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‘Rampant Consumerism Is Not Attractive.’ Patagonia Is Climbing to the Top — and Reimagining Capitalism Along the Way

10 minute read

There are two small holes in the chest of my black fleece, as if a vampire took a nip, but Rose Marcario, the CEO of Patagonia, does not think I need a new one. The outdoor apparel retailer would make more money if Marcario pushed one of the supple pink and purple pullovers on sale for $119 in Patagonia’s store downstairs. Instead, she suggests a different idea. “You can just patch it,” she says, sitting near an open window at Patagonia’s camp-like Ventura, Calif. headquarters, wearing brown Buddhist prayer beads on her wrist. It’s an odd statement for the head of a retail company, but she shrugs and says, “I’m not really a buyer of things.”

Patagonia has long been at the forefront of what is now emerging as an increasingly popular new flavor of capitalism. Today’s customers want their dollars to go to companies that will use their money to make the world a better place. Patagonia donates 1 percent of sales to environmental nonprofits, and in 2016 gave 100 percent of Black Friday sales—about $10 million—to environmental groups. In late 2017, it sued President Trump after he issued a proclamation reducing the size of two national monuments. (The case is still making its way through courts.) Late last year, it changed its mission statement to “We’re in business to save our home planet.” And on Sept. 20, Patagonia shut down its stores and offices so that employees—including Marcario—could strike alongside youth climate activists. “Business has to pick up the mantle when government fails you,” says Marcario, eating a bowl of hemp pesto pasta from the company’s organic cafeteria. “I think we’ve all realized that we have to go beyond ‘Do no unnecessary harm,'” a reference to part of the company’s former motto.

As a growing share of consumers worry about a planet that is getting hotter, and the accompanying droughts, fires, and storms, Patagonia’s environmental activism has been good for business. The number of belief-driven buyers, who choose a brand based on its position on social issues, is growing worldwide, and includes 59 percent of all shoppers in the United States, according to a survey of 40,000 consumers by market consultancy Edelman. One in two people are belief-driven buyers, according to an Edelman study. “[Patagonia has] fantastic high-quality clothes, but most important is their business philanthropy and social philosophy,” says Erin Esposito, 45, who’s been a devotee for two decades, ever since stumbling across a book the company published about grassroots activism.

Patagonia is privately held, but a company representative told TIME that sales quadrupled over the past decade and recently surpassed $1 billion. Young people are clamoring to work at the company’s main campus. More than 9,000 people applied for 16 internship positions last summer. Prospective employees are attracted by perks like on-site childcare, a cafeteria selling subsidized organic meals, and the opportunity to surf or hike at lunchtime.

It’s easy to be cynical about Patagonia’s motives. The company says it discourages consumption but is also savvy at marketing, introducing new colors and styles to its lineup every year. It advises consumers to recycle while also sending customers a constant stream of promotional emails, whetting their appetite to spend. As its executives speak out about climate change, it offers free shipping on orders of more than $50, incentivizing people with easy online shopping. To a skeptic, Patagonia might seem like yet another company that says it wants to be more sustainable while simultaneously creating more pollution and waste.

But even retail competitors single out Patagonia for its approach. “Patagonia is about two things: quality and values. Simple as that,” said Bayard Winthrop, the CEO and founder of American Giant, a clothing company that sources and makes all of its products in the United States. “They consistently execute on those two core ideas, and don’t get caught up in the noise. This is effectively what puts them in a class of their own.”

Environmental activism has been part of Patagonia’s DNA since it was founded. It has donated $100 million since 1985 to environmental groups, including the Conservation Alliance, which it helped found in 1989 and which works to protect nature in America. It has been repairing customer’s clothes since the 1970s, and it operates one of the largest apparel repair centers in North America. In 2013, it launched a venture capital fund that invests in start-ups that work on environmental issues, such as Wild Idea Buffalo, which raises buffalo while restoring grasslands to the Great Plains, and Bureo, which converts discarded fishing nets into consumer products like sunglasses. Patagonia “really walks the walk and talks the talk,” said Richard Jaffe, an independent retail consultant. “They invest a lot of time and energy into being a catalyst for change.”

Patagonia has come up with some novel solutions as it tried to be better for the planet. It was the first company to make fleece out of recycled bottles with its synthetic chinchilla, or “synchilla,” which it unveiled in 1993. In 2005, it launched “Worn Wear,” which sends employees to college campuses and climbing centers, teaching consumers how to repair things; the company also repairs customers’ clothes in 72 repair centers globally. Customers can mail in their used gear for store credit, and in 2011, Patagonia ran an ad in The New York Times telling customers “Don’t Buy This Jacket” to discourage over consumption. Earlier this year, Patagonia said it would prioritize other “mission-driven companies” over companies like financial institutions when making co-branded apparel like corporate vests.

