Patagonia's Sustainability Leadership

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PATAGONIA:
TRANSMITTING SUSTAINABILITY
A Capstone
Presented to the Faculty of European University
In Partial Fulfilment of the Requirements for
The Degree: Bachelor in Business Administration
By: Jonathan James Carter
(January 26th
, 2015)

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ExecutiveSummary
The following thesis addresses the question: How organizations in the outdoor
industry, specifically The North Face (TNF), Columbia Sportswear Company (CSC), and
Recreational Equipment Inc. (REI) benefit from embedding sustainability into their
companies as Patagonia Inc. has done. Having learned from the economic crisis in
2009 that current business practices are susceptible to external changes, the world
must search for alternative methods. Customers who purchase products for the
outdoors essentially invest in the environment they intend to ‘play’ in. Using Michael
Porter’s concept of Creating Shared Value, any organization operating in the Outdoors
Market would do well to invest in sustainable methods.
Yvon Chouinard, the founder and sole-owner of Patagonia Inc. is known as the
pioneer of true corporate social responsibility. The company walks the talk so well; they
even transmit their message into consumer social responsibility; with customers playing
catch-up to their initiatives. Since the early 90’s, Chouinard and Patagonia have been
on a mission to ‘build the best product, cause no unnecessary harm, and use business
to inspire and implement solutions to the environmental crisis’.
By embedding sustainability into every facet of the business, Patagonia focuses on
four core-values: integrity, quality, environmentalism, and to not be bound by
conventionalism. It is through these values that stakeholders of Patagonia find
guidance. This led to a competitive advantage consisting of three key aspects:
organizational structure, transparency, and stakeholder engagement. In sequence, each
offers the ability to achieve the next. Privately held, now registered as a Benefit
Corporation, Patagonia is committed to sustainability by law. Their commitment to being
honest with all stakeholders increases the efficiency and effectiveness of suppliers and
employees, leaving customers satisfied with knowledge of a products true origin. This
opens up communication channels successively driving innovation all throughout.
A comparison of other companies in the outdoor, performance-apparel market
shows the importance of embedding sustainability into a company. The North Face
(TNF), Columbia Sportswear Company (CSC), and Recreational Equipment Inc. (REI)
each manufacture their own brand label while operating in their own unique way.

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The North Face is owned by the parent company VF Corporation. TNF began
sustainability initiatives in 2008. They continue to cut costs and invest in community
wide initiatives; geared at increasing participation and education, in and around the
outdoors. VF Corp. pushes for growth as TNF struggles to cope with a decline in loyal
customers and a shift towards more mainstream consumers, like those of CSC.
Columbia Sportswear Company is the parent company for a few other outdoor
brands. They position its main label as the quality, yet less expensive outdoor apparel.
CSC is publicly owned and family run. Their corporate social responsibility initiatives are
aimed at cost-cutting and marketing. CSC is susceptible to external changes in the
market, from warming winters to lacking consumer knowledge. They have yet to grasp
the need for stakeholder engagement as they attempt to grow as big as Nike.
Recreational Equipment Inc. was established as a Co-op for hard-core outdoor
enthusiasts. They acquired quality equipment from Europe for less money this way.
Membership has grown to over five million active members with $2 billion in annual
sales. A brick-and-mortar style business, they offer products from their own label and
every other leading outdoor brand. Today, they are dedicated to environmental
stewardship and provide courses and education to members. However, they lack the
urgency to require true changes from suppliers causing a glut in their supply chain
environmental efficacy.
The four companies were compared using the following: primary research in the
form of an online survey, secondary research from a publication differentiating between
‘mainstream sustainability’ and ‘hybrid businesses’, and from dissecting available
financial information. In conclusion, embedding sustainability into a company creates an
ability to endeavor a long, successful life. It forges a clear path for employees and other
stakeholders to adhere to, allowing for individuals to exercise greater freedom with a
stronger desire. Customers in the outdoor market are growing into sustainable initiatives
and will soon demand them from companies. Sustainability properly embedded into a
company drives a deep analysis of business practices in order to simplify, cut-costs,
increase efficiency, and eventually increasing the effectiveness of a business’s products
and services.

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Table of Contents
Executive Summary................................................................................................................... ii
List of Figures and Tables .....................................................................................................vii
Chapter 1: Introduction........................................................................................................1
Chapter 2: The Outdoor Market and High-Performance Apparel.............................3
Chapter 3: Patagonia Inc.....................................................................................................7
3.1 The Founder...................................................................................................................7
3.2 The “Dirt Bags”...............................................................................................................9
Chapter 4: Patagonia’s Sustainability Strategy ..........................................................13
4.1 Quality ...........................................................................................................................15
4.2 Integrity..........................................................................................................................16
4.3 Not Bound by Convention ..........................................................................................17
4.4 Environmentalism ........................................................................................................18
4.4.1 The Conservation Alliance..................................................................................19
4.4.2 1% for the planet ..................................................................................................19
4.4.3 The Footprint Chronicles.....................................................................................20
4.4.4 Common Threads Partnership...........................................................................22
4.4.5 Eco Index...............................................................................................................24
4.4.6 Recent Initiatives..................................................................................................24
Chapter 5: Key Aspects of Patagonia’s Strategy .......................................................26
5.1 Situational Analysis .....................................................................................................26
5.1.1 Threats...................................................................................................................26
5.1.2 Opportunities.........................................................................................................27
5.1.3 Weaknesses..........................................................................................................28

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5.1.4 Strengths ...............................................................................................................28
5.2 Impacts of Key Aspects ..............................................................................................29
5.2.1 Organizational Structure .....................................................................................29
5.2.2 Transparency........................................................................................................30
5.2.3 Stakeholder Engagement ...................................................................................31
Chapter 6: Analysis of Competing Companies...........................................................33
6.1 The North Face (VF Corporation) .............................................................................33
6.1.1 Overview................................................................................................................33
6.1.2 The North Face and Sustainability ....................................................................35
6.2 Colombia Sportswear Company ...............................................................................44
6.2.1 Overview................................................................................................................44
6.2.2 Environmental Responsibility at Columbia.......................................................46
6.3 Recreational Equipment Inc. (REI) ...........................................................................49
6.3.1 Overview................................................................................................................49
6.3.2 REI’s Environmental Stewardship Program.....................................................51
Chapter 7: Comparison of Companies..........................................................................58
7.1 Research Methodology...............................................................................................58
7.1.1 Survey Results......................................................................................................59
7.1.2 Survey Analysis....................................................................................................61
7.2 Main-stream Corporate Sustainability vs. Hybrid Organizations .........................63
7.2.1 Growth....................................................................................................................63
7.2.2 Profits .....................................................................................................................64
7.2.3 Integrating Stakeholders .....................................................................................64
7.2.4 Resources .............................................................................................................65

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7.2.5 Transparency and Cooperation .........................................................................66
7.2.6 Proactive Sustainability.......................................................................................66
7.3 Company Financials....................................................................................................67
7.3.1 The North Face.....................................................................................................67
7.3.2 Columbia Sportswear Company........................................................................68
7.3.3 Recreational Equipment Incorporated (REI)....................................................69
7.3.4 Patagonia...............................................................................................................70
Chapter 8: Conclusion.......................................................................................................71
Bibliography............................................................................................................................75
Appendices.............................................................................................................................83
Appendix 1: Patagonia and Selected Competitors (Financial Data) ..............................83
Appendix 2: Lost Arrow Corporation Financial ..................................................................84
Appendix 3: Lost Arrow Corporation Balance Sheet (FY 2010) .....................................85
Appendix 4: Patagonia's Environmental Commitment.....................................................85
Appendix 5: The Outdoor Industry Association’s ‘Eco-Index’ .........................................87
Appendix 6: REI Paper Policy - Source of Fiber ...............................................................88
Appendix 7: Survey of Patagonia.........................................................................................88

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List of Figures and Tables
Figure 3-1: Key Executives....................................................................................................10
Figure 4-1: “Buy Less” Campaign.......................................................................................16
Figure 4-2: The Footprint Chronicles .................................................................................20
Figure 6-1: TNF Solar Data ....................................................................................................38
Figure 6-2: TNF U.S. Facility Emissions ............................................................................39
Figure 6-3: Explore Your Parks ............................................................................................42
Figure 6-4: TNF Employee Volunteer Rates......................................................................43
Figure 6-5: REI Green & Renewable Energy.....................................................................53
Figure 6-6: REI Waste Stream...............................................................................................54
Figure 6-7: REI Employee Engagement Index..................................................................57
Table 6-1: TNF Warranty Repair Volume ...........................................................................37
Table 6-2: Explore Fund Metrics ..........................................................................................41
Table 6-3: CSC Consolidated Financial Data....................................................................46

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Chapter 1: Introduction
This thesis addresses the question: How organizations in the outdoor industry,
specifically The North Face (TNF), Columbia Sportswear Company (CSC), and
Recreational Equipment Inc. (REI) benefit from embedding sustainability into their
companies, as Patagonia Inc. has done.
It is important to note that Patagonia’s success over the previous decades is
synonymous with their environmental initiatives. The company continues to grow,
cementing their position in the outdoor industry for the long haul. Yvon Chouinard, the
founder, took his company from the back of his car to the global stage with revenues of
about 600 million dollars in 2013.1 Despite the increased investment in going “green”,
Patagonia became an example of how a sustainable business is beneficial for all
stakeholders.
Customers in the Outdoor Industry have a vested interest in the longevity of our
natural world as it has become their ‘playground’. Chouinard, an expert rock climber, ice
climber, skier, surfer, and kayaker, empathizes with his customers, driving sustainability
throughout every facet of the organization. Patagonia looks to the long-term, as every
business should. As Dr. David Brower, an avid mountaineer and charismatic
environmentalist from the early 20th century once said: “There’s no business to be done
on a dead planet”.2
Environmental programs have recently become part of political agendas in both
Western economies and the developing world. Governments around the globe are
beginning to work towards a low carbon economy. In October of 2014, EU leaders
agreed on a greenhouse gas reduction target of at least 40% compared to the levels in
1990.3 Companies need to change how they do business and respect all stakeholders.
1 Drake Baer. (2014, February 28). How Patagonia’s New CEO is Increasing Profits While Trying to Save
the World. Retrieved from http://www.fastcompany.com/3026713/lessons-learned/how-patagonias-new-
ceo-is-increasing-profits-while-trying-to-save-the-world [accessed 2014, August 27].
2 FORTUNE. (2007, April 2). Going Green. Retrieved from
http://summit.as/DBFx/Dokumenter/23/Fortune_YC_mainarticle.pdf [accessed 2014, June 7].
3 European Commission. (n.d.). 2030 Framework for Climate and Energy Policies. Retrieved from
http://ec.europa.eu/clima/policies/2030/index_en.htm [accessed 2014, June 7].

