The Responsible Company

The Responsible Company: What We’ve Learned from Patagonia’s First 40 Years

by Yvon Chouinard and Vincent Stanley

We hear a lot about sustainability, but the authors contend “no human economic activity is yet sustainable… Responsible seems to us the apt, more modest, word to use… The term itself is necessary shorthand; there is no responsible company, only responsible companies of varying degrees, who act strategically to do less harm while improving, not sacrificing, the health of the business.”

Doing good and seeking profit are not incompatible. Wal-Mart’s initial environmental efforts were motivated by reputation management, “but removing excess packaging from deodorant sticks, concentrating laundry detergent in small bottles, and installing auxiliary power units in their trucks to reduce idling time turned out to save them millions of dollars.”

“Everything manufactured comes with a cost that exceeds the price… To produce enough gold to make a wedding band, for instance, generates 20 tons of mine waste… A Patagonia polo shirt is made of organic cotton from an irrigated field, whose cultivation requires nearly 2,700 liters of water, enough to meet the daily needs (three liters a day) of 900 people. Each polo shirt, in its journey from the cotton field to our Reno warehouse, generates nearly 21 pounds of carbon dioxide, 30 times the weight of the finished product. Along the line, it generates three times its weight in waste.”

“Companies, not individuals, generate 75 percent of the trash that reaches the landfill or incinerator. Packaging, for which the producer is responsible, is disposed of almost instantly by the consumer and comprises a third of all waste.”

The authors point out the severity of industrial damage to the environment.

  • “We have added significantly, through runoff from sewage and fertilizer, to the nitrogen and phosphorous in the water supply; the extra nutrients create algae blooms that choke off oxygen and kill fish. Half of the lakes in Asia, Europe, and North America suffer from this process, called eutrophication, as does much of the Gulf of Mexico.”
  • “Water withdrawals from lakes and rivers have doubled since 1960. As more of the earth’s major rivers—on which huge populations depend—fail to reach the sea, the ocean’s coastal eutrophic, or dead, zones expand. The dammed Colorado River is now rarely allowed to flow into the Gulf of Mexico, and its former delta is a toxic swamp. By 2025, no Chinese river will meet the ocean all year long, which will devastate wetlands, and decimate bird and fish life.”
  • “Conventional plowing and planting without crop rotation has led to significant loss of topsoil—at the rate of one inch a year in the American Midwest. It takes 500 years for an inch of topsoil to form naturally.”
  • “To prepare soil for planting cotton, workers spray organophosphates (which can damage the human central nervous system) to kill off all other living organisms. The soil, once treated, is doornail dead (five pesticide-free years have to pass before earthworms, an indication of soil health, can return). Such soil requires intensive use of artificial fertilizers to hold the cotton plants in place… Cotton field contribute 165 million metric tons of greenhouse gas emissions every year.”

The authors cite examples of responsible actions from their own experience. Chouinard Equipment, the predecessor of Patagonia, made mountain climbing equipment. They observed that repeated placement and removal of their pitons were quickly disfiguring once pristine rock faces. So they phased replaced their core product with aluminum chocks. “At Chouinard Equipment, we learned that we could inspire our customers to do less harm simply by making them aware of the problem and offering a solution. We also learned that by addressing the problem we had forced ourselves to make a better product: chocks were lighter than pitons and as or more secure.”

In another example, “within days after the opening of our Boston store, its staff began to experience headaches during their shifts. We had the air tested: we learned that the ventilation system was… off-gassing formaldehyde… The source of formaldehyde in the store turned out to be the finish on our cotton clothes, added by the mill to prevent shrinkage and wrinkling.” The company switched to organic cotton. “The spinners in particular objected to organic cotton because it was full of leaves and stems and sticky from aphids. Our most creative partner, in Thailand, solved the problem by freezing the cotton before spinning.”

“The textile industry is one of the most chemically intensive industries on earth, second only to agriculture, and the world’s largest polluter of increasingly scarce freshwater. The World Bank estimates nearly 20 percent of industrial water pollution comes from textile dyeing and treatment.”

“Remember that 90 percent of a product’s environmental impact is determined at the design stage. Life-cycle analysis, the most critical tool for learning everything that goes into making your product, is expensive and time consuming, especially for smaller companies with limited resources. Therefore, it’s best to measure what is most important and what you can do something about: the 80/20 rule applies. If 20 percent of your products generate 80 percent of your sales, analyze those products to gauge the lion’s share of your impact. Moreover, if possible, work with an industry organization with a sharable methodology, database, and software that enable you to capture the necessary social and environmental data as part of your ordinary reporting systems.”

“In addition to stockholders, there are four key stakeholders: employees, customers, communities, and nature.” Together, these comprise the five categories of business responsibility. “A company that aims to be socially and environmentally responsible has the same primary duty as any other business to know its numbers and pay its bills on time. A business cannot honor its social and environmental responsibilities unless it meets its first responsibility: to stay financially healthy.”

The Appendix includes checklists to help you get started. “We borrowed liberally from two checklists in the creation of our own: Napa Green’s (for wineries) and the B Impact Assessment developed by B Lab and the B Corp Community.”

“We intend our checklists as points of departure… Adapt the checklists to your priorities. Figure out what can be done most easily and least expensively (or to produce the most savings), and with the least resistance… Checking off the easy stuff gives us experience and builds confidence. Tackling the big stuff, and surviving setbacks and failures, makes us smarter, stronger, and more useful to others.”

“The company will get smarter, and more people will start to care deeply about creating a better-quality business through improving its social and environmental performance… You will spot money leaks you could not see before, and you will gain the confidence to recognize and go after opportunities that a company bound by traditional corporate see-no-evil politesse cannot begin to address. Success motivates people, including your strays. Doing good creates better business.”


Chouinard, Yvon, and Vincent Stanley. The Responsible Company: What We’ve Learned from Patagonia’s First 40 Years. Ventura, California: Patagonia Books, 2016. Buy from Amazon.com


 

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