Dec. 17, 2020

The solution to clothing’s sustainability problem with Patagonia’s CEO


Last episode, we got a deeper understanding of fast fashion’s unfathomably negative impacts on the environment and supply chains across the globe. That was step 1—identifying the problem. 

In this episode, we get step 2—understanding what we can do about it. I’m bringing in Patagonia CEO Ryan Gellert to speak about his experience leading a company steadfastly committed to environmental stewardship and worker protections...and still making money.

Because despite what fast fashion empires might suggest, there is a role for business to play in mitigating the negative impacts of consumerism. Don’t miss this one.

Want more Business Casual? Check out my weekly op-ed column. Sign up here and read my thoughts on fast fashion here.

Transcript

Business Casual - Ryan Gellert

 

Kinsey Grant, Morning Brew business editor and podcast host [00:00:08] Hey there, everybody, and welcome to another eye-opener here on Business Casual. I'm your host, Kinsey Grant. And now, let's get into it. [sound of a ding]

 

Kinsey [00:00:18] Last time on the show, you got to hear from Dana Thomas about the incredibly large, at times massively outsized impact the fashion and clothing industries have on the environment and on workers all around the world. It was a little unsettling to recognize that while fashion employs one out of six people around the globe, fewer than 2% of them actually earn a living wage. Also unsettling—knowing that by some estimates, 20% of all industrial pollution comes courtesy of the fashion industry. 

 

Kinsey [00:00:45] But if you've listened to this show before, you know that we are about more than just talking problems. We are about solving problems, or at least beginning to consider those problem solutions, because, yes, we've likely all contributed in some way to the fast fashion industry's rampant rise as a supply chain and environment destroying entity. But, fast fashion isn't the only option. 

 

Kinsey [00:01:06] There are other places to buy clothes, and other fashion companies in which investors can park money, often with the promise of a hearty return. So today, we are going to talk about those companies. The ones with sustainability pledges and wage disclosures. The ones attempting to right the wrongs of a broken fast fashion industry. Are they for real? Is it all just greenwashing? Can they actually make money? 

 

Kinsey [00:01:28] Today, I am asking all those questions and probably a whole lot more to Ryan Gellert, to the chief executive officer of Patagonia. Ryan, welcome to the show. 

 

Ryan Gellert, CEO of Patagonia [00:01:37] Thanks so much for having me. Great to be here. 

 

Kinsey [00:01:39] We are excited to have you, yeah. Patagonia has certainly become something of, I would say, a bit of a symbol for corporate responsibility in this age. So we have a lot to talk about today. I think we should probably just jump right in. You ready? 

 

Ryan [00:01:50] Let's do it. 

 

Kinsey [00:01:51] All right. Let's do it. So I want to start by talking about Patagonia's strategy and how that strategy is vastly different from some of the fast fashion empires we've been looking at recently on the show. But, before we do that, I want to get this out and on the kind of metaphorical table here. So for a second, if you don't mind, take off your CEO hat, put on your apparel clothing industry analyst hat. What should the role of the corporation be in limiting this fall out of fast fashion? What can a singular company do? 

 

Ryan [00:02:22] Well, I think that you set up the impact that fast fashion, or the apparel sector, has I think really well in your introduction. I would equate it to something like agriculture. It's a big footprint industry. It's got a lot of different players. And I think that there's a diversity of standards and a diversity of ways that companies sort of govern themselves. 

 

Ryan [00:02:45] I think there's also practices that evolve over time. I personally am a product of conventionally grown agriculture. I grew up eating it. I don't think that my family knew better at the time. And I think that a lot of the practices that seemed wise at the time have evolved. And I think that there's a parallel here with apparel. So I think that, you know, the standards that exist at one point, we've got to treat them as anything but a static over time. 

 

Ryan [00:03:11] And I think we've got a responsibility to kind of continue to understand our footprint as an industry, as individual businesses. So, I think your question can be answered really more looking at, you know, kind of in a temporal framework. And for us at Patagonia, the thing that we have always embraced is there's no end point in this movement towards lesser footprint or a more sustainable business. 

