Patagonia and environmental sustainability

[J.Dub]

A couple posts in Craig's thread about environmental sustainability in the outdoor industry in general made me think about Patagonia in particular (as an example).

Patagonia gives back 1% of sales or 10% of profits to environmental causes, whichever is greater. Patagonia is also generally regarded as selling some of the most expensive outdoor gear/apparel in the industry. (Not as bad as Dead Bird, but still....)

So, my question is this: are Patagonia's high prices -- and an assumed high profit margin -- a good thing for their environmental sustainability? I mean, more sales/profits means more money to donate to environmental groups, right? But it also means more money in shareholders' pockets, and, one would assume, more bonuses for management. Can a company that does well by the environment also do well by their shareholders (or vice versa)? Is is "right" to align their sustainability initiatives with sales/profits, or should they be promoting sustainability regardless of the bottom line?

I gave you a topic. Discuss...

 

[David Metsky]

Moderator Note
This is a thread about sustainability, not politics. Please restrict your comments to themes that are appropriate to this site.

 

[Stash]

A

So, my question is this: are Patagonia's high prices -- and an assumed high profit margin -- a good thing for their environmental sustainability? I mean, more sales/profits means more money to donate to environmental groups, right? But it also means more money in shareholders' pockets, and, one would assume, more bonuses for management. Can a company that does well by the environment also do well by their shareholders (or vice versa)? Is is "right" to align their sustainability initiatives with sales/profits, or should they be promoting sustainability regardless of the bottom line?

My view... It's the job of some entities (normally nonprofits) who's primary "busines" is environmentalism to promote sustainability regardless of the bottom line. It's the job of the providers of objects sold to sell those objects at enough of a profit to reinvest in manufacturing/design and to maintain enough prfit to draw investors. If profit making entities choose to use environmentalism as a marketing tool that is their choice and I see nothing wrong with it. If, however the environmental groups being supported are of a questionable nature from a non-profit view (eg. 90% administrative, 10% going to the actiual cause) then I'd say that's not appropriate. I am by no means saying Patagonia or any other company falls into category of sponsoring questionable non-profits, just that responsibility for truth in marketing should be followed to the end of the line..

 

[Snowflea]

From http://www.grist.org/article/little-chouinard/ Patagonia is a private company with just two shareholders, Yvon Choinard and his wife:

First of all, if they're a public company they can't do anything -- they're beholden to their shareholders. Patagonia is a private company, and the sole stockholders are me and my wife, so we can do anything we want. But if you're CEO of a public company, the board of directors tells you what to do, and the stockholders tell the board of directors what to do, so there's no way you can take a stance on anything controversial.

Lots of info on their website http://www.patagonia.com/web/us/home with which to educate oneself.

I love Patagonia, both their products and their business ethics, and know quite a few very, very happy employees. (Their main offices are in the next town over, Ventura.) Yes, they are pricey. Are their products worth it? To me, yes. They are, after all, "the greenest company of them all."

http://www.newwest.net/topic/article/the_greenest_company_of_them_all/C41/L41/

 

[Remix]

First of all, if they're a public company they can't do anything -- they're beholden to their shareholders. Patagonia is a private company, and the sole stockholders are me and my wife, so we can do anything we want. But if you're CEO of a public company, the board of directors tells you what to do, and the stockholders tell the board of directors what to do, so there's no way you can take a stance on anything controversial.

The statement may be true for Patagonia, but its not true in the general sense. Most, but not all, private companies are beholden to bankers. The owner's "cannot do what they want." if they wish to access to low-cost notes and lines of credit. Bank officers can require a certain sales figure, the introduction of new products by a certain date, or even that costs do not exceed a specific amount. If anyone of these requirements are not met, notes can be called in, interest rates can rise, and terms can become less favorable.

I remain cynical. I think Patagonia is able to charge high prices because their brand is established as being more valuable than clothing manufacturers who make the products of the same quality. At least part of Patagonia's sustainability campaign is to get free publicity so advertising costs can be reduced. I would not expect Patagonia or any other company to have a sustainability campaign unless it improves the bottom line.

