Protest to protect Bears Ears National Monument, Salt Lake City, UT
Courtesy of Patagonia/Andrew Burr
As businesses and societies around the world are reeling from the coronavirus pandemic, the purpose-business community is calling for a systemic change to the way our economy sets its sole focus on profits and disregards quality of life or the environment. While companies and governments work to rebuild in this “new normal,” many business leaders are demanding an end to the myth that profits must come at the expense of purpose, caring, and environmental care. I have been inspired by this innovative leadership over the years, and believe that companies like Patagonia have a lot to offer as society demands a more equitable and just economy on the other side of the COVID-19 crisis.
Everyone from small, up-and-coming entrepreneurs to large, multinational corporations turns to Patagonia as an example: a business that stands by its bedrock values, provides high quality products, and isn’t afraid to use its voice in public. Its fleece vests even became part of the ubiquitous work-casual wardrobe—from Wall Street to Silicon Valley— until they decided such sales conflicted with their stance against over-consumption and in 2019 restricted new co-branding customers to “mission-driven companies that prioritize the planet.” While its annual sales top $1 billion, Patagonia remains rooted in a 30-year old mission statement, recently shortened to: “We are in business to save our home planet.”
To learn more about Patagonia’s values-driven work and particularly its decision to become a B Corporation, a corporate certification that assesses companies social and environmental impacts. I spoke with Vincent Stanley as part of the research for my upcoming book, Better Business. Stanley has been with Patagonia on and off since its beginning in 1973, for many of those years in key executive roles as head of sales or marketing. He co-authored The Responsible Company: What We’ve Learned from Patagonia’s First 40 Years with Patagonia founder Yvon Chouinard and more informally, he is Patagonia’s long-time chief storyteller.
Stanley shared examples of how Patagonia has evolved, especially over the last decade, when the company took sps to strengthen its governance by adopting the benefit corporation structure – a new corporate form whereby it can encode its values into its articles of incorporation. Subsequently, Patagonia became a Certified B Corporation in 2012 by completing the B Impact Assessment—examining its impact on customers, workers, community, environment, and governance—which Stanley says provides “the only really holistic look” of the company.
“That has made a huge difference,” he says, because the B Impact Assessment looks at “everything,” from ratio of CEO pay to that of the lowest paid worker to permeable concrete in the parking lots, and “gives people an idea of where they are and then this motivation to improve.”
Learn more in the following excerpts from my conversation with Stanley.
Patagonia is one of a number of well-known B Corps that has been a leader in taking public stances on a variety of important social and environmental issues. Is this something that will be expected from customers, given generational changes and expectations among Millennials and Gen Z?
1% For the Planet co-founder, Craig Mathews. Idaho.
Courtesy of Patagonia/Tim Davis
We’ve taken a real turn in the last few years. For about 30 years, we were a company that supported activists because we gave 1% of sales to small grassroots organizations. This was formalized with the creation of 1% Percent for the Planet which we were a founding member of. More recently, we made a shift to take a stronger public stance on issues that might be more controversial, but are issues that we’ve been involved with for 30 years. We know what we’re talking about, and we’re connected to the people who know more than we do.
That history and consistency is critical, particularly for larger companies. If it’s used as a marketing ploy, it’s just going to turn people away. But we have seen a change in generational values. Millennials and Gen Z are much more responsive than Boomers and Gen X to doing business with companies whose practices they value.
As Patagonia’s involvement deepens, especially after the election of President Donald Trump and his administration’s move to reduce the size of national monuments including Bears Ears in Utah, it also has become more political, with the potential to alienate some customers. Is that aspect seen as a business concern?
We were already so strongly identified with environmentalism and particularly with public lands issues, it was only a minimal concern. We had spent a lot of money and devoted a lot of time to helping to create Bears Ears as a national monument, which only came at the end of the Obama administration. When the Trump administration rescinded it, it was natural for us to join several Native American tribes in suing the federal government for removing protections for Bears Ears. When you look at what the federal government did in 2017 and 2018, and has continued to do—weakened the Endangered Species Act, almost every environmental protection is under threat—what we’re doing is part of a rearguard action against that.
We’ve shown how you can appeal to customers on the basis of your values as well as your products. That’s also true of the B Corp movement, and it points out a possibility for more businesses over the next 10 years to connect to people on the basis of values. That’s an unsung way to go about things. We’re all so afraid of talking about values because it supposedly puts people at odds with each other, but if you make the values deep enough, you connect to people—even with people you might disagree with.
Can you share a few examples of how the company’s stance and relationship with customers have evolved over time?
As we have become more of an activist company, the steps we’ve taken have mostly gained enthusiastic response from customers. One example is the Don’t Buy This Jacket ad in 2011 on Black Friday. It took a full vote of our board to let that ad go up because we were worried that it would actually hurt the business or that people would level charges of hypocrisy against us. They did, but it was a minority and many more responded with “OK, this is a good thing for a company to say. This resonates with me.”
In 2016, for Black Friday, we were all set to close the stores and encourage customers to spend their day helping environmental organizations. Then the Monday of that week, a mid-level employee came in and said, “We should keep the stores open and give 100%” to grassroots environmental groups.” By that afternoon, approval had been secured all the way up the line.
So in just five years, the process in the company had really changed: We didn’t need a vote of the board because everyone though it was a great idea. For Black Friday, we had predicted $2.5 million in sales, but we did $10 million. And more than a third of the customers were new.
The other parallel development over the past 10 years is that we’ve increasingly used the stores as community centers. As we’ve started to produce films and books, the stores have hosted more frequent public events that are tied into the local environmental community.
Patagonia Action Works is kind of an extension of that. We created a platform so people can look up their area of interest on the website, pair it with their location and get the names of environmental organizations involved. These are organizations we actively support and give money to. This is another expression of how we take our values or our particular environmental commitments and extend and engage the community. It is a natural extension of our company activism to help make a connection easily possible between interested customers and grantees.