrated impact into its business model through its Theory of Change. All of these shifts dovetail into a larger more ambitious goal of creating a future where outsourcing can become a regenerative economic engine for redistributing wealth and opportunities globally. 

Earlier this year, Yvon Chouinard made   a groundbreaking commitment   to effectively transfer their ownership of Patagonia, worth around USD 3 billion, to the Patagonia Purpose Trust and a nonprofit organization designed “ to preserve the company’s independence ” and continue Patagonia’s mission to address climate change while preserving the environment globally. Reflecting on Boldr’s own journey towards becoming the “expectation and not the exception” in ethical and impactful outsourcing, four key lessons stand out from Yvon Chouinard’s recent unparalleled commitment to the planet:

Understand who your “real” stakeholders are

The rise of “ Stakeholder Governance ” as a model for “ identifying, engaging with and understanding stakeholder perspectives on key issues ” and integrating these perspectives in decision-making has paved a way for companies to be held accountable for who ultimately benefits or loses from their endeavors. Patagonia’s stakeholder philosophy identifies the planet as the company’s penultimate stakeholder as all the raw materials and inputs that were instrumental to the company’s success, as well as the sport that created the demand for climbing gear, can be traced back to the earth. Therefore, Yvon’s belief is that all the dividends and benefits must accrue to the planet as the main stakeholder and beneficiary.

From a labor value perspective in the BPO industry, Boldr’s ultimate stakeholders are “people” or the team members whose unique competencies and talent serve as the invaluable inputs that drive the success of the company. As people are the atomic unit of Boldr, we strive to ensure team members have a stake and voice in how the company evolves. Where ecologically conscious companies aim to leave their environment in a better state than when they left it, our commitment to an individual’s holistic growth and personal development keeps us from seeing our team members from a purely utilitarian lens.

Acknowledge your role in negatively impacting your direct stakeholders and identify how to mitigate this

Yvon’s journey as an apparel producing entrepreneur made him come to terms with the reality of Patagonia’s and the industry’s impact on the environment and to the climate. In his commitment statement, Yvon wrote: “ As we began to witness the extent of global warming and ecological destruction, and our own contribution to it, Patagonia committed to using our company to change the way business was done. ” In short, Patagonia acknowledged the harms it has caused and may have caused the planet if it had not made a decision to change the way it does business. This decision to shift was what catapulted Patagonia into becoming one of the most successful and most   socially responsible brands in the world .

David Sudolsky’s inspiration behind turning the outsourcing industry on its head stemmed from his own realization after establishing his first BPO company in the Philippines. He observed that in a traditional outsourcing arrangement, the worker segment is the most marginalized and vulnerable to exploitation while the parent or company often reaps the benefits of bigger profit margins from the global labor arbitrage. Boldr’s commitment to address this pattern in the BPO industry requires a strategic redistribution of resources and opportunities to improve the economic mobility of its team members and uplift families out of poverty. Boldr works in partnership with its clients to reduce barriers to decent work by creating alternative learning pathways to increase the employability of individuals who struggle with accessing traditional formal education. Boldr is striving to demonstrate that talent, when given the right tools and opportunities to thrive, can add value in the BPO industry.

Creating a healthy business and doing the right thing are mutually reinforcing

The business case for doing the right thing while maintaining healthy margins is at the crux of the discourse of how capitalism can be a force for good. The costs associated with adopting ethical supply chain practices, not compromising on the quality of the products, while implementing a living wage floor, investing in the upskilling of workers may be perceived as foregone profits or smaller margins. In most capitalistic spaces, the prevailing notion is that the costs of preserving the planet and people and sustaining profit are mutually exclusive or that companies must choose one over the other. 

Patagonia and many other successful companies have debunked the idea that profit and purpose are mutually exclusive and that choosing the narrow ethical and socially relevant path have actually yielded more in terms of profit for the companies in the long run, effectively offsetting the costs of doing business the right way. Yvon posited in his recent commitment: “ if we [Patagonia] could do the right thing while making enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way ”. Wealth accumulation was primarily a means for Patagonia to remain operational in order to continue doing more good and not the end itself. 