 

Ryan [00:03:34] And so I know I've given you kind of a circular and long-winded answer to a simple question there, but I think it's important because I think so many companies throw out the term sustainable, either around the company or around individual initiatives. And I think that's incredibly misleading. I think the reality for us is, after 47 years of doing everything we've known how to do to minimize our footprint, we're still not a sustainable company. If anything, we're responsible one. 

 

Kinsey [00:04:02] Yeah. This is definitely a big theme in this conversation around the fashion industries here—is knowing better and understanding when maybe you didn't know better, how you were going to try to know better in the future. That this is really an evolution in terms of taking responsibility for the impact that a company has on the world around it. 

 

Kinsey [00:04:20] And I think with Patagonia especially, this is a company that's been around for four-plus decades—this company has existed. It has a lot of the benefit of hindsight, certainly, but also the willingness to acknowledge that your responsibility changes as your company evolves, and companies evolve all the time. So that I want people to keep in mind as we're having this conversation, as you're listening to this conversation. 

 

Kinsey [00:04:41] And then the next big point that I think is probably [chuckles] an important question to ask in the beginning here, can fashion ever really be sustainable? We see that word "sustainable" all the time. But to your point, maybe it's impossible for an apparel company to actually be a sustainable company. What are your thoughts here? 

 

Ryan [00:04:59] Well, first of all, I would separate the words fashion and apparel. I think apparel—and this is the parallel I was trying to make before with agriculture—everybody's got to eat and everybody has got to clothe themselves. And so I think the notion that the industries are bad on their face is a little bit of a flawed one. 

 

Ryan [00:05:15] But I think any failure to adopt the most responsible standards possible in either of those places and other industries, I think is where the issues come in. And so your question, can an apparel company become truly sustainable? I think it is possible. I don't think any of us are there yet, but I do think it's possible. 

 

Ryan [00:05:34] I think it's gonna require that we look at the footprint of the businesses we run, the people who are involved in making the product that we make. I think ultimately, really committing to circular business processes, not making product that people don't need, moving away from—and I think this cuts to the heart of fast fashion—trying to trigger people to buy, as entertainment, things that they don't need, which I think is just fundamentally evil, and then making product of low quality and failing to take responsibility for those products. 

 

Ryan [00:06:04] So everything I just described is anything but sustainable. But I think each of those issues—there are better ways today, and I'm convinced that there will be even better ways in the future. 

 

Kinsey [00:06:12] Yeah. So let's get into the specifics of what those ways are. I'm curious to hear what Patagonia's approach to limiting this negative feedback loop that we have within the fast fashion industry. How is Patagonia trying to slow things down, if you will? 

 

Ryan [00:06:26] Well, I think that it's difficult to talk about Patagonia today without taking a quick look, at least, at our history—why we were founded and kind of different chapters in the book, as it were. So, we were founded 47 years ago by a gentleman named Yvon Chouinard. He's the same person who owns the company today. 

 

Ryan [00:06:41] His first foray into business was hand forging climbing equipment. He was a self-taught blacksmith, and he would bang out climbing pitons, often on the beach in Malibu, between session surfing. And then he started importing clothing, actually rugby shirts from the U.K., and that was his step into apparel for climbers. 

 

Ryan [00:06:59] And so you fast forward 47 years, but the origins go back to an outdoor clothing company, and that's still very much what we are today. And as a company that was founded to allow people to explore wild places, we have always had this outsized interest in protecting those wild places. So that kind of goes back to the beginning of Patagonia. 

 

Ryan [00:07:21] I would say, you know, I always think of the company's history as chapters in a book. And early on, it was really about minimizing our footprint. And then we moved into trying to scale solutions to just better ways to make product and seeing other companies in apparel and beyond adopt those practices. 

 

Ryan [00:07:37] Then in the mid-'80s, we committed to what we called taxing ourselves—what we called Earth Tax. At the time, it was 1% of revenue or 10% of profits, which long since just codified it as 1% of revenue, and giving that to small grassroots organizations working on environmental topics. And then in the last handful of years, given the overall degradation of the planet, we've waded more directly into activism ourselves. 

