Climate Change and the Fashion Industry – How Patagonia is is Fighting Back

The fashion industry is a major contributor to climate change. Patagonia is slowly but surely taking steps to mitigate the issues and create a more sustainable fashion company.

 

CLIMATE CHANGE AND THE FASHION INDUSTRY

It is nearly impossible these days to avoid hearing the dangers of climate change and how it is affecting our food sources, our weather patterns, and many other issues in our lives. However, the less common news is the way climate change is both affecting and being affected by the fashion industry. According to the “Pulse of the Fashion Industry 2017” report published by BCG, the fashion industry will come under pressure by 2030, with the risk of losing at least 3 percentage points in profitability due to climate change.[1] With the strong reliance on natural resources – the fashion industry uses 79 billion cubic meters of water – enough to fill 32 million Olympic size swimming pools, the fashion industry will be in a tough spot as climate change continues to wreak havoc. Both the decreased availability and the pollution of water, lead to supply chain issues involving cotton, energy, labor, and more.[2] Thus, as water scarcity becomes more extreme, cotton-growing nations and the fashion industry may face the dilemma of choosing between cotton production and securing clean drinking water.[3]

The fashion industry also contributes to climate change. In total, the entire world produces 2.1 billion tons of waste a year, almost 2x more than the Earth can absorb. Within the fashion industry, 80% of the waste ends up in landfills instead of being recycled or reused.[4]

Patagonia, in particular is a company at risk due to climate change. It utilizes many resources affected by climate change, especially since some of their factories are located in regions at the highest risk for climate change threats (Sri Lanka, Bangladesh).[5],[6] Climate change will result in issues with Patagonia’s supply chain materials, as well as the logistics. The climate change threats in these countries will affect the physical buildings and their workforce, through increased risks for heat stress, flooding, landslides and water scarcity, among other things.[7]

 

PATAGONIA SOLUTIONS

Fortunately, Patagonia acknowledges its role in climate change and the associated risks. As stated on the company website, “Our work has always begun first by acknowledging that Patagonia is part of the problem. We make products using fossil fuels, built in factories that use water and other resources, create waste and emit carbon into the air…”[8] Patagonia is one of the most forward-thinking companies when it comes to combating the effects of climate change – already instituting a number of initiatives including reimbursing employees for taking public transportation to work, building new stores in already existing buildings, purchasing green power, product recycling and using natural and recycled fibers in their clothing.[9]

Patagonia has also taken steps to reduce their footprint, and climate change as a whole, in the long term. For example, Patagonia started an internal investment firm, Tin Shed Ventures, in 2013 to fund start-ups that aim to solve environmental issues.

Patagonia is so invested in reducing climate change and lessening our waste, they placed an ad in the New York Times during Black Friday of 2011 encouraging consumers not to buy their products. The ad urged consumers to think before they buy, to avoid contributing to the extreme consumer waste so pervasive in the country.[10] Through extreme measures, the company has brought environmental issues to the forefront of society and increased awareness and the necessity for change.

 

IS IT ENOUGH?

            Patagonia is an extremely forward-looking company; however, one company alone cannot solve the problem. Patagonia needs to start better influencing other companies to follow their lead.

The factory locations will be, if not already, under severe pressure to ration their water. Patagonia should be finding ways to help the location populations where their goods are made – they need improved living conditions, disaster relief promises, and education of ways they personally can help combat climate change.

Furthermore, Patagonia needs to improve its waste efforts. Among clothing waste, the company offers free recycling of products … However, there is also paper waste. Patagonia uses a significant amount of paper printing catalogs. While it is recycled, I would argue that a company focused on climate change should vow to go digital, solely distributing catalogs via email instead of mailing them all over the world.

 

FINAL QUESTIONS

Climate change is an on-going issue facing every facet of life today. It is imperative that more companies in the fashion industry start taking a stand and following Patagonia’s strong example. Without serious action, climate change and its environmental impact will continue to affect our lives and the way the world operates. This is a world-wide issue, not tied to the most prevalent industries. Thus:

 

How can we encourage more awareness of waste and environmental issues in the fashion industry?