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Those looking for a competitive advantage must take steps to advance in the market
and create industry change rather than reacting to it. Michael Porter, Harvard Business
School professor and creator of the “5 Forces” industry analysis model, introduced the
world to a strategy called “creating shared value” (CSV). It helps to develop future
markets and simultaneously strengthens communities and economies, decreasing
social harms that create internal costs for firms.4 Through deep examination of
environmental problems, companies develop effective innovations satisfying the market.
Industries, such as the outdoor market, revolve around the natural world. The
customers, employees, and societies involved demand more than the pursuit of profits.
Businesses must adapt if they are to remain competitive.
This thesis begins by examining the outdoors and high-performance apparel
markets. An investigation into Patagonia’s early beginnings and insight into Patagonia’s
sustainability strategy and their core-values as a business is provided in chapter’s three
and four. The fifth chapter explains the impact of key aspects of their sustainability
strategy on the overall business. Chapter six looks at the history and current states of
the four companies: The North Face, Columbia Sportswear Company, and Recreational
Equipment Inc. Lastly, a comparison of the companies using primary and secondary
research underlines the benefits of embedding sustainability.
There are a number of limitations to the research conducted. First, there is little
availability of financial information for Patagonia after the year 2010. Request for
accounting information for the purpose of academic research was denied. Financial
information for The North Face as a separate entity from their parent company, VF
Corporation, is also limited. Research regarding each company’s future strategies was
derived from both past initiatives and from their mission statements as there were no
clear indicators available. Lastly, primary research was conducted in the form of a
survey. The target market was limited to Facebook users who liked the outdoors in
general, consisting of 40 participants. This thesis is discussed and analyzed by
accommodating for these limitations.
4 Michael Porter and Mark Kramer. (2011, January). Creating Shared Value. Retrieved from
https://hbr.org/2011/01/the-big-idea-creating-shared-value [accessed 2014, June 7].

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Chapter 2: The OutdoorMarket and High-PerformanceApparel
Patagonia’s market is essential to understanding their urgency for driving
sustainability throughout the organization. It sets the background for seeing why any
company operating in the outdoor market should strive to protect the planet they do
business on.
The ‘performance apparel’ segment, Patagonia’s main product offering, is thought
of as any garment that is created to perform or function for a purpose. It is a growing
segment in both the global apparel and outdoor industries. These products assist
athletes with maintaining body temperature, dryness, and high comfort levels with
moisture management technologies and other techniques.5 Outdoor enthusiasts looking
to develop a healthier lifestyle and who need more industrial wear in their daily lives
demand high-performance apparel. Active outdoor sports such as hiking, camping,
fishing, snow sports and paddling make up most of the industry’s foundation.
The segment continues to rise since it first came around in the 60’s. Market analysts
estimate that the current performance apparel segment is growing at double the pace of
the overall sports apparel sector.6 Even through the economic crisis, the segment as a
whole fared well. In Europe, the continuation of the sovereign-debt crisis hindered
spending across the continent, merely slowing growth. Globally, the segment averaged
10% annual growth over the last decade, with sales forecasted of €15.7 billion by 2018.7
The great outdoors is a place where people around the world can go to escape the
chaos of the city, making it truly a global industry. Performance apparel will continue to
grow at a faster pace for men than women, in North America, East Asia, and Europe,
5 Textile Exchange. (n.d.). Performance Apparel and its Global Market Trends. Retrieved from
http://www.teonline.com/knowledge-centre/performance-apparel-global-market.html [accessed 2014, April
7].
6 Yahoo! Finance. (2012, December 18). Market Research Report – Outdoor Apparel is the Fastest-
Growing Segment of the Global Sports Apparel Market. Retrieved from
http://finance.yahoo.com/news/market-research-report-outdoor-apparel-090800202.html, [accessed 2014,
April 7].
7 Thomson Reuters. (2013, July 11). Outdoor Clothing Makers Seek Growth as Europe Stagnates.
Retrieved from http://www.businessoffashion.com/2013/07/outdoor-clothing-makers-seek-growth-as-
europe-stagnates.html [accessed 2014, April 7].

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with underwear, fleece products, and weather resistant outerwear trumping all other
product categories.8
As consumers demand multi-functional clothing, new competitors are entering the
performance apparel market. Originally the niche segment was limited to a few
companies such as The North Face (VF Corporation) and Columbia Sportswear
Company. However, since the early 90’s multi-nationals like Nike and Adidas introduced
high-performance apparel (refer to Appendix 1). These ‘powerhouses’ increase the
need for innovation as they have the resources to expand globally and rapidly take
market share from smaller niche players. Still, most outdoor apparel companies lack the
initiative and urgency demanded by customers to change over to more sustainable
practices. An example of this was uncovered by the environmental organization,
Greenpeace, which commissioned two independent studies. They tested a total of 14
products from leading outdoor apparel companies to identify if PFC’s (see footnote for
explanation)9 were used. The results showed that PFC’s were found in the coatings
and/or waterproof membrane of all apparel tested. The North Face responded by saying
they were “in compliance or exceeded all federal and international use of chemical
products”.10 This passive approach shows a reaction to the use of environmentally
hazardous materials rather than a proactive one.
High-performance apparel was originally reserved for those in team sports, such as
rugby and football back in the 1970’s. Outdoor sports emerged during this time with only
a few competitors in the segment, each with a unique offering. The definition of quality
clothing also began to change with this new segment. Clothes needed durability to last
in extreme conditions and to be multi-functional. During the early 2000’s, the apparel
segment of the outdoor industry increased market share by 35%, while equipment
8 Textile Exchange. (n.d.). Performance Apparel and its Global Market Trends. [accessed 2014, April 8].
9 PFC (Perflourinated Compound): Class of chemical substances which belong to the larger family of
fluorinated chemicals which could potentially cause disruptions to the hormones. Guarantee’s the high-
performance of clothing, sleeping bags, tents, and shoes with water, dirt, and oil repellent properties.
Retrieved from http://www.epa.gov/oppt/existingchemicals/pubs/pfcs_action_plan1230_09.pdf [accessed
2014, April 8].
10 The North Face. (n.d.). Chemical Responsibility. Retrieved from
http://www.thenorthface.eu/blog/eu/en/chemical-responsibility [accessed 2014, April 8].

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decreased by 11%.11 The consumer group is broadening as technical apparel
aesthetics matches that of casual apparel. The target market now includes people in
urban centers, not just adventure seekers who live, work, and play in the mountains or
seas.
The emergence of outdoor sporting participants consistently grew since the late
90’s. So much so, that there is a polarized shift into two distinct target groups in North
America corresponding to transitions in the lives of the Baby Boomers (born 1946-1964)
and Millennials (born 1978-2003). This represents nearly 200 million people (78 million
& 100 million respectively), a majority of the population.12 These groups find similar
satisfaction in performing risky sports but in different ways.
Thirty years ago there was no guide book explaining the proper technique to
place ice climbing equipment safely and effectively or was there a river guide willing to
take a group of businessman down class 5 rapids. As the infrastructure to train and
provide safety information becomes accessible, more people pursue these types of
activities. However, outdoor sports are more than just activities. Over 3/4th’s of
participants in a 2004 study confirm that participating in outdoor activities gives them a
feeling of accomplishment, an escape from life pressures, and a connection with
themselves.13 These sports are often reflected by the person’s values, from which a
lifestyle develops. Skiing is an example of a lifestyle sport whereby participants often
spend more time relaxing at the bar on the ski slopes rather than actually skiing.
People’s behaviors, attitudes, and communication styles become a reflection of their
hobbies.
11 The Outdoor Industry Association. (2012). The Outdoor Recreation Economy [Technical Report].
[accessed 2014, April 8].
12 The Outdoor Industry Association. (2012). The Outdoor Recreation Economy [Technical Report].
Retrieved from
http://outdoorindustry.org/images/researchfiles/OIA_OutdoorRecEconomyReport2012.pdf?167 [accessed
2014, April 8].
13 The Outdoor Industry Association. (2004). Exploring the Active Lifestyle [Technical Report]. Retrieved
from http://www.outdoorfoundation.org/pdf/ResearchActiveLifestyleExecutive.pdf [accessed 2014, April
8].

