For decades businesses have talked about sustainable development, but as Vincent Stanley, Director of Patagonia Philosophy at Patagonia recently advocated to me, the real focus should be on regeneration, as the idea of regeneration goes beyond traditional sustainability approaches of just reducing harm, and takes on the ambitious mission of actively creating positive good for the world.
I recently talked to Vincent about his new book, The Future of the Responsible Company: What We've Learned from Patagonia's First 50 Years which is being published today. Not surprisingly, regeneration was a key theme of our conversation. One of the most significant strides Patagonia has taken towards regeneration is through its Patagonia Provisions initiative. This venture has advanced regenerative agriculture, showing the potential of transforming food systems to contribute positively to the planet. Through Patagonia Provisions, the company aims not only to produce high-quality food products but also to embrace agricultural practices that restore soil health, enhance biodiversity, and sequester carbon. This approach demonstrates Patagonia's commitment to rethinking its role in the food industry and forging a path towards sustainable and regenerative practices.
During our conversation, Vincent also highlighted how one business’s waste can become another company's feedstock, fostering a virtuous cycle of positive impacts. By emphasizing the importance of reusing and recycling, Patagonia seeks to reduce its environmental footprint and promote a more sustainable approach to production and consumption.We also touched upon the possibility of Patagonia switching more of its focus to provisions versus apparel, as provisions seems more in line with circular thinking. Vincent acknowledged the huge potential in regenerative agriculture but also mention that reuse and resale will continue to be a growing focus of their apparel businesses. In fact, this commitment to circular thinking extends to all its products, as Patagonia actively encourages customers to repair, reuse, or recycle, contributing to a longer product lifecycle and a more sustainable consumer culture.
In discussing why he and Patagonia founder Yvon Chouinard decided to write this book, we revised how much has changed in the last 10 years since the 2012 version of The Responsible Company: What We've Learned From Patagonia's First 40 Years. Vincent reflected that they wrote the new book to document the significant changes in sustainable practices over the past decade while also acknowledging the enduring factors that remain unchanged. For example, we discussed what it means to be a “responsible company” as the requirement and definition of “responsibility” have changed over the past 10 years.
To further align with this new mission, Patagonia also underwent a significant change in its ownership structure in September 2022. The ownership of the company was transferred to the Patagonia Perpetual Purpose Trust and the non-profit Holdfast Collective. Notably, the Trust holds all voting rights of the company but has no right to receive dividends. On the other hand, Holdfast Collective holds 100 percent of the dividend rights. This unique arrangement ensures that the Trust is not financially incentivized to prioritize shareholder value or profits, while the Holdfast Collective does not possess the authority to impose profit-maximizing strategies on Patagonia's decision-making process.
By adopting this new ownership model, Patagonia reaffirms its commitment to staying true to its core values and environmental mission. This structure empowers the company to operate with a long-term perspective that transcends mere profit-making, allowing Patagonia to continue its pioneering work in sustainability and regeneration, with the ultimate goal of safeguarding our precious planet for future generations.
Below is an edited excerpt from our conversation, where you can find more details about Patagonia’s work in regeneration, ownership reform and the other topics mentioned above.
Christopher Marquis: Why are you writing a new version of your ground-breaking book? I know it's been 10 years since the last edition, which was on the fortieth anniversary of Patagonia’s founding. So certainly, the fiftieth anniversary is a nice punctuation point, but what about content wise? What new practices and ideas do you advance things beyond the prior book?
Vincent Stanley: When we look at what actions a responsible company can take, they're about the same. The stakeholders are the same. The financial health of the business, the welfare of employees, customers, and the communities we operate in. And of nature itself. But the climate change crisis has become much more apparent and intense over the past 10 years. And the social dislocations attendant on climate change and the loss of biodiversity have also become more urgent.