What is the most effective way for society to encourage fashion companies to follow in Patagonia’s footsteps?

 

(791 Words)

 

 

[1] Global Fashion Agenda and the Boston Consulting Group, “Pulse of the Fashion Industry 2017,” Mary 2017, accessed November 2017.

[2] IPCC, 2014: Summary for policymakers. In: Climate Change 2014: Impacts, Adaptation, and Vulnerability.Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of theIntergovernmental Panel on Climate Change[Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea,T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S. MacCracken,P.R. Mastrandrea, and L.L. White (eds.)]. Cambridge University Press, Cambridge, United Kingdom and NewYork, NY, USA, pp. 1-32.

[3] United Nations Environmental Programme, GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector (2013)

[4] Global Fashion Agenda and the Boston Consulting Group, “Pulse of the Fashion Industry 2017,” Mary 2017, accessed November 2017.

[5] Huffington Post, “These Countries Face the Biggest Threats from Climate Change,” https://www.huffingtonpost.com/2013/10/30/climate-change-vulnerability-index-countries-impacts-costs_n_4174938.html, accessed November 2017

[6] Patagonia Company, “Footprint,” http://www.patagonia.com/footprint.html, accessed November 2017

[7] IPCC, 2014: Summary for policy makers.

[8] Patagonia Company, “Climate Change,” http://www.patagonia.com/climate-change.html, accessed November 2017

[9] Ibid.

[10] Patagonia Company, “Don’t Buy This Jacket Black Friday and the New York Times,” https://www.patagonia.com/blog/2011/11/dont-buy-this-jacket-black-friday-and-the-new-york-times/, accessed November 2017

 

 

 

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Student comments on Climate Change and the Fashion Industry – How Patagonia is is Fighting Back

  1. A lot can and has been done to encourage retailers to make sustainable choices around their internal operations and across their supply chain. Large retailers like Walmart and Target have leveraged their market share and the sheer volume they command from their supplier networks to incentivize them to deliver sustainable products. Walmart does this through their Scorecard program which encourages suppliers to track and report their greenhouse gas (GHG) emissions. The retail giant then ranks suppliers based on the sustainability data they provide which then factors into whether or not Walmart chooses to contract with them and to what extent. Walmart also partners with NGOs like the Environmental Defense Agency (EDA) to produce research and actionable findings on supply chain management from a climate change perspective.

    Patagonia has also taken steps to make sustainable choices around its operating model and further downstream in its supply chain by working with third party auditors rather than performing this function in-house. Bluesign Technologies, an independent verification firm, audits the management systems of a several Patagonia suppliers to evaluate their production process and then assigns a color– blue, clean product and grey, toxic chemicals used– to each supplier to denote the “cleanliness” of their products.” [1]. For small and mid-sized retailers like Patagonia perhaps it is more economical and potentially more effective to outsource the verification process to a third party rather than auditing suppliers themselves. This model offers a scalable solution for other retailers seeking greater visibility into the sustainability practices of their suppliers.

    [1] https://www.patagonia.com/blog/2012/04/patagonia-clothing-made-where-how-why/

  2. Patagonia’s commitment to fighting climate change is underscored in their mission statement to “build the best product, cause no unnecessary harm, [and] use business to inspire and implement solutions to the environmental crisis.” I agree with TS that the most impactful way that Patagonia can encourage more awareness of waste and environmental issues in the fashion industry is to lead by example and look at their own supply chain. Patagonia has a lot of influence over their suppliers and should use this influence to encourage (or force) them to adopt sustainable practices. If Patagonia leads by example, they have more of a leg to stand on and are less vulnerable to accusations of hypocrisy.

    For change to happen outside of Patagonia, Patagonia needs to continue to be incredibly vocal about the role companies play in combating climate change and band together with like-minded companies, just as they did when the US pulled out of the Paris Climate agreement (https://www.gq.com/story/if-trump-wont-fight-climate-change-clothing-brands-will). Whenever they adopt a sustainable practice (e.g. if they move to solely distributing catalogues via email), they need to make sure that the world knows. Doing so creates goodwill in the eyes of their customers, and in the process, demonstrates to other businesses that being sustainable can be good for both the bottom line and the environment.