In Boldr’s context, making strategic decisions to build the health and longevity of the business contributes to having the financial resilience necessary to preserve as many sources of livelihood as possible especially in the throes of global economic uncertainty. Ultimately, establishing a healthy business that allows the company to do more good in the long run is proof that profit and purpose can be mutually reinforcing when the motivation do not contradict each other (i.e. focusing solely on profit maximization).

Why People are Boldr’s   only   stakeholders

Boldr’s journey towards setting the industry standard for ethical outsourcing must be seen in how accountable the company is towards its commitment to “help people grow and connect”. While companies like Patagonia have developed metrics to measure their impact on the planet as their primary stakeholder, Boldr is continually refining its material impact on its team members from a growth and fulfillment and holistic perspective. Boldr’s aspirations for “People” in the next three to five years includes materially lifting families out of poverty through the greater economic mobility and freedom acquired by our teams through our mission to help more people grow and connect globally.

Glo Guevarra is the Impact Manager at Boldr . She is currently taking up her postgraduate degree in Labor, Activism, and Development at SOAS University of London.

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• MANAGEMENT ACCOUNTING

Patagonia: A case study in managing a mission

• Management Accounting

Sustainability has driven innovation at outdoor equipment giant Patagonia for decades, ever since founder Yvon Chouinard reinvented fundamental mountain climbing gear to minimize his company's impact on the rock faces of Yosemite National Park.

The translation of those core philosophies into legal documents and measurable goals, as part of the formal conversion to a benefit corporation , has been a journey.

Crafting the mission: Initially, Patagonia questioned how — and in what level of detail — its philosophies should be ingrained in its benefit corporation structure, which was established in 2012.

Some advisers argued against committing to a higher level of specificity. But shareholders instead agreed on a set of commitments that, among other things, encourages sharing proprietary information with direct competitors to "produce a material positive impact on the environment," said Hilary Dessouky, the company's general counsel.

The company's leaders and shareholders "wanted it to completely memorialize, in a really impenetrable way, the things they cared most about," she said.

Patagonia's commitment to specificity now provides a backbone for some of the company's boldest decisions, such as encouraging contractors to provide child care for their employees or demanding that manufacturers in Taiwan return extorted fees to workers. The company also donates 1% of sales to environmental not-for-profits.

"It's really challenged the company to more publicly and more formally state the way that the company's evaluating itself," said Yvonne Besvold, the company's vice president of finance and treasurer. "It gives you that ability to really understand some of the resources needed and some of the changes that you're going to make."

Implementation and assessment: Patagonia dedicated a core team of four people to make regular reports on its stated benefit purposes. And the company regularly searches for ways to measure progress on its higher goals, which include designing products to be durable, multifunctional, reparable, and of minimal environmental impact — goals that require participation from the entire company.

The company examines its impact on workers, the community, the environment, and its customers. Patagonia employs a social-environmental responsibility team of 13 people who examine the impacts of the company's supply chain, including a focus on traceability, while up to 18 more people monitor the company's grants and community giving programs.

These people fulfill an audit role, but Patagonia often focuses on their subject-matter expertise in the hiring process. Many are trained in international relations, environmental science, environmental studies, or chemical engineering. "They're learning the skill and the art of the paper trail," said Logan Duran, the manager of Patagonia's B Corp and benefit corporation program.

That approach still leaves a lot of need for traditional financial professionals.

The role of finance: Financial professionals entering the world of benefit corporations have a twofold challenge: They must help create a rigorous, unified underpinning that can point the company toward its long-term goals. And they have to be a watchdog for the traditional financial objectives.

"We end up evaluating things, in a lot of cases, that a lot of companies would say, 'No way, that's crazy,'" Besvold said. "Sometimes you have to look for the long-term value in an answer. You have to understand the balance."

Here are some of the strategies Patagonia's leaders employ as they seek that balance:

• Use comparisons and community: Benefit corporations and mission-driven companies often demand unusual strategies of themselves and their partners. Patagonia has challenged suppliers to make bids that include the cost of providing child care and organic food for employees. Those can be tricky demands to make politely. The company's leaders are constantly asking, "How can we share our experiences to inspire other companies to want to do this?" Besvold said. It does that in part through a fair-trade certification program that pays premiums and allows workers to democratically decide how the extra money should be spent.