 

[sierra]

I love Patagonia's clothes and have been a loyal customer for many years. Yes thier clothing is pricey,but the value lies in its longevity and functionality, which imo is second to none. As far as thier vision towards the enviorment, I beleive they remain true to that vision, as far as percentages of profits actually spent on said issues, I can only believe whatever that number is, its still quite an impact. Many companies contribute nothing whatsoever. Bottem line, I swear they are the best manufactuers of outdoor clothing and they have my support and loyalty.

 

[Bob]

from the patagonia website

http://www.patagonia.com/web/us/patagonia.go?assetid=37493#children


Does Patagonia work in countries, like China, that have poor human-rights and environmental records?
Some of the countries we work in, including China, have poor to mixed records for protecting both the environment and workers' rights. The U.S.'s record is better, but not as good – in some cases not nearly as good – as either the E.U.'s or Japan's. We've made the choice not to disengage from countries on the basis of their policies.

 

[Snowflea]

The remainder of the topic header--and a bit from the next--from http://www.patagonia.com/web/us/pata...37493#children

We believe in choosing factories wisely and in constructive engagement with others to lobby or work for change.

Patagonia alone cannot change the work culture or government policies of the countries we do business in. We do work with other brands that share our factories and we collaborate with NGOs and others trying to improve working conditions.

... There are countries with lower labor costs than these. But we only do business with factories that can assure us quality work on decent environmental standards and workplace conditions.

 

[cushetunk]

I remain cynical. [...] At least part of Patagonia's sustainability campaign is to get free publicity so advertising costs can be reduced.I would not expect Patagonia or any other company to have a sustainability campaign unless it improves the bottom line.

It's a given that businesses will make money.

To imply that environmental progress only comes with sacrifice does not seem likely to be a winning strategy in the long run.

 

[Dr. Dasypodidae]

The statement may be true for Patagonia, but its not true in the general sense. Most, but not all, private companies are beholden to bankers. The owner's "cannot do what they want." if they wish to access to low-cost notes and lines of credit. Bank officers can require a certain sales figure, the introduction of new products by a certain date, or even that costs do not exceed a specific amount. If anyone of these requirements are not met, notes can be called in, interest rates can rise, and terms can become less favorable.

I remain cynical. I think Patagonia is able to charge high prices because their brand is established as being more valuable than clothing manufacturers who make the products of the same quality. At least part of Patagonia's sustainability campaign is to get free publicity so advertising costs can be reduced. I would not expect Patagonia or any other company to have a sustainability campaign unless it improves the bottom line.

I think that you are wrong about Yvon Chouinard. I have known the guy since 1972, when he was manufacturing only pitons, carabiners, and related rock climbing hardware. He never made much money at that business, but I do not really think that it mattered to him. Chouinard Equipment was a labor of love. When he expanded his manufacturing base to fleece and other materials for garments in the 1980s, the money was there, but I still do not think that the money mattered to him. Hence, his leadership in the sustainability movement, decades before the term was coined, by donating a percentage of his profits to environmental causes. I just saw Yvon again last fall at a conference, and I came away believing that his ideals are as genuine as they ever were.

Another of my sustainability business heroes is Gary Hirshberg, CE-Yo for Stonyfield Farm. To make a business that depends on methane-farting cows carbon neutral was no small task, which led to Gary's leadership with his climatecounts.org website in prodding his fellow business leaders to push for carbon neutrality.

http://www.stonyfield.com/stirringitup/about.html

http://www.startingupgreen.com/inde...4-eco-entrepreneur-profiles/12-gary-hirshberg

http://www.climatecounts.org/

http://www.amazon.com/Stirring-Up-M...=sr_1_1?ie=UTF8&s=books&qid=1267491594&sr=8-1

http://www.amazon.com/Let-People-Su...=sr_1_1?ie=UTF8&s=books&qid=1267491661&sr=1-1

 

[Chugach001]

It's a given that businesses will make money. .