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The two groups participate in the same sports, which require an emphasis on social
interaction. This interaction first began as a need for quality equipment, word-of-mouth
having the largest impact on consumer decisions. Faulty equipment has no place in
extreme environments which athletes partake in. However, throughout the 2000’s more
information regarding the deterioration of the natural environment spread and
Millennials became consciously aware of the damage. In their ‘social settings’, on the
ski slopes or camping grounds, both groups developed a need to protect their
‘playgrounds’. Today, they demand eco-friendly products, yet are not willing to sacrifice
any characteristics regarding quality or aesthetics.14 This means outdoor companies
must innovate and invest in new technologies in order to survive in such a competitive
industry.
Most companies are slowly implementing organic-cotton and recycled polyester into
clothing lines, while maintaining the quality of their products. Over 90% of consumers
are likely to purchase cotton athletic apparel over synthetics, if it performs similarly in fit,
style, and in quick-drying and moisture wicking. However, only 30% of organic cotton
apparel advertises these performance enhancing properties.15 Alternative methods are
available in the industry. Research and development is crucial for the procurement of
something financially viable for the outdoor market and its consumers.
Today, the focus in the industry remains streamlined towards quality and aesthetics.
Many continue to ignore a shift towards more environmentally conscious business
practices. If these businesses focus more on collaboration than competition, they will be
more in sync with future customer demands.
14 Textile Exchange. (n.d.). Performance Apparel and its Global Market Trends. [accessed 2014, April 8].
15 Cotton Incorporated. (n.d.). Athletic Apparel: A Robust Market. Retrieved from
http://www.cottoninc.com/corporate/Market-Data/SupplyChainInsights/Athletic-Apparel-A-Robust-Market/

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Chapter 3: PatagoniaInc.
Yvon Chouinard, the founder of Patagonia, has been the striving pioneer behind
their transformation into a company driven by sustainability. His steadfastness and
curiosity to always do better has led an entire industry to do more than what
governments regulate.
3.1 The Founder
Yvon Chouinard was born 1939, the son of a tough French-Canadian living in the
United States. His foreign background was the initial cause of his solitude. The young
entrepreneur spent his days inventing games near the ocean, creeks, and hillsides
surrounding Los Angeles.16 In 1953, Yvon and some friends from their Falconry Club
continued to practice and improve their rappelling skills in the San Fernando Valley. He
soon after stumbled upon the sport of rock climbing and found a new love for the
outdoors. Yvon spent entire summers climbing big walls in Wyoming. There he met
other climbers such as TM Herbert, Royal Robbins, and Tom Frost, all gunning for the
rock walls in Yosemite National Park. Driven by an urge to improve the durability and
functionality of climbing equipment for himself and his friends, Chouinard began making
and selling pitons17 from the back of his car. As word spread of his hard, re-usable
pitons, he sufficiently provided for his climbing and surfing lifestyle.
Although Chouinard was in business, he never considered himself to be a
businessman. He and his friends, known as the Valley Cong in Yosemite for their
rebellious behavior with the park rangers (hiding behind boulders to extend the 2-week
camping limit) took pride in the fact that their hobbies held no economic value.18 They all
had a disdain for the multi-nationals and everything they represented, believing whole
heartedly that they could escape it all by remaining in the outdoors. With demand
16 Yvon Chouinard. (2006). Let My People Go Surfing: The Education of a Reluctant Businessman. New
York, NY: Penguin Group Inc.
17 Piton: a pointed piece of metal used in rock climbing that is hammered into a crack in the rock in order
to hold the rope which is attached to the climber. Retrieved from http://www.merriam-
webster.com/dictionary/piton [accessed 2014, March 18].
18 Patagonia Inc. (n.d.). Company History. Retrieved from
http://www.patagonia.com/us/patagonia.go?assetid=3351 [accessed 2014, March 18].

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growing for Yvon’s pitons, he decided to partner with Tom Frost in 1965, an
aeronautical engineer with a keen sense for design and aesthetics. Producing and
selling climbing hardware out of Ventura, California, they named the company
Chouinard Equipment. The name soon became synonymous to the sport of climbing.
During the following nine years, the two redesigned and improved almost every climbing
tool, making them stronger, lighter, simpler, and more functional.19
Chouinard and Frost, well known in the climbing community for their big-wall
ascents, quality tested all of their equipment first-hand in the field, to innovate and test
the safety of each product. Dedicated to not only providing the best, but to also
improving products, Chouinard Equipment became the largest supplier of climbing
hardware in the U.S. by 1970.20 The two took their first steps in 1972 to decrease their
environmental or ecological footprint, the measure of human or business demand on the
Earth’s ecosystems. While climbers around the world were using Chouinard Equipment
Pitons (the Backbone of the business at the time), Yvon noticed the damage their tools
were doing during one of his climbs. Pitons were hammered into and then back out of
the rock, leaving it scarred and damaged for the next climber. Finding a need for
change, they phased out pitons completely and introducing aluminum chocks.21
Simultaneously, they introduced the first Patagonia Catalog discussing the
environmental hazards of pitons, including a 14-page essay on ‘Clean Climbing’ by
climber Doug Robinson. Within a few months of the catalog’s mailing, the piton
business had atrophied; chocks sold faster than they could be made.22 This was the first
step towards promoting a greater good for others, having understood the consequences
of their business practices.
As progressive with the sport of climbing as Chouinard was, he continued to
innovate all of his climbing equipment. “Where other designers would work to improve a
19 Patagonia Inc. (n.d.). Company History. [accessed 2014, March 18].
21 Aluminum Chalks: Different sizes of hexcentric shapes which can be placed by hand into cracks in the
rock and again removed by hand, leaving the rock unaltered by the passing climber. Retrieved from
http://www.traditionalmountaineering.org/Book_Chouinard1972Catalog.html [accessed 2014, March 18].

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tool’s performance by adding on, Tom Frost and I would achieve the same ends by
taking away – reducing weight and bulk without sacrificing strength or the level of
protection”-Yvon Chouinard.23 From climbing hardware, Chouinard and Frost moved on
to outdoor clothing in 1979, a Blue Ocean24 in the apparel industry at that time. Their
first product was a durable rugby shirt for the rough sport of climbing. Establishing a few
products for climbing apparel over the next few years they decided to spin-off the
division into its own company called Patagonia.
They would continue to run Chouinard Equipment until several law suits were
filed against Chouinard and Frost during the late 80’s (none involving faulty equipment
or climbers). Improper warning labels on products caused them to file for Chapter 11.
The old hardware company was bought by the employees and moved to Salt Lake City
where it continues to produce climbing and backcountry ski gear under the name Black
Diamond. Patagonia, now Chouinard’s sole company, was born with the intention of
milking an easy cash-cow25, due to considerably higher margins in apparel than in
hardware. The ensuing environmentally obsessed, daring, and abnormal company that
followed could never have been predicted by the owners, yet today they clearly
understand their role in leading by example.
3.2 The “Dirt Bags”
When Patagonia was created in 1979, Chouinard invited good friend and past
retail store manager Kristin McDivett Tompkins to be the company’s first CEO (see
Figure 3-1). He considered her to be a “Dirt Bag” climber and skier like himself, his term
for someone who wandered through “temp jobs and long summers,” pursuing a life of
adventure in the outdoors.26 Chouinard and his wife Malinda created and operated the
Lost Arrow Corporation in 1984 as the parent company for Patagonia. They made their
first dedicated move towards sustainability the year after by donating 1% of total sales
23 Yvon Chouinard. (2006). Let My People Go Surfing. New York, NY: Penguin Group Inc.
24 Blue Ocean Strategy: One of two “market spaces” which denotes all the industries not in existence
today—the unknown market space, untainted by competition, where demand is created rather than fought
over. Retrieved from http://hbr.org/2004/10/blue-ocean-strategy/ar/1 [accessed 2014, March 18].
25 Sergei Gil. (2013). Strategic Marketing [Lecture Notes]. Barcelona, Spain. European University.

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to environmental organizations. The company continued to grow from the mid-80’s as
sales jumped from 20 Million to 100 Million in just ten years, reinvesting profits back into
the company.27 After the success of their first retail store in Ventura, California, they
began opening two domestic retail stores per year after 1986. The first European store
in Chamonix, France in 87’ and one in Tokyo, Japan in 89’. Chouinard was however
haunted by two opposing problems throughout the 80’s: Is it possible to be as big as
Nike while making high-quality outdoor apparel and how are we affecting the
deterioration of the natural world.28
Figure 3-1: Key Executives
Yvon Chouinard traveled around the globe to the most extreme conditions to
field-test and enhance products. He was the idea guy practicing his MBA theory of
management (Management by Absence) while others back at the office transmitted
those ideas into tangible products. By 1989, Patagonia offered technical outerwear
hard-shells for mountaineering, skiing, paddling, fishing, and sailing, as well as

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insulation and underwear for all outdoor activities.29 Yvon and Malinda had pushed for
the Retail and Mail Order expansion in order to build more direct customer relationships
and to decrease sales to wholesalers, specifically larger department stores. The
company had developed a few distribution channels by this point, their own retail stores,
wholesalers and Mail Order. They refused to send out “new” catalog’s to customers
when only the cover changed. This caused mismanagement in the mail-order inventory,
eventually leading the company to funnel out ‘hoarded’ products to wholesalers who
would dump them on the market at low-cost.30 They eventually dropped certain dealers
who did not treat the Patagonia brand with enough respect, bringing inventory under
control.
Today the company is financially stable (refer to Appendix 2 and 3). The holding
company, Patagonia Works manages Patagonia, Inc. (apparel), Patagonia Provisions
(food), and Patagonia Media (books, films and multimedia projects) all under one CEO
Rose Mercario.31 Each company under Patagonia Works is registered as a Benefit
Corporation, ensuring that their ethos-led values live on in perpetuity.
Patagonia’s ability to strategize alongside their organic growth has paved the
way for many innovations as they work to become the model for a responsible
company. They continue to distribute high-performance outdoor apparel for climbing,
ski/snowboarding, surfing, fly fishing, and trail running through four distribution outlets:
Mail Order, Internet, Retail, & Wholesale. Foreseeing the warming of the planet, the
company has made shift into increasing their surfing product variety, including wetsuits
made from algae as a way to counter a drop in winter sales. In 2013, the surfing
category, representing 10% of their overall sales, were about $54 million, three times
greater than in 2009.32 Patagonia has also been heading “The Responsible Economy”
campaign. Rose Mercario alongside Mr. Chouinard believe that a Responsible
31 Patagonia Works. (n.d.). FAQ’s. Retrieved from http://www.patagoniaworks.com/faq/ [accessed 2014,
July 20].
32 Lauren Sherman. (2014, November 13). Surf’s Up For Indie Brands. Retrieved from
http://www.businessoffashion.com/2014/11/surfs-indie-brands.html [accessed 2014, November 18].