 

Ryan [00:08:01] So I think your question was a lot around our footprint as a business, but we do a lot of work within the footprint of the business and we do a lot of external work. I think within the business, we have a really deep focus on building high-quality, multiuse product, using responsible and recycled materials and fair trade-certified selling. We partner with our customers to help them keep their product in use longer. We have a lifetime guarantee on our product. 

 

Ryan [00:08:24] We run North America's largest apparel repair center. We teach our customers how to do repair [indistinct] vehicles around to events. As I mentioned, we give 1% of our revenue to small grassroots organizations, so we're constantly just trying to figure out how we can use our voice, our people, and all of the other resources we have to live up to our mission statement, which is we're in business to save our home planet. 

 

Kinsey [00:08:46] Yeah, and being in business to save your home planet is certainly the ambitious kind of mission. I know in the press release that announced your promotion to CEO, you said ambitions don't get much bigger than that, which I think is really, really accurate. Does it ever feel like it's too much? That the ambition is too large and almost impossible to actually accomplish? 

 

Ryan [00:09:07] And my answer as an individual is, I don't know if we'll figure this out. I really don't. You look at the overall health of the planet and not only is it moving in the wrong direction, seems to be moving in that direction exponentially faster than scientists and other experts thought possible. So there's a huge part of me that really wonders. And I look at the way that we've managed COVID in the last eight months as a people, and I'm not terribly optimistic, if I'm honest. 

 

Ryan [00:09:33] But I am the CEO of Patagonia, and this is our commitment and our mission statement. And I believe very strongly that we have a responsibility to do everything we can to try to live up to that mission. And that's internally within the four walls of Patagonia. But that's also in all the other ways that I talked about. So we're deeply committed to it. Certainly, I don't think—I know I and I don't believe anybody in Patagonia is paralyzed by the enormity of it, but sobered. 

 

Kinsey [00:10:01] Absolutely. When you think about your core customer for Patagonia, is it the kind of customer who is, you know, super eco conscious, is doing all they can to reduce their waste and reduce their carbon footprint? Or is it just the general populace [laughs] and you hope that in buying something from Patagonia, they maybe are reducing their impact a little bit, but probably not thinking about it every day? 

 

Ryan [00:10:22] Yeah, I know. I mean, there's probably a big difference here between what I hope and what we're focused on in the reality, or at least I accept that there is some difference. But I always think about Patagonia as really simple—who we exist to serve, people that come to the brand through sport and product, people that come to the brand through mission and values. And we are at our absolute best when they're one and the same. 

 

Ryan [00:10:41] And if somebody comes through sport and product and doesn't know what we stand for and how we make product, I would love the opportunity to help them better understand better patterns of purchasing things. And if people come to the brand through our mission and values, I'd love them to understand that we make product that we think is best in class for a variety of outdoor pursuits. 

 

Ryan [00:10:59] But I think that what we are not focused on is trend-driven, fashion-led customers and communities, period. And I don't think that we want to build product and take market share and grow the business just because we believe that we run our business more responsibly than our competitors. I think we really want to ensure that people that interact with Patagonia have a deeper sense of what we exist to do, and that they're seeing themselves in partnership with that. And if that means our business gets smaller, then so be it. But that really is why we exist. 

 

Kinsey [00:11:31] You seem pretty realistic in terms of how you're approaching who the core consumer is for Patagonia. I have to ask—I'm sure you've been asked before—what about this association of Patagonia as like Fratagonia or [Ryan chuckles] like Patagucci? [laughs] Like, how do you reconcile that sort of, I don't know, reputation that maybe is not warranted with your efforts to educate consumers and create this new class of consumers for Patagonia? 

 

Ryan [00:11:56] Yeah, there's a couple of things. I mean, I'm not in—I was going to say in the business, but I didn't want to frame it that way—I don't want to see my role or our role as sort of going around and policing who wears our product. I don't think there's anything positive in that. That said, I really don't want people to wear our product that don't understand what we stand for, because I want what we stand for to be really overt. 

