Patagonia: Blueprint for Green Business

The story of how Patagonia founder Yvon Chouinard took his passion for the outdoors and turned it into an amazing business.

By Susan Casey

April 26, 2007

"We didn't have any of the answers," Chouinard recalls. "There was no book you could pick up and say, Here's what we need to do. We didn't know that making clothes out of a synthetic was better than making them out of a natural material. And so what about rayon? It's made out of cellulose, which is made out of trees—that seems like a good product. But then you find out they use really toxic chemicals to convert it." It turned out that hemp was the most responsible fiber but only if grown in cold, wet climates. Wool, too, could be good or bad: "If you get it from sheep grazing in alpine meadows," Chouinard says, "that's damaging as hell."

Conventionally grown cotton was especially heinous. Heavily dependent on noxious pesticides, insecticides and defoliants, it's an environmentalist's nightmare crop. "To know this and not switch to organic cotton would be unconscionable," Chouinard says. In 1994 he gave his managers 18 months to make the change. Given that organic cotton, rare at the time, cost between 50 percent to 100 percent more, and that a fifth of Patagonia's business came from cotton products, this was no small risk. There was pushback from the ranks; suppliers defected. Chouinard delivered his ultimatum: Do it, or we never use cotton again.

The gamble paid off. Patagonia's cotton sales rose 25 percent and, more important, established an organic-cotton industry so that other companies could cross over. Demand grew and prices decreased, leading to even more demand. In 2006, Wal-Mart became the world's largest purchaser of organic cotton.

You'd think this would make Chouinard happy. And it does, to a point. He's ecstatic over Wal-Mart's green initiatives. But when executives from Sam's Club came to Ventura last month to meet him, he told them they needed to go further. "Even organic cotton is bad," he says. "It's better to make clothes out of polyester if you can recycle them into more clothes, and keep doing it—like we do with aluminum cans—instead of growing more organic cotton and selling cheap clothes that people just throw away."

In the early 2000's, the Japanese fabric company Teijin, a partner of Patagonia's, invented a process by which used polyester can be almost endlessly recycled. Patagonia, which makes a line of polyester base layers known as Capilene, encouraged customers to send back their worn-out underwear. (It now also accepts products made from fleece, nylon and organic cotton.) Recycling polyester, Chouinard says, is a home run: "We use 76 percent less energy than if we'd made it out of virgin petroleum."

The questioning continued. Chlorine disappeared from Patagonia's wool products, replaced by a patented slow-wash technique. Instead of adding antimicrobial silver, a groundwater pollutant, to its underwear lines, it used a product made of crushed crab shells for odor control. It became the first California company to use renewable sources like wind and solar to power all its buildings, and one of the first to print catalogs on recycled paper.

After discovering that airfreight requires more energy than shipping by ground or sea—at least eight times more, according to Luke Tonachel at the Natural Resources Defense Council—the company advised customers to "ask yourself if you really need that pair of pants sent overnight."

But Patagonia does offer that option, which brings up an inconvenient truth: No matter how careful the choice of materials or methods, all companies leave a footprint. This is Chouinard's conundrum, and you get the sense it keeps him up at night. "Patagonia will never be completely socially responsible," he writes gloomily at the end of his book. "It will never make a totally sustainable, nondamaging product. But it is committed to trying."

"This is our sweatshop," Chouinard says, and the roomful of workers sitting behind sewing machines bursts out laughing. The place is idyllic. Rolls of fabric are stacked like a psychedelic patch of giant flowers; sunlight and bird song stream through open windows that look onto a playground of the company's day-care facility. Walking around headquarters with Chouinard is like going on a sprawling house tour: Here is the Infant Room, the day-care annex for newborns; here, in a onetime slaughterhouse, is the first Patagonia store; here is the original blacksmith shop where Chouinard Equipment was born. "I still come out here and make fireplace tools," Chouinard says.

He greets employees by name, and they light up when they see him. But the laidback ambience is misleading. Competition to be here is stiff; Patagonia receives more than 900 applications for every job opening. The people who get hired are anything but slackers, and Chouinard is an unrepentant perfectionist. "He has an easygoing persona, and he's a California guy," says Casey Sheahan, Patagonia's 51-year-old CEO. (He got the job in March 2006.) "But he does demand excellence. People in this company would run through walls for him."

That would be a shame. The walls are gorgeous, filled with nature photographs and paintings, including many of Mount Fitzroy, the South American peak that inspired Patagonia's logo. The images evoke the solidity and timelessness that Chouinard has tried to instill in his brand, which makes it startling to hear what he has to say next: "We're in the middle of a revolution. Every ten years we have to blow this place up."

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