With each assessment comes another chance to raise expectations. For instance, the company found in 2015 that it was limited in its ability to universally analyze its global energy consumption and greenhouse gas emissions.

"We had been collecting the energy information — we just hadn't done much with it," Duran said. Patagonia now uses information from its global offices more effectively. "It becomes a mechanism to highlight where you may have an opportunity for environmental improvements," he added.

Patagonia, for example, has worked with the Sustainable Apparel Coalition to develop the Higg Index, a kind of "nutrition label" for clothing.

No matter the assessment, the key is to ensure that mission measures can be reliably executed. "It takes some of the subjectivity out of it," Besvold said. "You can't argue with a report card that says you've gotten D's for three years in a row."

Each one of those stakeholders has a veto," Duran said. In other words, Patagonia has designated specialists in its core missions and handed them real power.

Careful recordkeeping is critical. "They're coming with their supporting documentation," he said. "Often, there is a history: We audited this facility. We gave them these seven items, and they took no corrective action."

In addition to minding the balance sheet, a financial leader must also be ready to assess and present the nonfinancial benefits of a costly mission-oriented program, such as Patagonia's generous repair policy.

"We understand the cost of the program, we understand some of the benefits," Besvold said. "But the long-term story, the reason behind why it's being done, is where the company's really sinking our teeth."

Andrew Kenney is a JofA contributing editor.

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Green marketing: a case study of the outdoor apparel brand Patagonia

• Manuela Guerreiro University of Algarve
• Christina Muhs University of Algarve
• Mélanie Carvalho Neves University of Algarve
• Laura Engel University of Algarve
• Leandro Fernandes Cardoso University of Algarve

This case study will examine the main aspects of a Green Marketing strategy and give a concrete example of the outdoor retailer brand Patagonia. First of all, the relation of companies towards sustainability and the brand Patagonia will be introduced. Afterwards, the evolution of fast fashion and its change towards sustainability will be discussed. A short literature review will outline different definitions of Green Marketing. Subsequently, the Green Marketing strategy of Patagonia and two of its campaigns will be presented. Lastly, the discussion and conclusion will follow.

Chan, E. (2020). The fashion industry is using too much water — here’s how you can reduce your H2O footprint. In: Vogue. Available at: https://www.vogue.com.au/fashion/news/the-fashion-industry-is-using-up-too-much-water-heres-how-you-can-reduce-your-h2o-footprint/news-story/bdfea09be1ee1f28de0f32bfc10a71d4 . Accessed on 22/11/2022.

Cho, R. (2021). Why Fashion Needs to Be More Sustainable. In: Columbia Climate School. Available at: https://news.climate.columbia.edu/2021/06/10/why-fashion-needs-to-be-more-sustainable/ . Accessed on 22/11/2022.

Dolgui A., & Proth J-M. (2010). Pricing strategies and models. Annual Reviews in Control, 34(1), 101-110. https://doi.org/10.1016/j.arcontrol.2010.02.005

Seele, P., Gatti, L. (2015). “Greenwashing Revisited: In Search of a Typology and Accusation-Based Definition Incorporating Legitimacy Strategies”. Business Strategy and the Environment, 26(2). https://doi.org/10.1002/bse.1912

Greer J, Bruno K. (1996). “Greenwash: The Reality Behind Corporate Environmentalism”. Third World Network: Manila–Penang.

Gossen M., & Kropfeld M. I. (2022). „Choose nature. Buy less.” Exploring sufficiency-oriented marketing and consumption practices in the outdoor industry. Sustainable Production and Consumption, 20, 720-736. https://doi.org/10.1016/j.spc.2022.01.005

Henninger, C., Alevizou, P., Oates, C. (2016). “What is sustainable fashion?” Journal of Fashion Marketing and Management, Vol. 20 No. 4, pp. 400-416. https://doi.org/10.1108/JFMM-07-2015-0052

Hwang, C., Lee, Y., Diddi, S. & Karpova, E. (2016). “Don’t buy this jacket”: Consumer reaction toward anti-consumption apparel advertisement. Journal of Fashion Marketing and Management, 20(4), 435-452. https://doi.org/10.1108/JFMM-12-2014-0087

Kamprad, D. (2022). How Sustainable Is Patagonia? In: Impactful Ninja. Available at:

https://impactful.ninja/how-sustainable-is-patagonia/ . Accessed on 15/11/2022.