12
Economy is one that cultivates healthy communities, creates meaningful work, and
takes from the earth only what it can replenish.33
Over the next two years the company plans to search for the answers to current
global environmental questions regarding our current economic practices. This
ambitious initiative is surely not to be the last of Patagonia’s endeavors as their urgency
to prevail is in full-throttle.
33 Patagonia Inc. (n.d.). The Responsible Economy. Retrieved from

13
Chapter 4: Patagonia’s Sustainability Strategy
The strategy behind Patagonia’s success over the decades is due to their
dedication to true sustainability. It means more than just publishing an annual report on
environmental or social initiatives. Rather they must continuously analyze what they are
doing and how they could do it better. This is a mindset throughout the entire
organizational structure from the origin of each resource to the final stage of each
product and business practice.
When the credit-crunch hit in the 90’s even Patagonia succumbed to it. The
company’s shortfall came not from a decrease in sales, but from a mere 20% increase,
shy from a decade long 30-50% compound annual growth.34 Patagonia hired too many
employees in advance without sufficient training. Chouinard learned the hard way on
July 31st, 1991, Black Wednesday, when they had to cut their overhead and let go of
120 employees – 20% of the workforce.35 From this point, Yvon Chouinard began to
make his move towards “enlightenment”. The company had exceeded their resources
and became dependent on the global economy.
They needed to analyze how to achieve a sustained growth. Yvon took a dozen
of his top managers to the real Patagonia in the south of Argentina, to discuss why they
were in business. He wanted to discover the values they held in common, their shared
culture and the type of business they wanted it to become. When they managed to
finally put these values into words, they found the primary concern of the Patagonia
community was the loss of biodiversity, cultural diversity, and the planet’s life support
systems. They believe the “root causes of this situation include the basic values
embodied in our economic system, including those of the corporate world. Primary
among the problematic corporate values is the primacy of expansion and short-term
profit over other considerations such as quality, sustainability, environmental and
human health, and successful communities”.36

14
Opting for a long-term business, the company began to investigate their
ecological footprint. What they least expected, was to discover that cotton could be as
dangerous to the planets health as coal. In 1994, the company chose to take all their
sportswear to the 4-times more expensive organic cotton by 1996.37 They had only 66
products to changeover, however they found that there simply was not enough
commercially organic cotton available. To accomplish their goal, they had to go to the
bottom of their supply chain. They searched out the few organic farmers and convinced
the ginners and spinners to clean out their “contaminated” equipment. Patagonia
invested in other sustainable resources, such as recycled polyester, in the hopes of
making a more durable end-product. The move paid off as customers found Patagonia’s
products to be not only high-quality, but also environmentally friendly.
Patagonia has always held a desire to build the best product while consciously
contributing to the environment in which they often ‘play’. Back in 1991 when Yvon
Chouinard took his managers down to the real Patagonia in South America, they
developed the company mission: “Build the best product, cause no unnecessary
harm, and use business to inspire and implement solutions to the environmental
crisis.”
In order to facilitate it, they consolidated and simplified their core values:38
 Quality: Pursuit of ever-greater quality in everything they do.
 Integrity: Relationships built on integrity and respect.
 Not Bound by Convention: Their success – and much of the fun – lies in
developing innovative ways to do things.
 Environmentalism: Serve as a catalyst for personal and corporate action
38 Patagonia Inc. (2007). Corporate Social Responsibility. Retrieved from
http://www.patagonia.com/pdf/en_EU/social_response2.pdf [accessed 2014, March 25].

15
4.1 Quality
The first part of Patagonia’s mission “Make the best product,” is the foundation of
their business philosophy. Chouinard Equipment was founded with the purpose to
create lighter and stronger climbing ‘tools’ that your life could be dependent upon.
Designing 2nd tier clothing was not an option. This attitude of building the ‘best product’
inspires the entire Patagonia community to become the best at every step in the
process. As one of the first companies to create industrial apparel, the designers
developed a checklist of criteria when considering a products quality: Functional,
Multifunctional, Durable, Customer-Fit, Simple as Possible, Product Line Simple,
Innovation / Invention, Global Design, Easy Maintenance, Added-Value, Authentic,
Artistic / Fashion, and does it cause any Unnecessary Harm.39
By designing from the basis of satisfying a functional need helps focus the entire
process and eventually delivers a far superior product. Today, Patagonia relies on
“Ambassadors”40 to enhance products through extreme field-testing while Yvon
Chouinard is now focused on business practices. Walking the talk, Patagonia offers an
Ironclad Guarantee to all customers, guaranteeing everything they make for life. If a
customer is not satisfied with one of their products, they can return it for repair,
replacement or refund.41 This helps the company promote their “Buy Less” campaign
(see Figure 4-1), proving that a product should have an unlimited lifetime. If you are
willing to accept your product to be returned, a “Businessman” would make it last as
long as possible.
39 Chouinard, Y. (2006). Let My People Go Surfing. New York, NY: Penguin Group Inc.
40 Patagonia Ambassadors: work closely with the design department to test, refine and validate their
products in the harshest and most remote locations on the planet. They are not just athletes, but field
testers for Patagonia gear and storytellers for the Patagonia Community. Retrieved from
http://www.patagonia.com/eu/enES/ambassadors [accessed 2014, March 25].
41 Patagonia Inc. (n.d.). Patagonia Ironclad Guarantee. Retrieved from

16
4.2 Integrity
At Patagonia, every stakeholder is just as important as the next. Building trust
and transparency amongst each is crucial to achieving sustainability. Patagonia is an
ecosystem and suppliers and customers alike are integral to it efficacy and survivability.
As a small producer of climbing goods, Chouinard and Frost hand inspected every tool
that was made. The challenge is reproducing this dedication to a quality product on an
industrial scale. Involving the designer with the producer is the first of Chouinard’s
production principles. Both parties can improve their own work when they understand
the needs of the others. This led Patagonia to develop long-term relationships with
suppliers and contractors. The company has a strict code of conduct, in which suppliers
alike must adhere too. When they do not, Patagonia does not drop these companies but
rather works harder to make the necessary changes within. This helps build up the vital
communication channels between the two in order to create the best product while
considering environmental factors. Patagonia is willing to invest heavily in the
development of their suppliers because as a product driven company, success begins
with them.42
42 Luiz Diaz. (2014). Supply Chain Management [Lecture Notes]. Barcelona, Spain. European University.
Figure 4-1: “Buy Less” Campaign

17
Today’s distribution channels have been integrated fully to enhance each other.
Using Mail Order, Internet, Retail, & Wholesale, Patagonia has mastered the four in
concert, considering each to be essential to their relationship with the customer.43 The
first three channels are directly controlled by Patagonia and easily adjustable.
Developing a partnership with dealers is crucial as they become the voice of Patagonia.
Identifying the advantages for both parties is part of the transparency and trust that
ensures a long-lasting relationship. Chouinard believes deeply in customer satisfaction,
however in order to maintain their integrity, Patagonia will never sacrifice a products
quality over on-time delivery. This reflects their philosophy of doing things right, the first
time.
4.3 Not Bound by Convention
Ever since Yvon Chouinard’s early beginnings with Chouinard Equipment, his
management style has been anything but conventional. Patagonia’s headquarters in
Ventura, California are no exception. From the ‘barefoot’ employees to the lack of
offices, there is an egalitarian atmosphere present. As an avid outdoor enthusiast
himself, Chouinard has always offered a flextime and “Let My People go Surfing” policy:
employees may take time off of work to go surfing when the waves are just right, or
when the ‘snow gods’ have unleashed a blizzard on one’s favorite ski resort as long as
they complete their work. Even from the early 90’s Patagonia was one of the first 150
companies in the USA to introduce an on-site child care center, retaining valuable
woman in the company and maintaining a familial feel rather than corporate.44 Focused
on preserving their core values allows Patagonia to be adaptive, resilient and to
constantly embrace new ideas and methods of operation.
In lieu of their environmental activism, Patagonia encourages employees to undergo
a six week Internship with a non-profit organization of their choice, for a social or
environmental cause. By fully supporting employees own ambitious goals, Patagonia

18
receives a solid return from individualistic and creative employees who consistently
innovate through collaboration. Whenever there’s been a crisis, Patagonia’s best work
is done.45 A leader or CEO must always be willing to challenge their employees with
change or else the status quo will become stagnant and be buried under external
changes in the environment. By staying far from the traditional business strategies,
Patagonia continues its Zen Philosophy, focusing on finding the right processes rather
than looking merely for profit. This proves the correct course of action over and over
again as they manage to “change” industry standards and norms, such as the use of
organic cotton, sometimes a decade in advanced.
These core values guide everyone at Patagonia in everything that they do. They
are constantly reminded about why they are in business and what the company’s
mission is. Core values are embodied in the company by hiring those who are aligned
with them, following modern Human Resources practices.46 Patagonia’s capacity to find
similarly aligned employees both limits growth and offers a deep culture within through
shared values, streamlining operations.
4.4 Environmentalism
Patagonia has, through the values of its owners and employees, been concerned
for the health of our planet. The ability to continue enjoying the non-motor sports they
participate in, in the locations best suited for them, is degrading constantly. By 2039,
more than half of the 103 ski resorts in the Northeastern U.S.A. will not be able to
maintain a 100-day season.47 This advanced the Patagonia community to act
responsibly and urgently. They have even motivated other companies to join forces to
create more environmentally friendly practices. Patagonia, implementing many
innovative programs geared at solving the environmental crisis (refer to Appendix 4),
46 Charles, A. (2012). Human Resources Management [Lecture Notes]. Barcelona, Spain. European
University.
47 Katherine Seelye. (2012, December 12). Rising Temperatures Threaten Fundamental Change for Ski
Slopes. Retrieved from http://www.nytimes.com/2012/12/13/us/climate-change-threatens-ski-industrys-
livelihood.html?pagewanted=all &_r=0 [accessed 2014, June 14].

