Money well spent

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In a well-attended session on the last morning of NRF 2019: Retail’s Big Show, Jeff Beer, senior staff editor at Fast Company, interviewed Rose Marcario, president and CEO of Patagonia Works and Patagonia Inc., about her company’s approach to living by its beliefs. Or, as Beer put it, whether you can do good and do good business at the same time.

Beer began by asking Marcario why Patagonia had changed its mission statement. “For a long time, the mission statement was, ‘Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis,’” he said. Recently, though, the company changed it to “Patagonia is in business to save our home planet.”

“The original mission statement was developed in the 1990s, and at the time it was sort of a groundbreaking thing to say we’re going to do no unnecessary harm, which meant that we would consider the impact our supply chain was having on the environment,” Marcario said.

“And it took years, I think, for the company to really embody that mission statement. Why did we change it? Because the climate crisis isn’t a forecast anymore. It’s real. It’s happening.”

Some of it happened recently to Patagonia, which is headquartered in Ventura, Calif., in an area affected by the wildfires of last summer and fall. “Seventy-five percent of my employees were evacuated because of these fires,” said Marcario. “We were talking with the firemen on the ground and they said they’d never seen anything like it — and that the techniques they were using weren’t working, because we’ve hit a dire state with the planet.”

In addition to changing the mission statement, Patagonia has become more direct about its political activism. As a result of the much-debated Tax Cuts and Jobs Act of 2017, for example, Patagonia received a $10 million reduction in federal taxes — all of which it donated to grassroots environmental organizations in what Beer called “a sort of generous protest” against those very tax cuts.

In 2018, and for the first time, the company endorsed a pair of political candidates, Jacky Rosen in Nevada and incumbent Senator Jon Tester in Montana, who have been outspoken on environmental and public lands issues. “It’s like you wanted to make your voice a little louder,” said Beer. “It’s not just about doing things anymore, but about communicating them.”

“It feels like a proportional response to what’s going on,” Marcario said. “In the very early stages of the current administration, they did something that had never been done in the history of the United States. With the stroke of a pen, they eliminated 3 million acres of public land. It’s being challenged in court now, and we’re one of the companies challenging it. That’s our heritage. Our national parks and public lands are sacred places.”

Turning to possible economic effects, Beer said, “So much of the discussion around companies doing these sorts of things, whether it’s taking political stands on social issues or even looking too deeply at their supply chain and sustainability, has to do with risk, whether it’s risk to profits or risk to their brand and reputation. Talk to me a little bit about that.”

“This last decade has been the best we’ve ever had in terms of our overall business,” said Marcario. “We grew out of a catalog company, so we’ve always had a very close relationship with our customers. People find the brand because they’re interested in the product, or someone introduces it to them, or they’re on the mountain and they go to a specialty shop that has our product. Then they get to know us, and they get to have a relationship with us. For us, the activism hasn’t been a big risk.”

As for other business leaders pondering activism? “The companies that do it in a way that’s really consistent with their values are rewarded for it,” Marcario said. “I think anybody who runs a company now is dealing with the issue of how divided the country is, and how bad that is for the country. I’ve got employees that don’t want to go home and see their families at Christmas. We’ve got to work on that as leaders.”

Patagonia worked on a campaign last year called Time to Vote, joining with 400 other CEOS to give employees time off to vote. “Good bipartisan initiative is necessary,” Marcario said, “and supply chain is the same thing. We were one of the first fair-trade apparel companies. We did the heavy lifting for the bigger companies that use those factories, and now they can become fair trade. There are things we can do together as an industry that will be really important to preserving this planet that we love, and to creating a better, more just world.”

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