We titled the new book The Future of the Responsible Company because we wanted to argue that every business at this point, in a time of social and environmental crisis, has a responsibility to make high-quality products, offer high-quality services that are in some ways necessary or at least useful, and also help address the social and environmental crisis. Business can create leverage along with the public sector and non-profits actions to address these issues. At minimum we have a responsibility as businesspeople to clean up after ourselves, to do the right thing in the right way. And we no longer have the luxury to consider the planet we live on, and the communities we live in, as externalities.
Marquis: Let me ask you some follow-ups because the idea of a “responsible company” in my mind has changed quite a bit in the last 10 years. And actually, many of the cutting-edge practices that I advocate to companies, I learned from Patagonia. Last time we talked we discussed the work Patagonia was doing to save Bears Ears National Monument. Another thing that is really catching hold is the idea of regeneration. The idea that business should go beyond just cleaning up after oneselves as you mentioned, but actually be creating a positive benefit to natural systems and biodiversity. So first, I like to hear a little bit of how Patagonia is thinking about regeneration and how that's shaping your work.
Stanley: I agree that's a major shift. It was an internal argument for revision. In 2012 we were working under the mission statement we'd had for 20 years, which was to “build the best products, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.”
That key clause of “cause no unnecessary harm” acknowledged that almost everything we do to improve our practices is still extractive, takes from nature more than we know how to return and does not actually create positive good. One thing we discovered when we got into the food business with Patagonia Provisions is the potential of regenerative agriculture. Not just forgoing chemicals, but adopting practices that bring the soil back to health and also increase the depth of topsoil. Here, you’re giving back to nature as much as take. And this is a new north star for us as a company. It's not something we can adopt in much of the apparel business so far, but it shifts our perspective.
I think regeneration is a key idea, because it increases our capacity for leverage. As human beings we have limited number of things we can do. So we should undertake actions that result in multiple benefits and solve multiple problems. When you're engaging in regenerative agriculture, or you're thinking about communities in a regenerative way, you start to create a virtuous circle. Once you start to create effects that are healthy for a community or for the environment, you open up the imagination to thinking about other things can be done.
The second idea that's really important and has evolved over the last 10 years relates to Doughnut Economics from Kate Raworth, goes back to William McDonough’s cradle-to-cradle, and Marian Chertow’s brilliant work on industrial ecology at Yale: One company’s waste can become another company's feedstock. The more we do business that way the more we're going to reduce our adverse environmental and social impacts and open our imaginations to solving the world’s problems creatively.
Marquis: The idea of how when you think about communities in a regenerative way, you start to create a virtuous circle. is important, are there examples within Patagonia of how you're implementing that type of circular thinking?
Stanley: Not so much within Patagonia, but Yvon has been involved as an investor in a group of companies in Halifax that we discuss in the book. A municipal solid waste plant there can recycle 95% of the waste they take in. They can even turn Saran wrap back into usable polyethylene. The plant works hand in hand with an on-land regenerative salmon farm, and a company that makes organic fertilizer from soldier flies. These companies work together now—and look for new ways to cooperate.
Marquis: You mentioned Patagonia Provisions really opened up your eyes to the potential for regeneration, while the same potential may not be there for the apparel business. You are definitely cutting edge in sustainability in apparel - you’ve stopped selling logoed jackets to certain consumers. On one Black Friday you advertised “Don't buy this jacket.” But this is a business where maybe more of the benefits would be in the “do less harm” category. So my question is, do you think over time you might switch more to provisions versus apparel as that seems more in line with your mission?
Stanley: Well, that's a possibility. But I think that within the apparel business we can start to look at our practices and make them more regenerative over time. Reuse and resale is a big way to reduce our impact. Since we’re making high-quality, durable products that last a long time it makes sense to offer a platform for people to buy what’s used and still perfectly good but at a lower price. It’s a huge environmental advantage to keep things in circulation longer. And we're also looking at the potential of regenerative practices for growing cotton, which is a big part of our line.