19
openly shares these practices with other companies. Their cooperativeness advances
technological and business process giving way to a revolution in clothing design.
4.4.1 The Conservation Alliance
The mission of the Conversation Alliance is to engage other businesses to fund
and partner with organizations to protect wild places for habitat and recreational
values.48 The organization collects annual membership dues. These are then distributed
as grants to organizations working to permanently protect wild places such as the
California Wilderness Coalition and the Canadian Parks and Wilderness Society.
The Alliance was created in 1989 when Patagonia, The North Face, REI, and
Kelty decided that through coopetition (cooperation between competition companies)49;
their environmental efforts would have a worthier impact. There are now more than 160
member countries who have contributed more than $6.5 million to the North American
conservation projects since their inauguration.50
4.4.2 1% for the planet
Yvon Chouinard and good friend Craig Mathews, owner of Blue Ribbon Flies,
founded 1% For the Planet in 2002. Both men understood the importance of protecting
vital business resources. 1% for the Planet’s mission is to build, support and activate an
alliance of businesses financially committed to creating a healthy planet. In just over 10
years 1% for the Planet has grown into a global movement of more than 1200 member
companies and 3,300 non-profits in 48 countries, all donating at least 1% of annual
48 The Conservation Alliance. (n.d.). Mission and History. Retrieved from
http://www.conservationalliance.com/about [accessed 2014, June 14].
49 Jan Kingsley. (2014). Leadership and Team Building [Lecture Notes]. Barcelona, Spain. European
University.
50 FootZone. (n.d.). The Conservation Alliance. Retrieved from
http://www.footzonebend.com/community/conservationalliance [accessed 2014, April 14].

20
sales to sustainability initiatives, together totaling over $100 million.51 Members use the
1% For the Planet logo on products allowing customers to feel confident about where
their money goes.
4.4.3 The Footprint Chronicles
This is one of the most unique and innovative methods Patagonia developed to
increase transparency. The Footprint Chronicles, created in 2012, is an online tool for
anyone to evaluate the company’s entire supply chain, from both social and
environmental standpoints (see Figure 4-2). They not only display the factories and mills
in which workers are treated above standard, but also the problematic ones in which
they are working hard to change. They hope to encourage customers to make more
informed decisions about the clothing line. Simultaneously, they embolden other
businesses to divulge information about their own supply chains, successively pushing
51 One Percent for the Planet. (n.d.). Historty. Retrieved from
http://onepercentfortheplanet.org/about/history/ [accessed 2014, April 14].
Figure 4-2: The Footprint Chronicles

21
them to clean up their factories.52 Patagonia works constantly to improve the working
conditions and quality of products in their own supply chain through various methods
described below. Each fosters the relationship with suppliers and customers, through
transparency and authenticity.
4.4.3.1 Bluesign Standard Limits
Established in 2000, Bluesign considers the production process as a whole:
resource productivity, consumer safety, air emission, water emission, and occupational
health & safety. Input Stream Management helps the textile business to produce in an
environmentally friendly and resource-efficient way. It combines both the economic and
ecological advantages for the benefit of everyone involved.53 Patagonia uses Bluesign
certification to ensure the most sustainable textile production, eliminating harmful
products right from the beginning and setting control standards for environmentally
friendly and safe production.
4.4.3.2 Raw Materials Social Responsibility Program
One of the longest and most important initiatives of Patagonia, this program is
crucial to their mission of building the ‘best product and causing no unnecessary harm’.
It requires that all of Patagonia’s fabric and trims suppliers audit their factories for key
social responsibility indicators: hiring practices, employee grievance mechanisms,
recycling policies and other social and environmental efforts. Implemented in the mid
1990’s, the program offered a way to monitor garment factories for social compliance,
leading to the formation of the Fair Labor Association.
4.4.3.3 Fair Labor Association (FLA)
Since 1999, the FLA has led a global effort to solve workplace abuse with the
help of socially responsible companies, universities, and civil society organizations.
They offer the resources and training to companies and workers alike, conducting due-
52 Joseph Tohill. (2012, May 18). Patagonia Maps out its Supply Chain with “The Footprint Chronicles”.
http://www.the9billion.com/2012/05/18/patagonia-maps-out-its-supply-chain-with-the-footprint-chronicles/
53 Bluesign.(n.d.). Approach. Retrieved from http://www.bluesign.com/home/approach#.U0JmGPkbVb4
[accessed 2014, May 5].

22
diligence through independent assessments and increasing transparency and
accountability. This year Patagonia launched ten new clothing styles, each a Fair Trade-
certified product.54 For every product sold, the company will donate it to worker’s funds,
where the staff will have the option of taking the premium cash in the form of a bonus.
These initiatives directly affect the ability of Patagonia to regularly deliver high-quality
products.
4.4.4 Common Threads Partnership
This initiative is a pledge between Patagonia and its customers to make all
decisions with sustainability in mind. It is a partnership to reduce excess consumption
and give the planet’s vital systems a rest from pollution, resource depletion, and
greenhouse gases. The following five “R’s” are pursued in order of importance so as to
eventually close the loop on a products lifecycle and eliminate its environmental
footprint altogether.55
1. Reduce: If one is to properly implement a ‘recycling’ program, then one must
first look at how they can reduce consumption in the first place. Through Bluesign audits
and a focus on building quality products, Patagonia pledges to redouble their efforts to
make useful, long-lasting products. In turn they ask their customers to pledge ‘not to buy
what they do not need or what will not last’.
2. Repair: Next, Patagonia asks customers to repair before replacing. Their step-
by-step guide on Ifixit.com offers ‘Learn to Sew’ and ‘Product Care’ information.56 The
company’s Ironclad Guarantee upsized their repair department to handle a higher
volume and return it to the customer expediently.
54 Stephen Kennett. (2013, November 1). Patagonia to Ringfence Revenues from New Fair Trade
Products. Retrieved from https://www.2degreesnetwork.com/groups/2degrees-
community/resources/patagonia-ringfence-revenues-new-fair-trade-products/ [accessed 2014, June 5].
55 Chouinard, Y. and Stanley, V. (2012). The Responsible Company: What we’ve learned from
Patagonia’s first 40 years. Ventura, CA: Patagonia Books.
56 IFixit. (n.d.). Patagonia Common Threads Partnership: Repair. Retrieved from
http://www.ifixit.com/patagonia [accessed 2014 June 8]).

23
3. Reuse: Next is to reuse or recirculate what one no longer wears. Patagonia
established a program on E-Bay for customers to sell their own used gear along with
Patagonia’s own used gear offering. As of September 2013, the company announced
the opening of their Worn Wear™ section. Customers can purchase used Patagonia
clothing from four locations across the US. If clean and in good condition, customers will
receive credit for bringing in clothes for resale (possibly up to 50% of the items original
price) which is then to be resold through the Common Threads Worn Wear™ section.57
4. Recycle: This is a key component of reducing waste and conserving natural
resources. Since July 2005 the company recycled 56.6 tons of worn out Patagonia
clothing and gear. To do this, the company consciously invested in E-Fibers including
recycled polyester, organic cotton, hemp, chlorine-free wool, recycled nylon and
TENCEL® lyocell.58 Today, customers can return any Patagonia product ever made
and it will be reused or recycled into new fabric for a new product.
5. Reimagine: In 2011, Patagonia added this 5th “R” to the mantra. Mutually,
they pledge with the customer to re-imagine a world in which we take from nature only
what it can replace. This last one underpins the other four by keeping the long-term
view in mind.59 Having used Goose feathers in products since early 2000’s (such as in a
“down” insulated jacket), the company took 6 years to create their ‘Traceable Down
Standard’. Since fall 2014, Patagonia uses only 100% traceable “down” in those product
categories.
An external audit system begins with the farm where the eggs are laid and ends
at the garment factory, where the “down” is placed in jackets and other products.60 For
half a decade the company believed their “down” was sourced socially and
57 PR Newswire. (n.d.). Patagonia Worn Wear ™ Section Now Open in Seattle. Retrieved from
http://www.prnewswire.com/ news-releases/patagonia-worn-wear-section-now-open-in-seattle-
224239031.html [accessed 2014, June 8].
58 Patagonia Inc. (n.d.). Patagonia Common Threads Partnership: Recycle. Retrieved from
http://www.patagonia.com/eu/enES/ common-threads/ [accessed 2014, June 9].
59 Chouinard, Y. and Stanley, V. (2012). The Responsible Company. Ventura, CA: Patagonia Books.
60 Environmental Leader. (n.d.). Patagonia to use 100% Traceable Down. Retrieved from
http://www.environmentalleader.com/2013/11/14/patagonia-to-use-100-traceable-down/ [accessed 2014,
June 9].

24
environmentally responsibly until a third-party accused them of using a ‘corrupted
supply chain’. This led the company to reimagine the methods in which they could
select “down” vendors that would ensure complete transparency.
4.4.5 Eco Index
Patagonia’s most prominent initiative is in development with the Outdoor Industry
Association (OIA). The Eco Index or Higgs Index is an environmental tool designed to
advance sustainability practices in the industry. It provides companies throughout the
supply chain a way to benchmark and measure the environmental impact of a product
over its lifetime. By enhancing transparency and communication in the supply chain,
companies will more effectively be able to incorporate environmental considerations into
the design and management of any product.61 The projects output and tools have a
wide range of applicability in other industries and sectors. It will be the new standard
supply chain tool supporting environmental goals (refer to Appendix 5).
4.4.6 Recent Initiatives
Patagonia continues to extend their environmental reach. Examining the third
part of their mission, ‘use business to inspire solutions to the environmental crisis’, they
decided to expand two more divisions under Patagonia Works: a new in-house venture
fund called $20 Million and Change and a start-up called Patagonia Provisions. The
venture will consider a startup’s social and environmental impact rather than economic
returns. Focusing on cultivating those who share Patagonia’s values, such as using only
sustainably sourced cotton, reducing waste, and carefully examining how supply chains
affect workers.62 The first company chosen uses pressurized CO2 to dye clothing rather
than copious amounts of water, offering future cooperation between the two companies.
61 European Outdoor Group. (n.d.). Eco Index. Retrieved from
http://www.europeanoutdoorgroup.com/conserve-sustain-care/sustainability/eco-index [accessed 2014,
June 9].
62 Caroline Winter. (2013, May 6). Patagonia’s Latest Project: A Venture Fund. Retrieved from
http://www.businessweek.com/articles/2013-05-06/patagonias-latest-product-an-in-house-venture-fund
[accessed 2014, June 18].