 

Ryan [00:12:18] And that doesn't mean that people come fully formed on the journey of environmentalism and advocacy and activism. But I certainly want to create an environment where if somebody interacts with the brand, we create an interest in knowing more, and we can help participate in putting them on a journey where they start to think a little bit more about the impact of their decisions, and ultimately a variety of ways that they can interact with what we think is the most important obligation that we have, which is this mission to save our home planet. 

 

Kinsey [00:12:49] Right, right. It's interesting to think about the responsibility as existing at this sort of intersection between the corporation—the company that's selling things that people wear—and also the consumer whose responsibility it is to be educated and to try and reduce their own impact on the world around them. Is there a way to kind of pinpoint, like, what comes first, the chicken or the egg? [laughs] What comes first, the eco conscious corporation or the eco conscious consumer? Or does it even matter? 

 

Ryan [00:13:16] Yeah, I don't know that it matters. I mean, it's funny, we've had a lot of conversations internally in the last couple of years about T-shirts and hats that have our logo on them, because those are products that people often see and it becomes a little bit of a fashion-led movement for whatever set of reasons. I'll never understand it. And I'm not going to spend a lot of time trying. 

 

Ryan [00:13:35] You know, people see that logo and then other people want that logo. And all of a sudden you've got this growing piece of your business that you never really set out to drive. And so one of the conversations we have internally a lot is really what you just spoke to, which is, is there a way that we can use this logo business as kind of a gateway drug to bigger ideas. And I think that the answer is yes. 

 

Ryan [00:13:55] But the one thing I know for sure is, just selling more product with our logo on it does not make it a gateway drug. That does not put people on a pathway to thinking differently about their purchasing decisions. And so I think what we have an obligation to do is try to peak their interest, but also surround them with additional context. And that's something that we think about all the time on our ecommerce site, on our other digital sites. We've got quite a few. 

 

Ryan [00:14:22] We're in the food business. And we also have a site called Patagonia Action Works, which is a site to connect our grantees, about 1,400 around the world, with our community and our retail stores and any of the wholesale accounts we do business with. What's really important to us is just creating context in all of those environments so people get a sense of what we stand for. 

 

Kinsey [00:14:45] Yeah. It seems that this is really, at its core, about practicing what you preach in terms of your promises to do better, be better, sell better. Are there any companies or brands you look to as a good role model in actually practicing what they preach? 

 

Ryan [00:14:58] I think that there's a number of small brands and businesses, and again, I'm here in Europe right now and I've been here for the last six years. So there's certainly some over here that I've had a lot of interaction with. There are some, of course, in the U.S. and other parts of the world as well. But I find it's generally the smaller ones. 

 

Ryan [00:15:15] I think that what you see—and I'm speaking about apparel here, but more broadly as well—is this constant—and you can call it greenwashing, it certainly butts up into that area—but it's a broad spectrum of companies talking about their values and the steps that they're taking. And almost, without exception, it's if you could do sort of a balance sheet, it's maximum harm, long lineage of harm and modest steps, but a lot of communication around the positive things that they're doing. And at the end of the day, most of it's marketing. 

 

Ryan [00:15:46] And so, when I look around at larger companies and all the claims that are being made, I do think the vast majority of them are hollow. I think in the apparel sector, one of the statistics that I reference a lot and I find it really depressing every time I say it is, you know, in the mid-'90s, we came to understand the negative impacts of conventionally grown cotton. And so in 1996, we made the decision—and we've never wavered from that—for 24 years now, we've never used anything but 100% organically grown cotton. 

 

Ryan [00:16:16] And at the time we made that decision, less than 1% of the world's cotton was organically grown. And 24 years later, you hear about organic cotton and all kinds of marketing and communications. Today, less than 1% of the world's cotton is organically grown. And so we haven't changed the system. The apparel sector hasn't adopted this at scale. 

 

Ryan [00:16:35] Instead, what they've done is they've interwoven bits and pieces of organic cotton and made big stories about them. They've birthed other initiatives that have lower standards as sort of transitions towards better ways of growing cotton. But ultimately, it's pretty simple. Let's just embrace organic cotton. Let's create a market for it. Let's incentivize farmers to grow things in the most Earth-friendly way as possible. And there just hasn't been a collective action towards doing that. 