Kotler, P., Armstrong, G. & Opresnik, M. O. (2018) Principles of Marketing, Global Edition, 17th edition. United Kindom: Pearson Prentice Hall.

Kumar Kar, S. & Harichandan, S. (2022). Green Marketing innovation and sustainable consumption: A bibliometric analysis. Journal of Cleaner Production, 361, 132290. https://doi.org/10.1016/j.jclepro.2022.132290

Patagonia Inc. (2022a). Earth is now our only shareholder. Available at: https://www.patagonia.com/ownership/ . Accessed on 15/11/2022.

Patagonia Inc., (2022b). 1% For the Planet. Available at: https://www.patagonia.com/one-percent-for-the-planet.html . Accessed on 08/11/2022.

Patagonia Inc. (2022b). Don’t Buy This Jacket, Black Friday and the New York Times. Available at:

https://www.patagonia.com/stories/dont-buy-this-jacket-black-friday-and-the-new-york-times/story-18615.html . Accessed on 08/11/2022.

Patagonia Inc. (2022c). You have the power to change the way clothes are made. Available at: https://eu.patagonia.com/gb/en/buy-less-demand-more/ . Accessed on 15/11/2022.

Polonsky, M. J. (1994). "Green Marketing Regulation in the US and Australia: The Australian Checklist." Greener Management International, 5, 44-53.

Thangavelu, P. (2020). The Success of Patagonia's Marketing Strategy. In: Investopia. Available at: https://www.investopedia.com/articles/personal-finance/070715/success-patagonias-marketing-strategy.asp . Accessed on 15/11/2022.

Rauturier, S. (2022). What is fast fashion and why is it so bad?. In: Good On You. Available at:

https://goodonyou.eco/what-is-fast-fashion/ . Accessed on 15/11/2022.

Sanvt Journal. (2022). The meaning & history of fast fashion. In: Sanvt Journal. Available at:

https://sanvt.com/blogs/journal/fast-fashion-explained-meaning-and-history . Accessed on 15/11/2022.

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Responsibility and Sustainability. Socioeconomic, political and legal issues ISSN: 2340-5813 URL: https://responsibility-sustainability.org

Creative Commons Attribution 4.0  License.

Editors Dr. José Luis V´ázquez, University of León, Spain Dr. Luis Camilo Ortigueira-Sánchez, Universidad del Pacífico (Lima, Perú)

Head Editorial Office: IAPNM LATAM Avda. Alfredo Benavides 477 dep 1103, Miraflores Lima - Perú

Publisher: IAPNM LATAM - International Association on Public and NonProfit Marketing Latam Section IAPNM Representative for LATAM  Prof. Dr. Luis Camilo Ortigueira-Sánchez

Patagonia's Next Chapter: Earth is Now Our Only Shareholder

September 14, 2022 by Patagonia

Kicking off its next 50 years, the company is “going purpose” instead of “going public”

VENTURA, Calif. (September 14, 2022) — Patagonia announced new ownership today, nearly 50 years since founder Yvon Chouinard began his experiment in responsible business. Effective immediately, the Chouinard family has transferred all ownership to two new entities: Patagonia Purpose Trust and the Holdfast Collective. Most significantly, every dollar that is not reinvested back into Patagonia will be distributed as dividends to protect the planet.

The Patagonia Purpose Trust now owns all the voting stock of the company (two percent of the total stock) and exists to create a more permanent legal structure to enshrine Patagonia’s purpose and values. It will help ensure that there is never deviation from the intent of the founder and to facilitate what the company continues to do best: demonstrate as a for-profit business that capitalism can work for the planet.