25
Patagonia Provisions offers organic and sustainably sourced food such as jerky
from grass fed, free roaming bison and wild sockeye salmon caught by native tribes.63
Although food is a territory far from high-tech outdoor apparel, it is much closer to
Patagonia’s mission. Agriculture is responsible for an estimated 15% of greenhouse
gases, which, in terms of its contribution to global warming, is 23 times more powerful
than carbon dioxide.64 If the world is to be truly sustainable, a re-examination of our food
supply is a must and Patagonia aims to inspire others.
63 Erika Fry. (2014, April 9). More than Jerky: Patagonia Expands in Food. Retrieved from
http://fortune.com/2014/04/09/more-than-jerky-patagonia-expands-in-food/ [accessed 2014, June 18].
64 Damian Carrington. (2014, December 3). Eating Less Meat Essential to Curbing Climate Change, says
Report. Retrieved from http://www.theguardian.com/environment/2014/dec/03/eating-less-meat-curb-
climate-change [accessed 2014, December 10].

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Chapter 5: Key Aspects of Patagonia’s Strategy
Patagonia has been successful over the past decades due to a few key aspects
which have paved the way for most of their initiatives. They are important for the pursuit
of sustainability for any company. Most critically, these have been vital in mitigating
external risks many in the outdoor industry face.
5.1 Situational Analysis
A thorough analysis of both internal and external variables must be considered in
order to understand the key aspects of Patagonia’s strategy. With over 40 years in
business, Mr. Chouinard has unconventionally influenced the market and many of the
standard business operations as well.65 Through an analysis of the company’s four core
values (refer to Chapter 4), it is possible to extract certain capacities they have which
correspond to the external environment. In lieu of this, it is necessary to perform a
TOWS (Threats, Opportunities, Weaknesses, and Strengths) analysis66, rather than a
SWOT, so as to better identify their true strengths and weaknesses in relation to
externalities.
5.1.1 Threats
Since Yvon Chouinard first saw how his, once most sought after, piton destroyed
the rock face, he understood the current threat Patagonia faces: Climate Change. The
world may be able to adapt to this, however particular elements of the outdoor industry
could cease to exist if major changes are to occur. The current average of 150 days per
season ski season directly impacts Patagonia’s bottom line. Winter is half the season
for any outdoor company. Their ability to find and or create demand during that time is
important to be successful.
65 Kristall Lutz. (2011, January 27). What Makes Patagonia “The Coolest Company on the Planet”.
Retrieved from http://www.opportunitygreen.com/green-business-blog/2011/01/27/what-makes-
patagonia-the-coolest-company-on-the-planet-insights-from-founder-yvon-chouinard/ [accessed 2014,
November 5].
66 Christine Clarke. (2012). Foundations of Business Management [Lecture Notes]. Barcelona, Spain.
European University.

27
Secondly, the continuation of the economic crisis may at first glance appear ‘ok’
for Patagonia.67 They claim consumers make smarter, longer lasting purchases during a
recession. Yet, if Patagonia truly believes in building a sustainable future, everyone
must prosper. They may find it easier to educate customers in tough times; however
customers may not listen when their security is threatened.
5.1.2 Opportunities
The emergence of the outdoor industry in the last decade attracts a broad range
of individuals. Both young and old, people are actively participating in the outdoors. The
Patagonia brand effectively created its own lifestyle, one which becomes easier to
associate with for those interested in extreme sports and the outdoors. The apparel
sector alone in the outdoor industry captured 35% market-share (see Chapter 2).
Patagonia has a chance to capture the minds and hearts of new customers in the
industry.
Also the performance apparel segment continues to grow. Anticipating global
sales of over 18 billion dollars by 2018 (see Chapter 2) the segment will increase
market-share in the overall sports apparel sector. This trend shows Millennials are
switching activities towards ones requiring performance enhancing technologies,
leading us to the last opportunity.
The development of new technologies in every facet of the business world
enables Patagonia to meet their goals. The opportunities provided by the Eco-Index
(see Chapter 4.3.5) alone substantially increases information about the long-term costs
of ‘conventional business’. The persistent research, development, and sourcing of e-
fibers continues to decrease those costs and increase benefits. As technological
innovations regarding sustainability become available, all stakeholders benefit.
67 Olivia Wetzel. (2014, November 19). Financial Crisis Remains, says Expert. Retrieved from
http://www.nyunews.com/2014/11/19/inequality/ [accessed 2014, November 21].

28
5.1.3 Weaknesses
Internally, they are always preparing for the long-term. The biggest drawback
from Mr. Chouinard’s decades of business: they have built such reliable, functional, and
durable products that compromising quality for more ‘eco-friendly’ alternatives becomes
very difficult. Their commitment to “building the best product” constantly brings them to
a crossroad. Polyester, derived from oil, is not renewable, yet it is a very high-
performing fiber. Employees must determine whether the harm caused by the
production and use of polyester is ‘necessary’ or not. To this extent, their values of
“Quality” and “Environmentalism” can be dichotomous in the short-term.
A second weakness facing the company: internal expansion. As the company
grows, their ability to find individuals who equally, if not more so believe in Patagonia’s
mission diminishes. The workforce is creative and intelligent, though not everyone will
as effectively “Walk the Talk” like Mr. Chouinard. His unconventional management style
(Management By Absence) leaves Patagonia vulnerable to a lack of continuity in
sustainability practices.
5.1.4 Strengths
Being a Private company allows freedom to innovate in line with Patagonia’s
mission. However it is their internal collaboration that extends far beyond the doors of
the Ventura headquarters. Their commitment to Integrity leads to lasting relationships
with suppliers and customers, the development of the Fair Labor Association, 1% for the
Planet, and the Conservation Alliance (see Chapter 4.3). Their transparent
communication across all stakeholder channels (The Footprint Chronicles) propels the
company’s growth year on year.
Advertising at Patagonia is a low priority proving that their success in the last
decade is attributed to brand equity. Many customers, especially in North America,
moved from brand awareness, to brand insistence as the company is useful and shows

29
useful information to enhance people’s lives.68 Mr. Chouinard creates products that he
would use in life and death situations. Patagonia’s commitment to developing a ‘hand-
like’ inspection model on an industrial scale, as well as a ‘hands-on’ field testing model
continues to enhance the design and materials of their products.
A focus on “building the best product” since the 60’s turned an intangible asset,
intellectual propriety, into a strength. The internal knowledge and collaboration from
employees (often times end-users themselves) allows Patagonia to innovate products
and processes. This has led to them increasing their surf wear collection, preparing
themselves for an Earth in global warming. Although Yvon Chouinard is the guiding
force, he could never have achieved so much without a team of individuals behind him.
Their ability to empathize with customers gives them a competitive advantage over
other players, many of which search for employees with MBA’s rather than a
background in skiing.
5.2 Impacts of Key Aspects
The following three key aspects: Organizational Structure, Transparency, and
Stakeholder Engagement are interconnected. Each is required to ensure the full
commitment to the other aspects. This allows the company to embed sustainability into
their mission statement and be actionable.
5.2.1 Organizational Structure
A second key aspect to Patagonia’s strategy is in the organization of the
company. Up until 2012, Patagonia was incorporated as a privately owned company,
allowing Yvon Chouinard to do as he wished. In January of 2012 though, they became
the first company in California to register as a “Benefit Corporation”.
As a private company, Yvon Chouinard chose a direction for Patagonia. Instead
of profit maximization, they acted in favor of all stakeholders, remaining true to their
68 Meredith Berg. (2013, December 17). Why Advertising is ‘Dead Last’ Priority at Outerwear Marketer
Patagonia. Retrieved from http://adage.com/article/cmo-strategy/advertising-dead-priority-
patagonia/245712/ [accessed 2014, November 21].

30
core values. Now, as a Benefit Corporation, they must commit to creating an
overarching “general public benefit”. Considering an array of stakeholders beyond just
shareholders, including workers, suppliers, the environment and the local community
and are protected by law for doing so in case they go public.69 Under today’s current
system, shareholders have the legal right to sue corporate boards for not maximizing
profits. For the first few decades, Patagonia led the industry and pioneered Corporate
Social Responsibility.70 Once the law caught up to Patagonia, they easily transferred to
a “Benefit Corporation”.
5.2.2 Transparency
Yvon Chouinard, once said “How you climb a mountain is more important than
reaching the top”, and applied this concept throughout his high-performance, outdoor
apparel company.71 In business terms, day-to-day operations are as important as long
term objectives. Through transparency in Patagonia’s business practices, employees
have the opportunity to routinely act in favor of the environment. This aspect of their
strategy led to the creation of the Footprint Chronicles, allowing stakeholders to
effectively examine a products life-cycle and their unique marketing campaign dubbed
“Buy Less”.
In 2012—after 9 months of pleading customers to ask themselves: do I really
need a new fleece jacket and all the carbon output that comes with it?—Patagonia sales
increased nearly one-third, to $543 million, as the company opened 14 more stores.72
Patagonia employees transparently educated customers and the company benefited
economically. The increase in revenue appears to contradict the ‘reduce, reuse, repair,
recycle’ mantra of Patagonia. However, Yvon Chouinard says this increase was not
69 John Tozzi. (2012, January 4). Patagonia Road Test New Sustainability Legal Status. Retrieved from
http://www.bloomberg.com/news/2012-01-04/patagonia-road-tests-new-sustainability-legal-status.html
[accessed 2014, November 21].
70 Melissa Pongtratic. (2007). Greening the Supply Chain: A Case Analysis of Patagonia [Case Study].
Retrieved from http://irps.ucsd.edu/assets/021/8430.pdf [accessed 2014, November 21].
72 Kyle Stock. (2013, August 28). Patagonia’s ‘Buy Less’ Plea Spurs More Buying. Retrieved from
http://www.businessweek.com/articles/2013-08-28/patagonias-buy-less-plea-spurs-more-buying
[accessed 2014, November 21].

