Why the sustainability industry needs to move on from Patagonia
Patagonia has both the substance and style worthy of a corporate sustainability golden child.
This substance lies in their outcomes. Patagonia became the first company in California to achieve B-Corp status in 2011. They have developed innovative materials with a lower carbon footprint and will repair pre-bought items for ongoing use. Not to mention that 84-year-old founder Yvon Chouinard has donated the entire business to Holdfast Collective, a non-profit tackling climate change.
The style lies in the Hollywood-esque narrative surrounding the company. This includes an enigmatic protagonist – founder Yvon Chouinard is described on Wikipedia as 'rock climber, environmentalist, philanthropist and outdoor industry businessman' – and a highly relatable industry – sustainable fashion ranks among electric vehicles and plant-based steaks as environmental value propositions. Their headquarters are just down the road from Hollywood's studios.
The issue of Patagonia, therefore, is not one of substance or style. It is one of surprise: Patagonia, through no fault of their own, is becoming old news.
With the corporate world lacking the imagination or effort to locate additional sustainability success stories, the safe but unimaginative example of Patagonia continues to surface.
A publication by leading consultancy McKinsey in April 2023 titled Patagonia shows how turning a profit doesn’t have to cost the Earth is just one recent reference. But it is one reference among many – among management consultancies, ESG analysts, business media, and more – that shows an industry still obsessed with the surfing brand.
And this is problematic when we consider the real target audience: business boardrooms. Most know the Patagonia fairytale. Further references risk a reaction not just of indifference among corporate executives, but also disillusionment.
We need more proof points of sustainability leadership. We need to find more Patagonias.
Patagonia has become the Usain Bolt of the CSR agenda: portrayed as a barely mortal freak of nature operating in a universe of corruption and drug cheating.
Over-usage of the Patagonia case study reinforces their image as a one-off anomaly to stand back and applaud. But this generates a sense of aloofness that could perversely discourage companies from even attempting to catch up.
Worse still, it could incentivize corporate ‘doping’ to do so. Last year, fashion retailer H&M faced a lawsuit among greenwashing claims via a liberal definition of ‘sustainable materials’.
Patagonia will continue to innovate and provide reasons for acclaim. Chouinard's bestseller 'Let My People Go Surfing' was first published in 2005, 17 years before the donation of his company to Holdfast.
But that does not mean they should remain the default case study. The sustainability industry should focus more on demonstrating that emulating Patagonia is not an impossible task.
One size fits all
Constantly citing the Patagonia model also lacks an appreciation of the company and industry-specific challenges facing businesses on their path to sustainability. In practice, there is much more variation and nuance.
Achieving Net Zero alignment is one example.
Broadly speaking, businesses can pursue one of two pathways: 'Reconfigure’ or ‘Relocate’.
‘Reconfigure’ involves removing the emissions intensity across the supply chain of the existing core business. This has been Patagonia’s pathway. Renewable-powered production facilities, high recycling rates in clothing, non-oil-based dyes. Other businesses may seek alternative strategies bespoke to their industry.
'Relocate’ sees companies divert revenue exposure to a new set of business operations more compatible with lower emissions. A fossil fuel power producer abandoning their coal plants in favor of developing wind farms is one example. An internal combustion engine manufacturer who transitions to producing EV batteries is another.
Critically, 'pathway' does not equate to 'option'. Some industries have no alternative but to pursue the more radical ‘relocate’ strategy in the absence of a viable ‘reconfigure’ route. There is no 'green coal' or ‘green petrol engine’, for example.
Excessive coverage of Patagonia reinforces a false perception that the route to sustainable operations is of equal complexity and effort to all companies. Where this is not the case, the analogy is undermined.
Lambasting heavy polluters from the sidelines with 'Why can't you just do a Patagonia?' lacks understanding of the distinct challenges they face.
But, perhaps most significantly, Patagonia is being placed on a pedestal of perfection that they neither welcome nor should be expected to live up to. For the existence of the quasi-superhuman – the ESG Usain Bolt – is not a belief that Patagonia themselves hold.
In a recent interview to discuss his new book, CEO Charles Conn highlighted a novel concept: that companies should not expect to always get it right. He invites businesses instead to see the pathway to sustainability as a journey rather than an end state.
“It’s one of the reasons why in Patagonia, we don’t actually say that we’re sustainable. We’re not.”
Patagonia may be the only entity that does not consider Patagonia sustainable, but there is logic behind Conn’s claims.
The more alternative examples of sustainable corporations we can draw upon, the more normalized their activities become and the more willing that other companies develop a culture of strategic risk-taking for sustainability benefits. Or, as Conn describes it when discussing his book, “a culture that recognizes that whatever we’ve achieved today, we’re gonna overthrow it tomorrow”.
The name of his book: The Imperfectionists. A title that encapsulates the Patagonia ethos sublimely.
The frequency with which Patagonia is held up as the embodiment of a ‘sustainable’ company underscores just how difficult it is to realize its accomplishments.
However, corporate sustainability is not an Olympic final, resulting in a single gold medal winner and a series of losers. It is a zero-sum game contingent on the entire field getting over the finishing line.
References to the Californian clothes brand lack novelty, relatability, or attainability.
Executives are tired of having Patagonia brandished as the reason why they should be doing much better. As are Patagonia tired of being proclaimed the finished article; for they see themselves as an unsustainable company in transition.
After all, Yvon Chouinard's Wikipedia profile describes him as a rock climber, not Spiderman.
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About the author
Matt Hattam is a Senior Associate Consultant at global strategy management consultancy Bain and Company. Matt advises international corporations and private equity firms in tackling various sustainability challenges and implementing decarbonization initiatives. In his former role as a management consultant at Baringa Partners, he was a host of the Energy Innovators Podcast.