How Patagonia’s Redesign Challenges Marketers to Take Action on Sustainability

No advertising, no billboards, no campaigning – when Patagonia founder Yvon Chouinard announced this week that he would donate all stock in the company to charitable causes, he wrote a letter. The humble display follows the founder’s anti-consumerism mindset, but additionally, it reminds marketers that values ​​shouldn’t sit on the surface.

“Once again, Patagonia and the family that owns it have demonstrated their selflessness and commitment to the fight against climate change,” Jack Bedwani, founder and CEO of the New Moon agency, said in an email. “This time in the most powerful and irrevocable way.”

On September 14, Patagonia announced the restructuring of the company, allowing Chouinard to redistribute the shares of the company. Ninety-eight percent of the company’s non-voting shares will be transferred to Holdfast Collective, an environmental nonprofit. The remaining 2% are voting shares and will be used to fund the Patagonia Purpose Trust which will work to develop a legal structure that helps encapsulate the brand values. Every dollar not reinvested in Patagonia will be used to protect the planet.

This structure also allows Patagonia to avoid a $700 million tax bill, reports Bloomberg.

Patagonia’s moves in recent years around sustainability have been significant, and its latest push is no different. The company expects to pay an annual dividend of about $100 million per year, according to the statement. Although Chouinard portrays himself as the business leader he never wanted to be, his announcement stands a strong chance of building brand loyalty among key audiences.

Sustainability has long been a Patagonia priority, one increasingly shared with consumers. This year, 94% of consumers say they want to live a sustainable lifestyle, according to Kantar’s 2022 Sustainability Sector Index. Additionally, 49% say they think buying sustainable products is a demonstration of who they are and 57% say a clear explanation of how a brand improves the environment would entice them to buy.

“American consumers [want] companies to prioritize tackling socially charged sustainability issues, there are pockets of consumer groups that show a greater interest in environmental issues – namely Xers, primary and higher level consumers (level college and university), city dwellers, and the financially affluent — all of whom fit well with Patagonia’s primary target audience,” wrote Carlyn Kelly, senior director, Futures Practice at Kantar via email.

Patagonia’s efforts could also shed light on what the future of sustainable enterprise might look like, though it’s likely unrealistic for consumers to expect to see other brands follow suit on the latest initiative. of the brand. Even two to three decades from now, the decision will likely be seen as the exception, not the rule, New Moon’s Bedwani said.

“The thing is, Patagonia has raised the bar so incredibly high that it’s going to be hard for other brands to come close,” he said. “At this point, all efforts to promote sustainability and advance progress on the climate change agenda are good.”

For years, Patagonia has made its intentions on the subject clear. In a 2011 Black Friday edition of The New York Times, the retailer ran a full-page ad that read “Don’t buy this jacket” in an effort to fight consumerism. The ad detailed how, although the jacket is made mostly with sustainable materials. , it would leave behind two-thirds of its weight in waste. In 2015, the brand launched its “Worn Wear Wagon”, a mobile clothing repair shop that encouraged keeping clothes rather than ditching them for something new. In a more direct effort, he sued the Trump administration after it decided to drastically reduce the size of two national monuments in Utah.

Marketers undertaking smaller sustainability efforts than Patagonia couldn’t hurt as they appeal to consumer feelings, though such efforts would be unsuccessful without coming from a place of authenticity, Ken Beaulieu said. , senior vice president of the ANA Center for Brand Purpose in an email. . As sustainability became a priority, many brands used it as a marketing tool, but took no real action, known to critics as “greenwashing”.

“It’s a case of talk and no action, and it’s led to accusations of goal-washing. Brands need to understand this if they want to play in the sustainability space,” Beaulieu said. If they want to have the grip of a Patagonia, they must consistently and authentically demonstrate their purpose beyond profit.

Patagonia’s reshuffle could also put the companies at risk of being held liable for making false promises to buyers as they chase profits, and in many ways the spotlight could also remain on the brand as some are waiting to see if they will use a movement lauded for its modesty in a more profit-oriented way.

“What I will be watching carefully over the next few months is how and if Patagonia chooses to address this decision in its marketing and communications,” Bedwani said. “I see a risk that marketing campaigns related to this decision could become too judgmental or self-congratulatory.”

“To this day, Patagonia wouldn’t brag about the good they’re doing. However, we (the general public) have notoriously short memories,” he added. “I’m curious to see how the brand threads the needle.”