31
from old customers buying more, but from new customers switching to Patagonia.73 If
they can change consumer habit to purchase from a more responsible company, that is
better than purchasing from an irresponsible competitor.
5.2.3 Stakeholder Engagement
Engaging all stakeholders and committing to long-term relationships is a part of
Patagonia’s philosophy. However, one important element to this final aspect is taking
necessary risks with or without stakeholder approval. The decision to switch from
conventional cotton to organic cotton in 1996 was implemented without the support of
government, customers, suppliers or even some executives. Patagonia guaranteed a
long-term contract to convince suppliers to transition over to organic cotton farming.74
The company is today an example for others in the apparel industry looking to source
cotton organically on an industrial scale.
As a first mover in environmental initiatives such organic cotton and their
collaboration with others in the industry, the Sustainable Apparel Coalition was born.
‘Through multi-stakeholder engagement, the Coalition seeks to lead the industry toward
a shared vision of sustainability. It is built upon a common approach for measuring and
evaluating apparel and footwear product sustainability performance that will spotlight
priorities for action and opportunities for technological innovation.’75 Their persuasion
over competitors to commit to sustainable processes, benefits Patagonia. For example,
the more demand there is for organic cotton, the price to acquire the material goes
down as supply increases76. To this extent, Chouinard leads the way for businesses
73 GreenBiz. (2014, July 18). Yvon Chouinard: The Company as an Activist [Video File]. Retrieved from
https://www.youtube.com/watch?v=sbsLeXldDrg [accessed 2014, November 21].
74 Chuck Culp and Justin Purnell. (2012, October 6). Making The Ecosystem Part of Your Ecosystem:
Patagonia Moves to Organic Cotton [Technical Report]. Retrieved from
http://faculty.tuck.dartmouth.edu/images/uploads/faculty/ron-adner/Patagonia__Organic_Cotton_-
_Culp+Purnell.pdf [accessed 2014, November 21].
75 Sustainable Apparel Coalition. (2014). Overview. Retrieved from
http://www.apparelcoalition.org/overview/ [accessed 2014, November 21].
76 Wetherall, J. (2012). Micro-economics [Lecture Notes]. Barcelona, Spain. European University.

32
looking to ‘minimize their environmental impact, thus decreasing their long-term costs’77
and simultaneously building something of quality.
Overall, these key aspects are basic ideas, yet provide depth for an employee’s
job. Now as a Benefit Corporation, they must continuously understand the ever
changing external communities around Patagonia. Transparency becomes more difficult
the larger the supply chain and increased complexity of business practices. Whereas
stakeholder engagement requires a constant focus on their needs and desires to ensure
maximum effectiveness.78 These aspects keep Patagonia focused on the long-term
objectives and goals.
77 Queensland Government. (2013). The Benefits of an Environmentally Friendly Business. Retrieved
from http://www.business.qld.gov.au/business/running/environment/environment -your-business/benefits-
environmentally-friendly [accessed 2014, November 21].
78 Christine Clarke. (2011). Foundations of Business Management [Lecture Notes]. Barcelona, Spain.
European University.

33
Chapter 6: Analysis of Competing Companies
A more in depth look at three select companies in the outdoor market will provide
credibility to Patagonia’s sustainability strategy. The following companies have been
chosen because of their competition, collaboration, and differing organizational structure
to that of Patagonia.
1. The North Face (TNF):
a. Subsidiary of VF Corporation (Public Company)
b. Direct competitor to Patagonia
c. Member of Outdoor Industry Association, Conservation Alliance, Fair
Labor Association and Sustainable Apparel Coalition
2. Columbia Sportswear Company (CSC):
a. Corporation with several subsidiaries (Public Company)
b. Direct competitor to Patagonia
c. Member of Outdoor Industry Association, Conservation Alliance, Fair
Labor Association and Sustainable Apparel Coalition
3. Recreational Equipment Inc. (REI):
a. Consumer Co-op
b. Direct competitor and distributor of Patagonia, also sells outdoor hardware
c. Member of Outdoor Industry Association, Conservation Alliance, and
Sustainable Apparel Coalition
6.1 The North Face (VF Corporation)
6.1.1 Overview
The North Face brand has been around since the very beginning of high-
performance outdoor equipment. It was named for the coldest, most unforgiving side of
a mountain. Ironically, the idea for the mountaineering retail store began in San
Francisco in 1964, at an altitude of only 50 meters on a beach.79 By 1968, the current
owner, Dick “Klopp” Hopkins, began designing and manufacturing The North Face’s
79 The North Face. (n.d.). Over 40 Years of Innovation and Exploration. Retrieved from
http://www.thenorthface.com/en_US/our-story/ [accessed 2014, July 15].

34
own brand of technical outdoor apparel and equipment. Throughout the 70’s, the
company helped fund outdoor excursions around the globe, further cementing The
North Face’s position in the industry. The employees of The North Face enjoy playing in
the outdoors, often in untouched corners of Earth, leading to the mantra and mission
statement “Never stop exploring”.80 Here the company found a segment where they
could produce more functional equipment, for those who push the limits.
By the 90’s, The North Face offered full toe-to-head set-up for a number of
outdoor sports, helping athletes to explore further into the wild. Over the previous
decades, introductions of “down” parkas, Gore-Tex ski jackets, and movable hip straps
on backpacks helped build a loyal following of outdoor enthusiasts. Since 74’ the
company promoted the use of solar power and encouraged innovations through
ecological means. Yet, over the years The North Face has passed through many
holding companies experiencing financial problems more than once. 81 This is common
when working in a niche industry where there are limited customers. Not to mention the
constant innovation from competitors.
One’s ability to sustain growth is limited by these two factors and innovative
ideas are necessary not just in product development, but also through business
processes. The largest area of opportunity for The North Face to expand into during the
90’s was casual apparel.82 This helped them gain a foothold into the leisure apparel
industry, thus increasing their market share. Although competition from other outdoor
companies remained, The North Face brand recognition built up a loyal following.
Today, as a wholly owned subsidiary of the VF Corporation, The North Face
offers technically advanced products to accomplished climbers, mountaineers, snow
sport athletes, endurance athletes, explorers and urban dwellers.83 By collaborating with
80 The North Face. (n.d.). Over 40 Years of Innovation and Exploration. [accessed 2014, July 15].
81 Compass: Chartering the Evolution of Outdoor Gear. (n.d.). The North Face History. Retrieved from
http://www.inov8.au.com/compass/northfacehistory.html [accessed 2014, July 20].
82 Funding Universe. (n.d.). The North Face Inc. History. Retrieved from
http://www.fundinguniverse.com/company-histories/the-north-face-inc-history/ [accessed 2014, July 20].
83 VF Corporation. (n.d.). Our Brands. Retrieved from http://www.vfc.com/brands/outdoor/the-north-face
[accessed 2014, July 20].

35
leading ambassadors in their respective sports, the company remains at the forefront of
product innovation. However, not until the last 5 years have they refocused efforts on
sustaining the world in which their stakeholders live and play. Today they work to inspire
a movement of outdoor exploration and one of conservation.
6.1.2 The North Face and Sustainability
More recently, The North Face took on a leading role in sustainable business
practices. With the following focus areas: Product Leadership, Operational Efficiency,
and Community Engagement84, the company is on path to a more planet-friendly
business model. With the addition of their first sustainability report published in 2010,
they have applied transparency to better communicate and engage with customers.
6.1.2.1 Product Leadership
Apart from the pursuit of product superiority through innovations, The North Face
looks to develop environmentally and socially responsible products. As a member of the
Sustainable Apparel Coalition, they use the Higgs Index to assess product lifecycles.
From this they deduced the majority of their environmental impact comes from the
processing of materials and manufacturing of products.85 For this reason, they began
innovating materials used in high-volume products. In 2008, all new Denali Fleece
jackets were created with 65-87% recycled content, using post-consumer waste from
soda or water bottles. Four years later this increased to 100%.86 This enables the
company to use waste they have already created and turn it back into products of value.
Through product examination, they have developed more efficient ways to dye
their clothes where water, chemical, and energy consumption is reduced. Partnering
with Bluesign textile industry experts help mills reduce their impact. As an ineffective
84 The North Face. (n.d.). Sustainability: Overview. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/ [accessed 2014, July 25].
85 The North Face. (n.d.). Sustainability: Product Leadership. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/sustainable-product-leadership/ [accessed
2014, July 25].
86 The North Face. (n.d.). Product Leadership: Fleece Innovations. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/sustainable-product-leadership/fleece-
innovations/ [accessed 2014, July 25].

36
voluntary program for their suppliers, Bluesign approved products decreased from 36%
in 2012 to 27% in 2013.87 The company uses certain chemicals to aid in water, stain
and oil repellency in outerwear. As pointed out by Greenpeace, the most common
chemical is PFCs (perfluorinated chemicals). The North Face’s Restricted Substance
List (RSL) does not cover this in order to remain competitive.88 They are searching for
an alternative which will maintain the same product integrity as set by current industry
standards. However, as North Face is focused on product leadership, they should look
to go above and beyond what is required by law and do what is necessary to be socially
and environmentally responsible.
In this respect, The North Face has taken other steps in product development.
Apart from fleece, they have developed innovate methods for polyester products. With
the oil based textile, polyester makes up approximately 80% of their fabric volume which
in 2013, 7% was made from recycled plastic.89 The company’s goal is to use 100%
recycled plastic in their polyester products by 2016. Increasing consumer awareness to
recycling products keeps valuable materials out of the landfill and turns them back into
something of worth. The North Face’s clothes the loop initiative allows customers to
recycle apparel and footwear in bins at participating retail stores which are then sorted
into 400 different categories to be reused as raw materials in new products.90 Before a
product reaches this stage of its life, ensuring long-lasting durable products post-pones
this process and the need for customers to purchase new ones. With a lifetime
warranty, the company invests in repairing products (see Table 6-1) to extend their life
and maintain a commitment to high-quality products.
87 The North Face. (n.d.). Product Leadership: Responsible Production. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/sustainable-product-leadership/responsible-
production/ [accessed 2014, July 25].
88 VF Corporation. (2013). Restricted Substance List: Supplier Policy[Technical Report]. Retrieved from
http://www.vfc.com/VF/corporation/resources/images/Content-Pages/Global-
Compliance/VF%202013%20RSL.pdf [accessed 2014, July 28].
89 The North Face. (n.d.). Product Leadership: Product Design. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/sustainable-product-leadership/product-
design/ [accessed 2014, July 28].
90 The North Face. (n.d.). Clothes the Loop. Retrieved from http://www.thenorthface.com/en_US/clothes-
the-loop/ [accessed 2014, July 30].

