At a time when plenty of consumer marketers are leaning into acronyms like ESG -- environmental, social and governance -- as part of their brand promise, Patagonia took the ultimate step in 2022 and literally gave the entire company away to a single shareholder: Planet Earth.
“For years, we looked for a way to lock in Patagonia’s purpose and unlock more value to fight the environmental crisis. Well, we did it,” the company said in a promotional email linking to a letter from its founder and chairman Yvon Chouinard explaining why he gifted his family’s ownership to a trust that would allocate all its profits to the climate crisis and protecting land.
“While we’re doing our best to address the environmental crisis, it’s not enough,” Chouinard wrote, explaining: “We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact.”
He said the company explored several conventional deals to support it -- including selling Patagonia or taking it public -- and donating the proceeds, but that there would be no guarantee its new owner/s would maintain the values Patagonia had established for its employees and its consumers around the world.
“Truth be told, there were no good options available. So, we created our own,” he said, explaining why Patagonia will continue to operate as a for-profit company whose profits are used 100% to sustain the planet, while continuing to market one of the world’s best-regarded brands in sustainable ways -- from sourcing and manufacturing through retail, and even customer-relationship management (CRM) all the way up to returns and repairs.
As someone who became an avid mountaineer in my youth, Patagonia has long been my favorite brand for making and fulfilling those promises. At first it was just because they worked better and were designed to function better in extreme outdoor conditions.
But there was something unique and fundamental about the Patagonia brand’s DNA that predates the many of the industrial world’s environmental marketing cycles -- from “green marketing” to ESG.
I first discovered Chouinard’s products when I was learning to rock climb in the early 1970s at a time when the sport was transitioning from older, far less environmentally kind technology like metal pitons that climbers would hammer into and remove, scarring the ancient rock walls as they climbed.
Chouinard’s first company -- Chouinard Equipment Ltd. -- was a leading supplier, but also began innovating new forms of “leave no trace” rock-climbing gear -- chocks, hexes and camming devices -– that could be easily placed and removed from rock walls without damaging them. They revolutionized the sport and are still the state of the art for climbers today.
Along the way, he helped usher in a new ethos for the burgeoning outdoor equipment industry -- and its most diehard consumers -- all based not just on leaving no trace, but on doing what you can to build sustainable systems that actually give back to Planet Earth.
Over the years, Patagonia has innovated and integrated these processes into its entire footprint, from manufacturing through distribution and ultimately, its customer interactions.
Its trademark synthetic fleece apparel was one of the first to begin integrating recycled plastic from drinking-water bottles into its fabrication process, and the buttons on its garments are made from the shells of rainforest nuts that provide a sustainable business model, providing an economic incentive for locals to preserve them.
In more recent years, Patagonia has added products incorporating other recycled materials -- including natural ones like cotton and wool -- and even created a program that recycled and resold returned apparel under a separate “Worn Wear” website.
In 2019, it expanded on the concept by launching a “ReCrafted” initiative that manufactures and markets apparel made from the scraps of fabric coming from used Patagonia gear that couldn’t be reconditioned as “Worn Wear.”
Among its CRM initiatives are periodic newsletters instructing and reminding its list how they can repair their own gear, which fosters not just sustainability, but a sense of self-reliance that also is core to the Patagonia brand.
Almost since its inception, Patagonia donated a percentage of its profits to sustainability, and in 2016 it began donating 100% of the profits it generated from Black Friday sales to environmental groups as a pragmatic offset for the less-than-environmentally friendly conspicuous consumption that happens on the annual retail marketing day.
“Black Friday is a frenzy of deep discounts, limited-time offers and last-ditch efforts urging you to 'save' by spending more,” the brand said in a promotion introducing the concept. “We’re not doing that. Instead, we’d like to slow down and think about the bond we all build with our clothes. That’s why we’re committed to learning how to repair what we already own, shopping for used gear to keep it out of the landfill, or — when you do need something new — buying clothing and gear that’s built for the long haul. We also have ways you can donate your time, money or skills to the issues that matter to you most.”
In 2018, Patagonia donated $10 million it received from the Trump Administration’s 2017 corporate tax cut to groups focused on the climate crisis.
So, when after nearly 50 years of marketing its brand this way, Chouinard announced last September that he was making Planet Earth its only shareholder, no one would have been surprised that he was simply fulfilling Patagonia’s original brand promise.