In 2011, Patagonia got into the food business because the company decided that the agricultural industry was in need of improvement. Patagonia Provisions now sells sustainably-farmed mussels from Spain, buffalo jerky made from free-roaming grass-fed bison, and Marcario’s favorite, Tsampa dry soup mix made from organic barley grown in Saskatchewan. Marcario says that in 20 years, Patagonia’s food business may be bigger than its apparel business as consumers figure out how to recycle and repair more of their clothing.

Marcario now wants to use Patagonia’s reputation to show other companies that capitalism doesn’t have to be so focused on profit. She was formerly the chief financial officer of General Magic, an Apple spin-off, and an executive at a private equity firm. But after watching one too many mass layoff made her question the downsides of capitalism, Marcario walked away from her career, spent time with family, and traveled through India studying Buddhism. She joined Patagonia as chief financial officer in 2008, becoming CEO in 2014. “To me,” says Marcario, “there’s still a lot of potential in economies to be more focused on serving humankind.”

Patagonia was founded by Yvon Chouinard, a California rock climber who began selling climbing pitons he forged in his parents’ backyard in the late 1950s. He would make pitons in the winter and spend summers climbing, selling equipment out of the back of his truck.

Demand for Chouinard’s equipment grew, but making pitons was labor-intensive and expensive. So he started selling clothing, too, hiring friends—mostly climbers and surfers—to help. “There was a strong sense from the beginning of wanting to protect the wild places,” said Vincent Stanley, Chouinard’s nephew. He’s been involved with the company since 1973, and is both a published poet and Patagonia’s Director of Philosophy.

Thriving as a business while protecting the environment was harder than it looked. In the early 1990s, after cotton in a poorly-ventilated store sickened employees, Patagonia switched to organic cotton, which is farmed without chemicals. Sales fell, the company offered fewer items, and Patagonia cut its connection to the global supply chain. But over time, the company established a new supply chain and won customers as it explained its decision to embrace organic cotton.

Chouinard was in business to give his money to environmental causes—or at least that’s what he’d say if you asked him in the early 1990s, Stanley said. But when a management consultant pushed back on that line, saying that Chouinard should just sell the company and start an environmental foundation, Chouinard had a revelation. He wanted to use Patagonia as a laboratory to figure out how to source, manufacture, and sell products in a way that didn’t kill the planet. “I think we used to be a company that supported activists, and now we are more of an activist company,” Stanley said.

Depending on how you look at it, Chouinard was either very early or very late in envisioning a new type of socially woke company. Corporations were created centuries ago to do good, often with the explicit purpose of building universities and hospitals, says Oana Branzei, a professor at Ivey Business School at Western University. But in recent decades, they began to prioritize making money for shareholders, as economists like Milton Friedman argued that was a company’s primary responsibility.

In the last few years, though, more companies have started rethinking the profit-first mantra. Many are now structuring themselves as benefit corporations, which are legally required to balance profit and social and environmental considerations—a format that became more accessible after states like Maryland and Delaware passed laws allowing companies to incorporate as benefit corporations starting in 2010. There are now more than 3,000 B Corps, which are companies certified by the nonprofit B Lab to have met certain standards of social and environmental performance and legal accountability, including Kickstarter, Allbirds, and Athleta. That’s up from 681 in 2014, said Andrew Kassoy, the co-founder of B Lab, a nonprofit that certifies B Corps. “The political and cultural environment we’re in is one in which the public increasingly expects companies to act responsibly,” he said. Patagonia became a certified B Corp in 2011.

Even more traditional CEOs say they have started questioning the profit-first mentality. In August, 181 CEOs, including the leaders of JPMorgan Chase and Procter & Gamble, signed a letter committing to lead their companies for the benefit of not just shareholders, but also for customers, employees, suppliers, and communities. This shift is happening in part because younger consumers are rewarding corporations that behave responsibly, while punishing those that do not. “The younger generation doesn’t want to just feel good about their purchases, they want to purchase from a company because of what they believe in,” says Branzei.

Marcario knows that her job is made easier by the fact that people both young and old want Patagonia products—even some people who disagree with the company’s politics keep buying its jackets and vests, she says. But she’s not afraid to rethink the company’s business model as generational attitudes towards shopping and consumption shift. “This idea of rampant consumerism is not really that attractive to younger generations,” she says.

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