  3. Very interesting article! I agree that this is a very pressing issue in the fashion industry. There are several ways that the industry can encourage more awareness of environmental issues. For example, companies can partner with fashion-forward celebrities who have significant followings on social media (e.g. Gigi Hadid on Instagram) to promote climate change awareness campaigns. Prominent celebrities are often paid to place ads on their social media accounts because they have millions of followers. Ads can also be placed in prominent fashion magazines such as Vogue. Efforts such as these aimed at making climate change awareness in the fashion industry more fashionable could garner significant support.

  4. A well written and interesting article that for me raises the question – how can Patagonia turn the threat of climate change to a competitive advantage? I take an alternative view that their top priority needs to be to create shareholder value by maximising profits. With this in mind, I agree with EN in that the key focus needs to be generating goodwill in the eyes of their customers for any climate change initiative they do. As Patagonia is a for profit business any costs they incur to help the environment should have benefits on their bottom line (either in the short or long term).

    I don’t think that it is their role to try change the fashion industry but rather only do this if they think this will help them be viewed more positively by their customers. Finally, I do agree with their strategy of being forward-looking and taking a proactive role on climate change as I think this generates a lot empathy from the environmentally conscious customer. Going green will likely strengthen their brand and make it stand for a company that cares for the long-term sustainability of our environment which will ultimately benefit their bottom line.

  5. Interesting article! I think a company like Patagonia has an opportunity to be an industry leader and key influencer in this area. Their target customer (i.e. affluent, outdoors-focused) is a group which traditionally cares a lot about climate change, putting Patagonia in a strong position to put emphasis on this issue. By aligning their climate change efforts closely with their brand, they can help to put pressure on competitors that don’t follow suit.

    Climate change is an issue that could hit especially close to home for a company like Patagonia – as winters get increasingly warmer, the demand for outdoor clothing should decrease, posing a long-term risk to the business. While they won’t be able to solve this issue by themselves, they can certainly do their best to help contribute to the solution!

  6. Great article on Patagonia’s response to environmental degradation and climate change. I think that Patagonia is a fairly visible company in the fashion industry and is certainly in a leading position to enact change. The ability to pursue this change and to adapt the supply chain in manner that both minimizes waste produced and maximizes utilization of recycled materials and inputs is wholly determined by Patagonia’s resolve to innovate here. I would imagine that by establishing itself as a leader in environmental efficiency, Patagonia would be able to reap value as a brand and build loyalty within existing and new customer bases (particularly as millenials begin to look at the “ethos” of brands). I think that Patagonia would achieve much by publishing aspirational targets (to customers, shareholders, and company employees) of how it wants to achieve environmental efficiencies over a specified time horizon. Aligning the entire organization and its customers to the shared vision of combating climate change would serve to expedite any efforts undertaken – in this way, Patagonia builds accountability around this vision.

  7. Compelling perspective. I agree that Patagonia is extremely unique within the fashion industry for it’s perspective on the environment and actions it is taking as a result. Yvon Chouinard is impressive for his iconoclastic stance and attitude towards the environment compared to almost every other company. Still, I feel his position is unlikely to be adopted by nearly any other company, especially public companies. Chouinard made a values-based decision as a leader to keep Patagonia private and focus on efforts like the environment, which has been enabled by Patagonia’s success. Still, this decision will keep Patagonia necessarily smaller than it could be (which he accepts), and I don’t think Patagonia will achieve it’s goal as many other fashion and outdoor companies close the gap with Patagonia in terms of quality and performance. The biggest question for me is how Patagonia survives into the future once Chouinard is no longer in charge, and how the company balances it’s profit incentive with non-profitable goals like environmental efforts. On a long-enough time horizon, I expect Patagonia to fade into obscurity and it’s legacy will depend on the amount of “good” it achieved while a viable company.