 

Kinsey [00:17:00] Yeah. I want to get your perspective, Ryan on what actions, like the decision to only use organic cotton, mean for the business from a more financial perspective. We're going to do just that in a moment. But first, a short break to hear from our partner. —

 

Kinsey [00:17:14] And now back to the conversation with Ryan Gellert. So, Ryan, we've been talking a lot here about Patagonia's, I would say, number one relationship with customers as it pertains to being responsible for the environment, for the world around us and doing your best to be the best that you can be. But also there is a financial perspective here that I think is worth considering. 

 

Kinsey [00:17:34] So how do you think that these efforts to be conscious about the environment and about the people who you're employing and, you know, even the materials you're using, to your earlier example of only using organic cotton, how does that impact the way that you make money? Does it make you less money to make these priorities? 

 

Ryan [00:17:52] You know, I'd say yes and no. I mean, I think sometimes when we are sort of birthing new technologies or new ways of doing things that can be expensive, there's a limited market. And I'll go back to the story about organic cotton. At the time we made that transition, Yvon, again, the founder and owner of the company, laid out a challenge to the organization. Once he fully understood the impacts of the conventionally grown cotton, he said, you have 18 months to convert everything. 

 

Ryan [00:18:16] And I think it was roughly 40% of the business at that time was cotton product, and it was all conventionally grown. And people in product across the organization said it can't be done. You're going to put us out of business. And he said, we've got 18 months. And we almost put the company out of business. But it was important enough to Yvon to bet on that decision and to ensure that the standard was met on a relatively short timeline. 

 

Ryan [00:18:42] And I think that there have been times in our history where we have had to really push the tempo on something. And in doing so, it creates a bunch of complexity internally, or there's not a fully developed market, or whatever the issue may be. And it certainly can impact our margins. But I think ultimately, what we're trying to do is change the systems. 

 

Ryan [00:19:04] And so it goes back to a question that's often asked, which is what can companies do or what can customers require of the companies that they buy clothing from? You know, using organically grown cotton is a great example. And there's no good excuse why companies aren't doing that at scale. There's just no good excuse. 

 

Ryan [00:19:23] Adopting greater usage of recycled materials, participating actively in helping their customers recycle product at the end of its life, designing for repairability, building things of quality, partnering with their customers to repair—all of these things are pretty basic. There's plenty of reasons why companies don't do them. They do cost money, they can be logistically complex to set up, but that's part of the obligation. 

 

Ryan [00:19:49] And so to answer your question, yeah, these things, particularly new ideas, are a challenge for a period of time. And then we figure out how to scale them. And ultimately, I think it's built into our business. 

 

Kinsey [00:20:01] Yeah. And part of Patagonia's DNA, it would seem, from this conversation is you're more comfortable risking the longevity of the business, maybe, than risking being environmentally irresponsible. 

 

Ryan [00:20:11] Yeah, I mean, one of them is non-negotiable and the other is. And Patagonia, from its very beginning, has been an experiment in doing business differently. That's the whole big idea of Patagonia. And, you know, it's funny as the [indistinct] get older and the business becomes bigger, and it has this sort of legacy of impact in a variety of ways. 

 

Ryan [00:20:30] I think it would be natural to assume that maybe they just, at some point, just say, all right, enough's enough. And the reality is with each passing year, that the commitment to these things just continues to distill. 

 

Kinsey [00:20:41] What does this mean for pricing of the products that you sell? It's one thing to have these missions at the top and to make the decision to say within 18 months, we're only going to use this certain type of organic cotton. But, when it makes its way down to the person in the store trying to buy something, how does that affect the price that I'm going to pay to buy a fleece pullover? 

 

Ryan [00:21:01] Yeah, our products are competitively priced, but they're in the, sort of the upper, probably third, within relative to our competition. So other products that are similar from other brands by category, maybe not by how they're built. And so I would say that it's rare that we're setting new price thresholds, that we're at the very top of the market. 

