Patagonia was founded by Yvon Chouinard in 1973 to make clothing and equipment for rock climbers. Chouinard was an avid climber who believed in clean climbing with little impact on the outdoors.
From the start Patagonia had a clear focus on environmental protection that reflected the personal ethics of its founder. It was the first California company to use renewable energy sources to power its buildings and one of the first to print its catalogs on recycled paper. Patagonia switched to 100% organically grown cotton in 1994 and removed chlorine from its wool products.
Patagonia’s commercial success enabled it to become a visibly activist company. In 2018 it changed its mission statement to “We’re in business to save our home planet.” It also provides tools and funding to grassroots organizations.
Growth is not the ultimate goal for Patagonia, yet their differentiation and environmental focus has helped them grow sustainably.
Align Activities to Environmental Objectives
Patagonia makes durability a strong constraint in the design and manufacturing of its outdoor clothing equipment, in order to align with its environmental objectives. The goal is to reduce consumption and waste. In addition, the company limits its environmental impact by maximizing the use of organic and recycled materials, by repairing damaged clothes, and by complying with strong environmental protection standards for its entire supply chain.
Develop Sustainable Value Propositions
Patagonia makes customers feel they are contributing to protecting the environment by extending its value proposition beyond the functional value proposition of high quality outdoor clothing and equipment. By buying Patagonia products, customers feel they are contributing to the highest environmental standards. Patagonia even launches a second-hand clothing value proposition to limit its environmental footprint and make its products accessible to a larger market.
Accept Higher Activity Costs
Patagonia’s high sustainability standards lead to higher costs. It uses more costly organic cotton, develops the infrastructure to recycle materials, and educates the public (Footprint Chronicles). It also bears the cost of making its supply chain more environmentally friendly by educating suppliers on sustainable practices.
Apply Premium Pricing
Patagonia can charge a premium, because customers accept that environmental friendly production comes at a cost. The company’s customers are more environment-conscious than price-conscious.