Marquis: That fits well. I know Patagonia was an early innovator on organic cotton as well, quite a long time ago now. Another big question I have in regards to how things have changed over the past 10 years is in regards to the ownership shift that happened. About a year ago the ownership of Patagonia was transferred from the Chouinard family to a foundation, or essentially 2 different connected entities as I understand it. Can you say a bit about you know that decision?
Stanley: It was the culmination of a process. The food business taught us we had the potential to do positive good as well as reduce our harm. At the same time, we understood the acceleration of the environmental crisis we've been talking about for 30 years, the urgency of it. So in 2018, we simplified our purpose statement to “We're in business to save our home planet.”
I remember at the time being rather nervous about this. I thought, “My, we’re using some highly aspirational language.” But what I saw next was how closely our people took the new statement to heart, particularly the product people saying, “Okay, if this is our new mission statement, what does this mean for my job? What does this mean for our team? How do we change the way we work?”
I feel very strongly that when you start to say, “We have to compromise between the business purpose and the business profit,” you're sunk. It is fine to acknowledge the tensions. But once you start talking about compromise between purpose and profit you know which side is going to lose. If the business model isn’t based in your company’s purpose, you don’t have one. So for us the new purpose statement clarifies what is truly important and helps us make better decisions.
So does the new company structure. I remember Yvon saying 15 years ago that ideally Patagonia should be owned by a nonprofit serving the environment. That wasn't possible in the US at the time because legally a trust had to benefit specific human beings. But those laws have changed and a purpose trust is now possible—and feasible.
I think this new structure was ideal for us, because it allowed the company to operate without discontinuity. We didn't have a new owner coming in. We didn't have a radical assumption of debt which can happen with an ESOP (Employee Stock Ownership Plan). And the change served to dovetail nicely with the change in the purpose statement—and with all the work that we've done for the past 10 years to figure out where we're going next. The board of the two new entities is the same that served Patagonia as a family-owned company. So we have continuity in culture, values, and governance.
Marquis: The next 10 years do you have any predictions where we will be? I think about 2012, I would not have predicted there would be a movement on regeneration, and these new ownership structures would be implemented. If you were to do a new version of the book 10 years from now, what sort of innovations do you see coming down the pipe?
Stanley: We know that over 80% of our environmental impact is in the materials we use. Reducing our own impact remains a strong focus. But what I I'm hoping to see by 2033 is an even closer relationship with the customers, not just in the commercial relationship but as partners in working together to save the home planet.
Patagonia is fundamentally a business but we’re also a seriously activist company. Over the years we’ve learned a lot about how to help restore nature to health, which also revives the health of human communities. We’re learning a lot about how to practice regenerative organic agriculture. These are the areas where we can act in concert with government entities, NGOs and our community of friends and customers to help bring about positive change over the next 10 years. We all need to address climate change, freshwater shortages, loss of biodiversity, and their effects on human communities (climate migration being a big one), as one related effort.
Marquis: This is an important point. Climate change certainly is on the public agenda. But some of the other things you mention like biodiversity, climate migration, I think haven’t really reached the level of public attention they should have. So it great that Patagonia is out there pushing those ideas, because as you note, it all fits together as part of the bigger issue. If you've seen this diagram of “carbon tunnel vision.” I show it in my classes and it shows someone looking forward and the narrowing of their glance to basically CO2 emissions. But it also should include all these other things that interact with climate, the things you mentioned, but more. There's like at least 15 items on that diagram that we need to consider if we consider climate and what is happening to the natural world. It’s all part of a bigger picture and we've really narrowed the aperture to be too narrow.
Stanley: There's a great quote from Dwight Eisenhower. He wasn't a field general but the brilliant logistician of World War II. He said, “whenever I can't solve a problem, I make it bigger.” The point being if you look at a problem its full context, you can begin to see possible solutions. But if you try to make it smaller, you get lost in the weeds. And the words.
I think that's true of business right now in its approach to climate. Yvon has said for a long time that we need to see ourselves as a part of nature. If we think of nature as something outside ourselves, as is most often the case, our vision is blinkered. If we see ourselves inside nature facing a common future, we can start to act.