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How Patagonia Uses Sustainability to Create Business Value

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Sustainability efforts can be a challenge to implement, even for brands steeped in doing better by the environment.

Financial cost comes to the forefront of business decisions more often that not, and at Patagonia—which says its reason for being is to build the best product and cause no unnecessary harm—sustainability still can’t come at the cost of cost without other considerations.

“We have a mission that drives us to work in this way, but we still have to influence our CEO, we still have line management to convince,” Patagonia VP of global supply chain Rachel Cantu said at a talk about creating better business value at the Textile Exchange Sustainability Conference Wednesday. “And this is in a company where our core mission is around sustainability, we still have these challenges.”

Patagonia has made even more moves toward more sustainable products in the last few years, most recently introducing the world’s first wetsuit made with natural rubber from Forest Stewardship Council (FSC) certified sources instead of neoprene.

Most of these changes have been brought about because of changes in consumer behavior. As much as 50 percent of global consumers have said in studies that they are willing to pay more for a brand they know is contributing to social or environmental change in a positive way. And what’s more, 2015 was the single largest growth year organics ever had. Americans are spending $43 billion a year on organic, Cantu said, because many are aware the planet is in crisis and, for some, organic goods are more aligned with their personal values.

The problem for many brands, however, is telling the sustainability story.

Consumers may claim to care about sustainability, although there’s no hard evidence that care will translate into spending at stores, but they need to truly understand the value of the sustainable product they may be spending more for.

“If you can help to tell the story in a really clear way to the consumer,” Cantu said, “in a really clear and simple way that what they’re purchasing is making a difference, then you can tap into that.”

Patagonia has been working on how to make this message clearer to consumers and to drive consumer demand through that awareness.

“At Patagonia, if you look at our company inside, we operate like any other company,” Cantu said, adding that material costs still have to be scrutinized, what fair trade costs has to be considered because the company still has to succeed and sustain itself.

But what all of those considerations come down to, according to Cantu, is one thing: is the company willing to pay for what we are doing?

If there’s a possibility the answer to that question is “no,” Patagonia has to go back and think about whether what the company feels is important doesn’t resonate with the consumer.

“If there’s a low-impact dye process and we want to put it into T-shirts and we realize our consumers doesn’t know what we mean by low impact dyes,” Cantu said, “Do we invest in how we can raise that awareness? How do we message that so that it does bring value to our consumers?”

That consideration process means sometimes Patagonia says no to producing products that seemed like a good idea.

“We don’t adopt every sustainable solution that comes across our table. We do have to make decisions,” Cantu said, and “In the end, what is our consumer willing to pay for?”

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