Few other companies
have been so closely associated with environmental causes than Patagonia. When
the company announced this month that it would donate all its profits —
averaging more than $100 million a year — to the Earth, consumers around the
world saw the move as confirmation of its principles and values.
اضافة اعلان
The outdoor apparel company has made environmental
protection and activism core to its operating procedure and company principles
since the beginning. While the decision is certainly historic, the details are
a little more revealing. What is clear is that corporate responsibility initiatives
have been flipped on their head in the wake of this bold gesture.
Environmental protections have long been core to
Patagonia’s brand. The company has revolutionized the clothing industry through
the use of recycled fabrics and other environmentally friendly manufacturing
standards. Such standards come with a cost and that has led to prohibitively
high price tags for many of Patagonia’s items, which include everything from
fleece tops to surfing wetsuits (using special environmentally friendly natural
rubber, of course). The cost for items is so high that many joke the company
should be called “Patagucci”.
Bucking the trend of excessive consumerism,
Patagonia recently started pushing customers to repair their existing Patagonia
clothes instead of buying new ones. The repair and reuse campaign falls neatly
into the company’s iconoclastic business approach.
In an interview with Fast Company Magazine, Yvon
Chouinard, the billionaire founder of the company said he was “an avowed
socialist. I’m proud of it. That was a dirty word just a few years ago until
Bernie Sanders brought it up”.
Selling $400 jackets to wealthy consumers while
aspiring to socialist values is a fascinating position. What is more
interesting in terms of Patagonia’s branding is the company’s long-standing
contracts with the US military. The company has a dedicated team, supporting
the US Special Operations Command with delivering US-made technical cold
weather and combat uniforms. It does not stop there. The company, which has
been vocal on a variety of political issues in the US, has a special tactical
clothing division called Lost Arrow, which works closely with various US police
departments. The company has gone to great lengths to conceal details of Lost
Arrow and its revenue, according to investigations by GQ.
Selling $400 jackets to wealthy consumers while aspiring to socialist values is a fascinating position. What is more interesting in terms of Patagonia’s branding is the company’s long-standing contracts with the US military.
There is nothing wrong with selling equipment to
militaries and police departments. In some ways, it demonstrates just how tough
the products are. In Patagonia’s case, however, it reveals the genius of the
company’s branding. The company has made billions selling clothes that make its
customers feel empowered from a social and environmental standpoint. By now,
many consumers are aware of the challenges of climate change and how social
structures allow corporate greed to flourish. Patagonia enables the consumer
with enough money to buy a garment that will last a lifetime and be easy on the
Earth.
There is a story that Slovenian philosopher Slavoj
Zizek likes to share about Starbucks. When you get to the cash register there
are often expensive bottles of water that brand themselves in a socially
conscious way. The company will build a well in an impoverished community when
you buy a bottle of expensive water. The logic here, Zizek points out, is that
the consumer is aware that the coffee she is about to drink has come to her by
some form of exploitation. The coffee farmer in some other corner of the world
is living in an impoverished community and worked hard so that she could have a
cup of coffee. Instead of changing the system that allows this to happen, the
bottled water company offers the consumer a way to feel better about their
decisions by purchasing a product inside the system. Buy something and we will
help that faraway place.
Patagonia’s announcement that all profits will go to
a specially created trust designed to invest in various environment and
climate-related charities is another realization of this thinking. Many have
heralded Chouinard for his principled stance in taking this decision for good
reason.
It is a bold act, but one that must be understood in
the context of the vast fortune that he has already made and the untold tax
benefits that this decision will rain down on his family.
Bucking the trend of excessive consumerism, Patagonia recently started pushing customers to repair their existing Patagonia clothes instead of buying new ones.
There are lessons from Patagonia’s brand pivots for
the corporate environmental, social, and governance (ESG) movement. Over the
last decade, major international corporations have adopted various forms of ESG
standards designed to calm investor and consumer concerns about the ethical
behavior of companies. There are even ESG funds traded on stock markets
worldwide.
In recent years, vocal critics like Elon Musk have
said that ESG standards are effectively meaningless in terms of the real-world
behavior of companies. He might have a point but the larger issue is why ESG
standards were created in the first place.
Patagonia’s bold decision and the struggles over
ethical corporate governance are two sides of the same coin. There is a rot at
the core of the global capitalist system that consumers and some investors are
becoming obsessed with. That rot manifests in poor environmental projections to
the growing inequality that defines many societies and deepens political
divisions in countries like the US.
On some level, we all know this is happening and we
are complicit in the system. Patagonia has found a way of positioning itself as
a counterweight to that system while benefiting handsomely from it.
ESG goals attempt largely to do the same thing but
have missed the mark. Make no mistake, Patagonia’s divestment decision is a
great one for environmental causes. One is left wondering, however, if the
Earth is now Patagonia’s only shareholder, does it have any ethical concerns
about clothing the US military and police departments?
Joseph Dana is the former senior editor of Exponential
View, a weekly newsletter about technology and its impact on society. He was
also the editor-in-chief of emerge85, a lab exploring change in emerging
markets and its global impact. Twitter: @ibnezra. Syndication Bureau.
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