  8. Whitney, thank you for the fascinating article. I am also a big fan of Patagonia and their mission, and seeing it quantified in your analysis was eye opening. All apparel and fashion companies face the same conundrum; their product is wasteful to be created, yet the company’s purpose is to sell, therefore produce, as much as possible. Should every company who claims to be environmentally focused shut down operations? It’s unrealistic to think that would happen, but there are multiple things companies can do that help offset their business operations.

    One program you didn’t mention that that I greatly admire is Patagonia’s “Worn Wear” initiative. Through Worn Wear, Patagonia allows you to trade-in used items of clothing (that it will revamp and resell) for new ones, and get your items repaired by Patagonia’s experts. This program is fantastic, as it reduces our society’s obsession with overconsumption and the adage that new is always better.

  9. Patagonia and the business of fashion have many overlaps and many differences. Yvon Chouinard, the founder, has built his brand on being environmentally conscience, the quality of his goods, and the ability for those products to last generations. These ideas contrast many forces in the ever changing, “what is in this season”, fashion sector. In many examples, Patagonia has put ideals above profits. Given that most fashion companies, like most capitalist businesses, are charged with comp-ing YOY growth, incentives are required for these companies to follow Patagonia’s footsteps. Privately-held Patagonia has never been directly tied to these market pressures, which regularly at odds with our environment. Several pillars would be required to be in place for fashion companies to follow in Patagonia’s footsteps. Change happens when all parties’ incentives are aligned. An educated public who is willing to penalize eco-foes and reward eco-friendly fashion companies via sales is key to making this a bottom line impact. Governments will also have to put new regulations in place to create financial incentives (both carrots and sticks) for the fashion industry to make investments that will yield environmental results over the course of generations and not fiscal quarters. Without aligning consumers, governments, and the fashion industries incentives, can there be more room for companies like Patagonia?

  10. Patagonia’s mission statement is to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” I think because Patagonia is private, and because Founder Yvon Chouinard included addressing the environmental crisis as part of his company’s overall mission, Patagonia is a widely recognized corporate leader in exposing and driving solutions around climate change.

    Chouinard is in a surprising field given his caution to others against consumerism. “If I was to give anybody advice, I always say simplify your life,” he said. “It’s a lot more satisfying.” Under Chouinard, Patagonia once took out a full-page ad in the New York Times that said “Don’t Buy This Jacket.” For all of these reasons, Patagonia’s focus on the environment is difficult for fashion companies to emulate because they have not incorporated sustainability into their DNA and rely on the very consumerism that Chouinard cautions against.

    To respond to your first question, I think Patagonia is well positioned to serve as a megaphone to the fashion industry to build more awareness about environmental issues and walk the walk. Patagonia repairs customers’ used products and sells used products in its stores, relying on its high quality products’ durability to stand the test of time. Most of the fashion industry relies on making last year’s fashion obsolete to encourage people to buy the latest trends. This leads to the provocative question as to whether the fashion industry will ever be willing to preach moderation and attack consumerism, the very disease that props up the industry. I do not think this is likely so, rather than wait around for others to follow Patagonia’s venerable model, I hope Chouinard has more opportunities to make consumers feel ridiculous for our wasteful (and costly) fashion choices. The fashion industry may hasten evolving its practices only once consumers are convinced that sustainability is fashionable.

    Source: https://www.today.com/news/patagonia-founder-refuse-buy-his-products-if-you-dont-need-t16491

  11. WS, interesting article outlining the commercial impacts of climate change on a very profit-focused industry that usually tends to be low margin.

    In terms of encouraging more awareness of environmental issues, the core starts with activism. If consumers form activist groups and promote not buying brands that adversely impact the climate (directly or indirectly), others will take notice. Furthermore, voters can also independently ask their state or nationally-elected representatives to create legislation asking for the creation of a “climate report card”, allowing consumers to see how truly sustainable a brand is. Another solution might be getting celebrities involved and making not buying sustainable clothing unpopular.

    The most effective way of encouraging brands to follow Patagonia’s example would be a decline in sales. If brands feel that they are going to lose out on consumer preferences i.e. at the checkout counter, they will start changing their practices. Consumers need to vote with their wallet. Furthermore, if consumers demand more transparency, brands will be forced to expose practices and then change behavior.

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