 

Ryan [00:21:20] And at the same time, we're absolutely comfortable charging people what we feel is the true cost of the product that we make. One of the things that we're really committed to and very proud of is the fact that we are unapologetically a for-profit business. And I say that not because we use the fact that we make money to line the pockets of our ownership, but instead, because that's the big idea. 

 

Ryan [00:21:44] I think in 47 years, if you ask me what's the biggest impact that Patagonia has had in its history, I would tell you, operating from within the bowels of business and proving that a business can do good by doing well. I think that's our biggest contribution so far. 

 

Kinsey [00:21:59] Yeah, absolutely. So here's an interesting sort of tension here. I've tried to read up on some interviews that famous Patagonia leaders have done before. And Yvon Chouinard said, quote, I couldn't give a shit about how much money we make, end quote, which I think [laughs] is to the point. Exactly, you know, saying exactly what it means. 

 

Kinsey [00:22:16] But, there's also your predecessor. Rose Marcario, said, quote, that you can create new markets and make more money by doing good work for the planet. So which one is more important to you? Is it making money or not making money that matters most? 

 

Ryan [00:22:30] Making money at Patagonia is not the goal. I mean, it never has been. I think that under the last, I don't know, five, six, seven years of Patagonia's history—so, first of all, a little bit of context for me. I've worked in the outdoor industry for my entire career. And so I've been looking at Patagonia from not too far a distance for a lot of my professional life, and that I've been working for the company for the past six years. 

 

Ryan [00:22:51] And it was only in the last five, six years that Patagonia really started to grow significantly and reach a much broader set of customers and really scale its impact by increasing its visibility. And that was under Rose's leadership. And I think she had the insight that if we had more visibility, we could have more impact. I think it was a good insight. 

 

Ryan [00:23:10] I think she also had the capability to really scale the business. I think at some point, though, you've kind of got all the visibility that you need, and whether we're 1 billion, 2 billion, 3 billion or 5 billion, I don't think it really matters. I think we have gotten past the point of being this cute little story from Southern California that doesn't apply to other companies in the apparel sector or beyond. 

 

Ryan [00:23:32] And so I'm not motivated at all about how big we are in revenue, how much money we make. We are profitable. We'll continue to be profitable because there is no mission without a margin. That discipline is a requirement for us. But how big we are is not what motivates the Chouinards. It's not what motivates me. I don't think it's what motivates too many people at Patagonia. 

 

Kinsey [00:23:52] Yeah. I think that there is no mission without the margin is a really neat way of wrapping it up and putting a bow on it. Because at the end of the day, if you really want to accomplish widespread change, you have to meet a lot of people where they are. 

 

Kinsey [00:24:04] So how important is scale? Let's say if you consider Patagonia's role as this sort of role model within the apparel industry, as a company that is, for the most part, doing things right in terms of taking environmental responsibility really, really seriously. Can a smaller company that's just getting started accomplish that without the scale that Patagonia has? 

 

Ryan [00:24:24] Yeah, I think absolutely. I think the ones that are more challenging are the really big ones that have never done it. And trust me, I'm not going to let them off the hook in this conversation either. I think they've got the resources. They've certainly got the knowledge. They know what better looks like. They know where their areas within their supply chain and elsewhere are problematic. It's questionable whether or not they commit to doing something about it. 

 

Ryan [00:24:44] But, as I said before, I think some of the companies that are doing the best work—when I think about footwear specifically, which has traditionally been a pretty dirty industry, there are some really brilliant advances in bioengineering and eco engineering in footwear. And they're all coming from small companies, not the big ones, that are leading the charge. 

 

Ryan [00:25:03] So I think that building a brand that's really rooted in that, I think takes a certain amount of discipline, particularly early. There's plenty of pressures that can pull you off that trajectory. But I think that all the innovation, almost without exception, is coming from smaller brands. 

 

Kinsey [00:25:19] And the smaller brands eventually, in a perfect world, grow into larger brands who don't have to deal with the challenges of shifting their entire business model by the time it's really difficult to do so—when [chuckles] you say 18 months and maybe they won't be able to do it. 