Unfortunately, you could not be more incorrect. I am working with one of the most socially conscious businesses in the country - whose product is known by everyone - and insolvent.

Because the CEO was busy pretending to be Jesus and not a CEO, the whole enterprise is on the verge of collapse. At the very best, small pieces will survive, hundreds of people will be negatively effected and they will lose 20+ years of progress.

Jobs help people.

 

[J.Dub]

Thanks for the interesting comments, everybody.

Just for the record, I'm not anti-Patagonia, nor do I think they should necessarily be put on a pedestal for their sustainability efforts (though it wouldn't be a bad thing, IMO, if more businesses factored sustainability and environmental awareness into their accounting...)

I wasn't thinking so much of China mfg, and all the associated baggage that goes with it, but in more general terms: is environmental sustainability something that we should expect (demand?) of our gear suppliers? If so, should we also expect/demand the same of the companies that produce our food, furniture, cars, movies and financial products?

At the end of the day, my hunch is that, while WE (the few...the stinky...The Hikers ) and other outdoor enthusiasts may place environmental sustainability higher on the priority list than the general population does, since there are a lot more of them than there are of us, our impact will probably be dwarfed by the masses' demand for cheap goods.

 

[cushetunk]

Unfortunately, you could not be more incorrect. I am working with one of the most socially conscious businesses in the country - whose product is known by everyone - and insolvent.

Because the CEO was busy pretending to be Jesus and not a CEO, the whole enterprise is on the verge of collapse. At the very best, small pieces will survive, hundreds of people will be negatively effected and they will lose 20+ years of progress.

Jobs help people.

A very good point.

 

[Tim Seaver]

I think that you are wrong about Yvon Chouinard. I have known the guy since 1972, when he was manufacturing only pitons, carabiners, and related rock climbing hardware. He never made much money at that business, but I do not really think that it mattered to him. Chouinard Equipment was a labor of love. When he expanded his manufacturing base to fleece and other materials for garments in the 1980s, the money was there, but I still do not think that the money mattered to him. Hence, his leadership in the sustainability movement, decades before the term was coined, by donating a percentage of his profits to environmental causes. I just saw Yvon again last fall at a conference, and I came away believing that his ideals are as genuine as they ever were.

Awesome. Yvon is THE MAN, and can do no wrong in my book!

Fun Hogs Never Die!

 

[Bob]

I'm not trying to bash Chouinard here...it seems that Patagonia just got too big to keep their same values.

 

[DougPaul]

Those of you who find this thread interesting may find "Let My People Go Surfing: The Education of a Reluctant Businessman", by Yvon Chouinard to be worth a read. http://www.amazon.com/Let-People-Su...=sr_1_1?ie=UTF8&s=books&qid=1267544587&sr=8-1

Doug

 

[Snowflea]

Coincidentally, the Patagonia Spring catalog arrived in the mail yesterday. The issue is dedicated to the "Stonemasters" of the 1970s, with some really cool photos and narrative.

To say, don't immediately throw this one into the recycling box.

 

[HAMTERO]

I agree w/Stinkyfeet!

 

[Tim Seaver]

Last month on WSJ:

The 'Fun Hog Expedition' Revisited

"180° South" tells the tale of the two road trips, with Messrs. Chouinard, Johnson and Malloy each contributing evocative text accompanying dozens of movie stills and gorgeous photographs.

The homage-trip is necessarily not as interesting as the original journey—the soul of the story remains the Ur-expedition. But the second outing does afford us an entertaining view of the colorful Mr. Chouinard 40 years after his first visit to Patagonia. He is a profane curmudgeon these days, a would-be savior of the planet, though it sounds as if he doesn't care whether humanity is saved in the process. The man who made a fortune by selling expensive outdoor wear—climbers sometimes refer to Patagonia as "Patagucci"—wears 30-year-old boots until they fall off his feet.

 

[sierra]

I did just get that catalog featuring the stonemasters, cool pics and makes me feel better as I still have my long hair I guess I cant move on yet.