From Synchilla to School Support
Outdoor Clothing Maufacturer Patagonia Recognized for Corporate Responsibility
By Lisa Gardiner
More than 20 years ago, Yvon Chouinard, founder of outdoor clothing company Patagonia, began realizing that pitons, the metal spikes used by mountain climbers, were damaging Yosemite National Park's El Capitan peak. In 1972, his company's catalog became a soapbox for "clean" climbing gear.
Twenty-four years later, Patagonia is still making the preservation of resources natural and human a priority. The company was recently praised by President Clinton as an "impressive" example of corporate responsibility, both for its family benefits program and its policy of donating 10 percent of pretax profits to environmental organizations more than $1.1 million in 1995.
In addition to its corporate tithing, Patagonia protects the environment through its clothing designs, which are simple, versatile, and designed to last a long time. Many garments are made from Synchilla, a fabric woven from recycled soda bottles. This spring, the company converted to organic cotton.
"We're concerned about the quality of the product," says Chief Operating Officer Ed Schmults. "Environmental aspects are part of that."
In the same vein, the company has reduced packaging. And in the competitive catalog business where everyone ships by air, Patagonia will do so only on request. As the company reminds customers, air transportation uses a lot more fuel and energy than surface transportation.
Human resources also get attention at Patagonia, which has been recognized as being particularly family friendly. New mothers and fathers get two months of paid child-care leave, and an on-site child-care program lets employees slip in to see their children during the day.
Child-care subsidies are provided, company buses transport children from local elementary schools to the company's Ventura offices, and a school support program allows employees five days off to participate in their children's classroom activities. Parent education seminars are often given during lunch.
"Many companies have programs [like these] in place, but most people think it will impact them negatively if they take advantage of them," says Terri Wolfe, director of human resources. But, at Patagonia, taking care of children is a welcomed part of the corporate culture, she adds.
Patagonia's family benefits and environmental concerns reflect a willingness to take financial risks, although the company which grossed $154 million in 1995 is consistently profitable. "It's a balancing act," says Schmults.
To fulfill its environmental commitments, for example, Patagonia may invest in a small dye house in Portugal that is unable to afford less toxic dyes without the added capital or switch to organic cotton despite possible problems.
"In order to make this conversion [to organic cotton], we had to lower our profit margin," says company spokesperson Lu Setnicka.
"There are significant new risks of supply and performance with organic cotton. All the chemicals there's a purpose why they're there. We're still moving through that," adds COO Schmults.
The company can take these risks because it does not strive to grow as fast as it can. "We sort of look at growth in this company the way we look at a life cycle. If any one component grows too much or too fast, it throws the system out of balance," says Setnicka.
Sometimes the risks produce failures. Replacing plastic buttons with rain forest tagua nut buttons, as Patagonia once tried, supported an indigenous industry, but the nuts could not survive washers and dryers. The company was swamped with returns.
But in other cases, the responsible path also turns out to be cost effective. So far, the move to organic cotton looks like a good business decision. "Consumer response has been wonderful," according to Setnicka. "Some don't even know we use organic cotton. They're buying it because it's a great product."
Family-friendly policies have also benefited Patagonia, reducing absenteeism and helping the company keep workers, especially women. A cost-benefit analysis found it was more expensive to recruit new employees than to pay for the on-site child-care center a significant factor in retaining women in the workplace.
Women now comprise 65 percent of the corporate staff and 55 percent of the company, and the turnover rate is only 3 percent.
Many benefits of the family policies are intangible. Company employees know one another's children, employee morale is higher, and children have a good idea of what their parents do at work, Setnicka says.
"The children are a visual, verbal, and vocal reminder to balance our lives," Wolfe observes.
Says Setnicka, "Basically, our mission is to make the best-quality product with the least amount of harm. It's very hard to produce a high-quality product without high-quality employees."
Lisa Gardiner is a freelance writer on religious and ethical issues.
As an expert in corporate responsibility and sustainable business practices, I have closely followed the trajectory of Patagonia, the renowned outdoor clothing manufacturer. My in-depth knowledge stems from a comprehensive understanding of the company's initiatives, policies, and strategies, backed by a wealth of information on sustainable business practices in the corporate world.
Patagonia's commitment to environmental conservation is evident in its longstanding efforts to reduce its ecological footprint. One notable aspect is the utilization of innovative materials in clothing design. Synchilla, a fabric woven from recycled soda bottles, exemplifies the company's dedication to repurposing materials and minimizing waste. Moreover, the recent shift to organic cotton further underscores Patagonia's emphasis on sustainable sourcing.
The company's environmental responsibility extends beyond product design to packaging and transportation. Patagonia has taken significant steps to reduce packaging and minimize air transportation, recognizing the environmental impact of these practices. These measures align with the company's overarching goal of preserving natural resources.
A distinctive feature of Patagonia's corporate responsibility is its financial contributions to environmental causes. Donating 10 percent of pretax profits to environmental organizations, totaling over $1.1 million in 1995, demonstrates a genuine commitment to supporting initiatives beyond the scope of its direct operations.
On the social front, Patagonia has implemented progressive family-friendly policies, earning recognition for being particularly accommodating to employees with families. The provision of two months of paid child-care leave for new parents, on-site child-care programs, and school support initiatives showcases the company's dedication to fostering a supportive work environment.
In terms of human resources, the company has effectively integrated family benefits into its corporate culture, challenging the misconception that such policies negatively impact employees. Patagonia's family-friendly approach has resulted in tangible benefits, including reduced absenteeism and a high retention rate, especially among women. The company's workforce composition, with women comprising 65 percent of the corporate staff and 55 percent of the overall workforce, attests to the success of these initiatives.
In summary, Patagonia's multifaceted approach to corporate responsibility encompasses environmental sustainability, social responsibility, and a commitment to ethical business practices. The company's willingness to take financial risks for the sake of these principles reflects a holistic understanding of the interconnectedness of environmental and social issues in the business world. Patagonia stands as a shining example of a corporation that not only prioritizes profitability but also actively contributes to the well-being of the planet and its employees.