37
The North Face’s most recent commitment to Product Leadership is their
sourcing of goose “down” feathers for insulated outdoor jackets. The ‘Responsible
Down Standard’ was developed in partnership with Control Union, a respected global
certification body, and Textile Exchange, ensuring the material comes from ethically
treated geese (not force-fed or live-plucked).91 The standard is applied to “down”
sourced from Hungary, Poland, Romania, China, and Ukraine. The outdoor industry’s
“down” is mainly sourced from the slaughterhouses in these regions. It is, however a
byproduct of waterfowl grown for meat, which are subject to the controversial practices
listed above.92 The North Face shares the standard with the Textile Exchange. This
collaboration increases awareness for all stakeholders. As Adam Mott, Director of
Sustainability explains: “Our hope is that the collective use of the RDS will effectively
promote positive animal welfare conditions and traceability in the “down” supply chain at
a much larger scale than we could accomplish alone. We firmly believe that by driving
91 Textile Exchange. (n.d.). Responsible Down Standard. Retrieved from http://textileexchange.org/RDS
[accessed 2014, August 10].
92 Marc Gunther. (2014, August 27). Down Smackdown: The North Face v Patagonia on Ethical Feather
Standards. Retrieved from http://www.theguardian.com/sustainable-business/2014/aug/27/goose-feather-
down-live-pluck-outerwear-clothing-north-face-patagonia [accessed 2014, September 1].
Table 6-1: TNF Warranty Repair Volume

38
positive change across the global supply chain, the RDS will benefit the industry at
large.”93
6.1.2.2 Operational Efficiency
With numerous suppliers, The North Face has only so much influence over the efficient
use of resources during product development. However, they do have an ability to
change the facilities they own. In 2012 and 2013, they opened new headquarter offices
in both the United States and Europe, each with renewable energy and green building
solutions. In their Almeda, California HQ’s, the use of a 953KW solar power system
produces over 100% of electrical needs, including five backup vertical wind turbines.94
The HQ in Stabio, Switzerland implements rain capture, certified and recovered timber,
and is supplied by 100% renewable energy. They have similar systems in their
93 The North Face. (n.d.). Product Leadership: Down Standard. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/sustainable-product-leadership/down-
standard/ [accessed 2014, September 1].
94 The North Face. (n.d.). Operational Efficiency: Facilities. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/operational-efficiency/facilities/ [accessed
2014, September 3].
Figure 6-1: TNF Solar Data

39
distribution centers in both North America and Europe, benefiting from decreased
overhead costs. In attempt to make their California HQ energy systems more intelligible,
they use a Solar Monitor (see Figure 6-1) on their website showing real-time data. In the
United States, The North Face retail stores accounted for 67% of total greenhouse gas
(GHG) emissions in 2013. Combined with Distribution Centers and Headquarters, they
reduced Green House Gas (GHG) Emissions by 21% indexed against total sales from
2008 (see Figure 6-2).95
95 The North Face. (n.d.). Operational Efficiency: GHG Emissions. Retrieved from
www.thenorthface.com/en_US/innovation/sustainability/operational-efficiency/chg-emissions/ [accessed
2014, September 3].
Figure 6-2: TNF U.S. Facility Emissions

40
Their retail stores have a real growth of GHG Emissions up nearly 1000 metric
tons in five years. The Distribution Centers and Headquarters are adapted more rapidly
and easily. However, as they cannot eliminate all carbon emissions, The North Face
invests in GreenShipping offsets for their online store and in Green-E Climate Certified
carbon offsets and Renewable Energy Certificates (RECs). This is done through the
non-profit Bonneville Environmental Foundation for their owned and operated facilities.96
They continue to push for innovative initiatives as industry leaders and experts, with the
EPA acknowledging them in both 2012 and 2013 for excellence in Green Power
Purchasing.97
6.1.2.3 Community Engagement
The North Face is on a mission to help others explore the world. In order to
achieve this, they invest in non-profit organizations, establish programs to build a
deeper connection between participants and the environment, and help others find
close-to-home outdoor recreation. Initiatives created by The North Face include:
 Donations: Donates both funds and products to organizations with the same
values towards conservation, outdoor exploration and community engagement.
Since 2004, they have donated over $10 million dollars through a corporate
giving platform. The Conservation Alliance being an example of cooperation
between outdoor companies.98
 Planet Explore: An online community designed to help individuals and families
learn about and participate in outdoor activities and events in their area. It
features over 120,000 events in 12, 000 places with Urban Nature Guides across
the U.S.99
96 The North Face. (n.d.). Operational Efficiency: GHG Emissions. [accessed 2014, September 3].
97 EPA. (2013). Green Power Leadership Awards. Retrieved from
http://www.epa.gov/greenpower/awards/winners2013.htm [accessed 2014, September 8].
98 The North Face. (n.d.). Community Engagement: Employees. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/community-engagement/employees/
[accessed 2014, September 20].
99 Planet Explore. (n.d.). Home. Retrieved from http://www.planetexplore.com/ [accessed 2014,
September 8].

41
 Explore Fund: This inspires and enables the next generation of explorers by
funding non-profit organizations working to re-connect children with nature. From
2010 – 2013, the fund has invested $1,405,700 to grants in the U.S.A., Canada,
and eight countries within Europe (see Table 6-2). 100
 Outdoor Nation: A millennial led movement re-connecting youth with the
outdoors with a vision towards a systematic social change. Recently, they have
awarded $50,000 to ten schools with the best idea to engage more people in
outdoor recreation.101
100 Explore Fund. (n.d.). About. Retrieved from http://www.explorefund.org/ [accessed 2014, September
10].
101 Outdoor Nation. (n.d.). About The Outdoor Nation. Retrieved from http://outdoornation.org/page/about-
2 [accessed 2014, September 20].
Table 6-2: Explore Fund Metrics

42
 Explore Your Parks: The goal is to encourage people to get outdoors, whether it
is your first or hundredth time. Beginning with just 350 participants in 2010, today
they have over 3,250 and are present in 16 markets making up 45% of the U.S.
population (see Figure 6-3). 102
 Employees: TNF nurtures employees with more than just good business habits.
They offer opportunities to volunteer their time and events which connect them
102 Explore Your Parks. (n.d.). About. Retrieved from http://www.exploreyourparks.com/about/ [accessed
2014, September 8].
Figure 6-3: Explore Your Parks

43
closer to the brand mission, enabling exploration. Since 20ll, they have nearly
doubled their U.S. employee volunteering participation rates to 44% (see Figure
6-4).103
 Social Compliance: Through the parent company VF, they established a set of
social, environmental and ethical standards throughout the entire supply chain
supported and enforced by a team of IRCA Certified Compliance Specialists.
From Health & Safety to No Forced Labor in more than 1,400 facilities around the
globe, VF is committed to creating long-lasting relationships, bringing 29% of
factory partners up to standard over the past seven years.104
103 The North Face. (n.d.). Community Engagement: Employees. [accessed 2014, September 20].
104 The North Face. (n.d.). Community Engagement: Social Compliance. Retrieved from
http://www.thenorthface.com/en_US/innovation/sustainability/community-engagement/social-compliance/
[accessed 2014, September 20].
Figure 6-4: TNF Employee Volunteer Rates

44
The North Face shows a clear commitment to reaching external and internal
stakeholders. Aligning customer values and beliefs with the outdoors creates a deep
connection to a brand with unique capabilities to do so. The North Face continues to
enable people to explore the outdoors, furthering their ability to achieve the company
mission.
6.2 Colombia Sportswear Company
6.2.1 Overview
Colombia Sportswear Company (CSC) was born from a hat company back in the
1930’s by a German immigrant. Half a century later they are a national leader in the
high-performance outdoor apparel market.105 The transformation took many years, while
the family had many hardships. Failing miserably for the first few years under the
mother-son management team, Gertrude and Tim Boyle invested heavily in building a
brand label presence in the outdoor market, eventually leading to $1 million in sales by
1978.106 With a solid brand to build off of, the company began shipping overseas. By the
late 80’s, Colombia disrupted the market with new technological advances, mainly in the
skiwear market. The development of a parka jacket named ‘Bugaboo’ increased sales
from $18 million to $80 million just two years later and eclipsed the $100 million mark by
the beginning of the 90’s.107
Columbia went on to diversify their product portfolio with footwear. This took off
with the construction of a flagship retail store in Portland, Oregon and one in Seoul,
South Korea, where they first began offshore manufacturing. In 1998, the owners took
the company public on the NASDAQ, with investors paying over $100 million at $18 per
105 Funding Universe. (n.d.). Columbia Sportswear Company History. Retrieved from
http://www.fundinguniverse.com/company-histories/columbia-sportswear-company-history/ [accessed
2014, September 25].
106 Funding Universe. (n.d.). Columbia Sportswear Company History. [accessed 2014, September 25].
107 Funding Universe. (n.d.). Columbia Sportswear Company History. [accessed 2014, September 25].

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