September 28 2012 - It was not a nice day to venture outside: the weather was cold, windy, and most of all, very, very wet. Yet Friday’s forecast did not stop dozens of spectators - many of whom arrived in their own Patagonia apparel - from arriving at Burke Auditorium. It was a chance to witness a lively discussion between Patagonia founder Yvon Chouinard, writer Vincent Stanley, and Yale’s Pavan Sukhdev on Patagonia’s unique approach to business and its never-ending efforts to lead as a responsible company.
The panel was also a perfect platform for the launch of Pavan Sukhdev’s new book entitled “Corporation 2020: Transforming Business for Tomorrow’s World,” which highlights the role corporations must play in helping our economy apply monetary values to services we don’t normally price - biodiversity or community welfare, for example. “[Today] when we measure corporate performances, we don’t include our impacts on nature and what our business costs society” says Sukhdev. The new definition of success put forward in Corporation 2020 must factor in these costs.
For Patagonia, this is an old definition.
Founder Yvon Chouinard is not your ordinary businessman. He said more than once during his visit that he is not concerned about profit or growth. As he eloquently put it, quoting seminal environmentalist David Brower, “there is no business to be done on a dead planet.” Chouinard is confident that a simple focus on quality will carry Patagonia just fine, an attitude that allows Chouinard see the big picture, says Sukhdev.
The panel also dove into the responsibilities of a modern company beyond quarterly profits. Chouinard highlighted the importance of educating the consumer: They need to understand what it takes to make their jacket; they ought to be informed that the best purchase is sometimes no purchase. The leaders at Patagonia believe that, armed with the facts, consumers will make the right choice. They are so committed to this vision that they are campaigning to make discarded clothes and over-consumption “uncool.”
Patagonia also believes it has a responsibility to create a long-lasting product that takes into account what Sukhdev describes as “externalities,” or costs to people and the environment not typically disclosed in annual reports.
This approach is demonstrated in the story of Patagonia switching to organically grown cotton. As Chouinard described it, knowing the true costs of conventional cotton obligated Patagonia to do something about its products. And they did: in 1996, Patagonia converted its entire sportswear line to 100% organically grown cotton. They haven’t looked back since.
The discussion finally turned towards encouraging other companies to follow Patagonia’s example. Several solutions were offered. Vincent Stanley discussed the need for industry-wide standards and measurements that can give companies the ability to measure environmental costs of their products. After the event, Sukhdev also discussed the need for company-wide statements of intent to ensure that a corporation's goals are aligned with the goals of societies and communities in which it operates. To encourage this and level the playing field, we need governments to help develop and enforce rules and regulations.
The talk demonstrated that Patagonia is a true model of a Corporation 2020 because it has moved away from outdated definitions of success. If “greed is good” was the slogan for the 1980s and 1990s, Sukhdev suggests that this decade’s slogan should be “three dimensional capitalism.” And this is exactly what Patagonia is practicing.
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