The Holdfast Collective owns all the nonvoting stock (98 percent of the total stock), and it will use every dollar received from Patagonia to protect nature and biodiversity, support thriving communities and fight the environmental crisis. Each year, profits that are not reinvested back into the business will be distributed by Patagonia as a dividend to the Holdfast Collective to help fight the climate crisis. The company projects that it will pay out an annual dividend of roughly $100 million, depending on the health of the business.

Yvon Chouinard, Patagonia founder, former owner, and current board member said :

“It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder. I am dead serious about saving this planet.”

Patagonia will remain a B Corp and continue to give one percent of sales each year to grassroots activists. The leadership of the company does not change. Ryan Gellert will continue to serve as CEO and the Chouinard family will continue to sit on Patagonia’s board, along with Kris Tompkins, Dan Emmett, Dr. Ayana Elizabeth Johnson, Charles Conn (chair of the board), and Ryan Gellert. The Chouinard family will also guide the company’s controlling shareholder, the Patagonia Purpose Trust, electing and overseeing Patagonia’s board of directors. They will also guide the philanthropic work performed by the Holdfast Collective. Acting together, Patagonia’s board and the Patagonia Purpose Trust will work for the company’s continued success over the long term while ensuring it stays true to its purpose and values.

Ryan Gellert, CEO of Patagonia and Patagonia board member said:

“Two years ago, the Chouinard family challenged a few of us to develop a new structure with two central goals. They wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis. We believe this new structure delivers on both and we hope it will inspire a new way of doing business that puts people and planet first.”

The company shared the news first with its employees in a global town hall event on September 14, 2022. Soon after, the website Patagonia.com was updated to state that Earth is now our only shareholder and to include a letter from founder Yvon Chouinard.

Additional Quotes from Patagonia Board of Directors

“I first met Yvon when he was around 24 and today, he is almost 84. In all those years, his vision has never wavered. He wanted to do things his own way and on his own terms. And while he is in good health now, he wanted to have a plan in place for the future of the company and the future of the planet. I believe this plan that he and his family helped create is tectonic. It will make the company more competitive and its employees around the world will forever be empowered by purpose.” —Kristine McDivitt Tompkins

“Every time you read a new scientific report, it's clear the climate crisis is happening faster than we thought and it's worse than we thought. The stakes could not be higher. If we want to protect nature and support communities, businesses can’t continue to adhere to the prevailing economic model. Patagonia has been breaking the mold for decades, and now they have shattered it. Now I want to know, which companies will be next to step up?” —Dr. Ayana Elizabeth Johnson

“The current system of capitalism has made its gains at an enormous cost, including increasing inequality and widescale uncompensated environmental damage. The world is literally on fire. Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty. They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.” —Charles Conn, chair of the board“

“As founder of a company that has been in business for nearly 50 years, I’ve seen the positive and negative impact a business can have on its communities and employees. But while we and others do take meaningful steps to mitigate the impact we have on the planet, Patagonia’s new ownership structure introduces a new model that goes far beyond anything that exists today. And it’s true to form for my life-long friend and fellow environmentalist, Yvon Chouinard.” —Dan Emmett

Press images and illustration of Patagonia’s new structure: HERE Letter to Our Community: You can find a PDF version HERE Contact: For further information and interview requests: [email protected]

About Patagonia

We’re in business to save our home planet. Founded by Yvon Chouinard in 1973, Patagonia Works (“Patagonia”) is a certified B Corporation based in Ventura, California. A founding member of 1% for the Planet, the company is recognized internationally for its product quality and environmental activism. Its unique ownership structure reflects that Earth is its only shareholder: Profits not reinvested back into the business are paid as dividends to protect the planet.

Patagonia operates its apparel and equipment, food, and related businesses through the following subsidiaries: Patagonia, Inc. (apparel and equipment), Patagonia Provisions (food), Patagonia Media (books, films and multimedia projects), Fletcher Chouinard Designs, Inc. (surfboards), Tin Shed Ventures, LLC (investments), and Worn Wear, Inc. (used and upcycled apparel), and Great Pacific Child Development Center (onsite childcare and development).