The most reputable company in the US

Patagonia is a privately held American clothing company that markets and sells minimalist, colourful, high-quality outdoor clothing around the world. Over the years, the company has earned recognition for the quality of its clothes as much as for its ground-breaking environmental and social practices, all supported by masterful storytelling and brand-building practices.

After quite a lot of hype, Patagonia was named the coolest company on the planet by Fortune in 2007. The company ranked first in an Axios-Harris poll on the 100 most reputable U.S. companies in 2023 and it is widely recognized as one of the most socially and environmentally responsible companies in the world.

This is quite impressive for a company with only about 3,000 employees and a turnover of approximately $1 billion USD. Their journey and learnings are well documented and generously shared by the company online, as well as by their founder, who has authored several books on the topic.

What few may know is that Patagonia started out as a very ordinary company and that it has taken them decades to transform into the responsible company that they are today. A passion for the outdoors, however, seems to connect its products with the social and environmental initiatives they pursue.

Let us take a look at the unfolding of their journey.

Their journey

Patagonia was founded in California, USA, in 1973, by Yvon Chouinard, who can be described as an American rock climber, environmentalist and fly-fishing enthusiast. Today, he is a billionaire businessman in his early 80s who is still a strong believer in doing well by doing good. The history of Patagonia is actually impossible to separate from that of its founder.

It all seems to have begun in Yosemite, where the young Yvon Chouinard and his friends hid from the rangers as they spent a lot of their time climbing rocks and icefalls, feeling like rebels. Over the years, his climbing interest grew and eventually materialized in a company selling climbing equipment.

Vincent Stanley, who was one of Yvon’s first employees, and still holds a position as Director of Philosophy at Patagonia, describes the climbing-business as “a solid business, with a large percentage of the global market share in rock-climbing equipment. The size of the total market was however tiny. So although the business was self-supporting, profits were marginal.” After a trip to Scotland in the beginning of the 1970s, from whence Yvon Chouinard brought home a quality rugby shirt that his friends liked, a collection of ‘rugged technical clothing’ was established and Patagonia Inc. came to life. At this time, however, Patagonia was not intended to become a responsible company. Rather, it was seen as a way to provide some cushion for the equipment company.

As things developed, Patagonia became something much more than it was originally intended to be. Chouinard believes that the fact that they started out as a team of California climbers and surfers who spent a lot of time in nature may have helped them spot the unintended environmental consequences of industry and commerce earlier than others. Wanting to make a difference, they started supporting local activism with a focus on the protection and conservation of nature.

Vincent Stanley remembers the days: “from the beginning we supported small, local grassroots environmental organizations who tended not to receive help from foundations or individual charitable funders.”

Due to the founder’s unconventional background and approach, the company also developed into a place of personal growth with space for attaining personal goals. In 1984, they opened an on-site cafeteria offering mostly vegetarian, healthy foods and started providing on-site childcare. Also, the employees were given time to work on their activist callings.

In their early days, the mountaineering community relied on traditional materials such as cotton, wool and down for protection. Patagonia, however, looked for fabric properties better suited for mountaineering and started to use synthetic fibres that insulated well and dried quickly—although they were not optimized from a sustainability perspective. And at a time when outdoor products were mostly forest green, they soon started making their line in vivid colours. This was a huge hit, and they began growing at a rapid pace, adding new people without proper introduction and training. This came to a halt during a 1991 crisis in which they had to lay off 20 percent of their workforce. This also came to mark a huge shift, as they realised that they had become dependent on a growth that they could not sustain and that they themselves had contributed to some of the problems in the world. This made them contemplate what kind of business Patagonia should be going forward and why they were in business at all.

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To be continued… learn more in Better Business Better Future: Decode the Good Practices of Sustainability Trailblazers and Transform Your Corporate Business, by Elisabet Lagerstedt.