 

Kinsey [00:25:33] But, the question that I think is really pressing here is why there aren't more of you. If you know how to do this, if you can do it and make money, how come more companies aren't endeavoring to be like Patagonia? 

 

Ryan [00:25:45] I think that the reasons are twofold. One is greed and the other is a lack of creativity. And I think that that's just true in making decisions around how people run their business as it is in broader settings, and it applies to government as well. But I think so often the way things have been done dictate the way things continue to be done. 

 

Ryan [00:26:07] And I think taking responsibility for the impact of your business, particularly if you make broad claims and say, oh, we're not just going to do this in a corner, we're going to do this throughout our business, it's a big transition that a lot of companies will have to make. 

 

Ryan [00:26:22] And again, I want to be really careful and really clear here. We're not truly a sustainable business, and we've been at this, throwing at it basically everything we know for 47 years. And we've still not gotten to that place yet. And so it is hard work. 

 

Ryan [00:26:36] But I think it's really, really important that companies look at this holistically and just start taking steps in the right direction. And they understand from the beginning that sustainability is something with no end to it. 

 

Kinsey [00:26:50] So I have been talking about Patagonia as one of the larger companies endeavoring to do what you want to do here, and be good stewards of the world around us. But when you think about the scale of, say, a company like Walmart, Nike, something like this, one of these giant, multinational corporations famous for being big—if they were to implement the kind of changes that we've been talking about here from the top, would that have any meaningful impact on say, like a trickle-down impact on the apparel, clothing, fashion industries at large? 

 

Ryan [00:27:19] Yeah. It would have tremendous impact, and each of those companies do quite a bit of work on sustainability. And I'm going to sidestep sort of offering an opinion on how meaningful it is [indistinct]. I will tell you that both of them work on topic sustainability at scale because we've had a lot of interactions with each of them. 

 

Ryan [00:27:34] I think if companies of that size would really embrace circular design principles, the use of recycled materials, moving past all conventionally grown natural materials, specifically cotton, I think it would have a massive impact on the markets and ultimately the prices and the availability of those materials. 

 

Ryan [00:27:55] I think it would also really advance significantly the technological know-how to solve some of the biggest issues that we're confronted with as an apparel and footwear sector. And I think some of the biggest ones are recyclability, particularly mixed materials. Break them down to their component parts and then reuse them. 

 

Kinsey [00:28:14] Would that mean higher prices for a large company as well? Like higher prices for the consumer? 

 

Ryan [00:28:18] I think it could for a period of time. I think that it's funny. It so often comes back to price. But when you think about buying products at a cheap price and then using them three times and throwing them away, I mean, I guess if you really do an accounting at the end of the year, how much you're spending on footwear or how much you're spending on apparel, I'm not convinced that—I'm actually quite convinced that buying quality is the competitive, if not cheaper, way to go ultimately. 

 

Ryan [00:28:42] Again, we partner with our customers to help them keep their product in use longer through product repair. So if somebody has a Patagonia jacket and the zipper breaks, it's not headed to the landfill. Send it to us. We'll repair the zipper. We'll get it back to you as quickly as we can. 

 

Ryan [00:28:55] And I think if you see yourself as the owner of a product versus the consumer of it, I think it just creates an entirely different relationship with product. And I think traditionally people have not seen apparel as fitting that description. 

 

Kinsey [00:29:08] Yeah. I think trying to understand what we have in our closets or in our dresser drawers—doing this kind of accounting that you've talked about at the end of the year. How many tops from Zara? How many shitty pairs of shoes did you buy that you only got to wear a couple of times before you had to buy more? 

 

Kinsey [00:29:24] It sounds so good, right? It sounds great to think about investing in pieces, pieces that you can wear for a long time and have for a long time. But I just wonder if anybody's actually doing it. It seems like a big ask to have everybody kind of shift their perception of what's in their closets because it's better for the world. Like that has traditionally not been [chuckles] encouraging enough to get people to make meaningful change. 

 

Ryan [00:29:46] Yeah, no, I agree with you. But then I also ask, what's changed that's made that the case? Because if you look at the statistics on the amount of apparel that people own and the number of times that they wear it and ultimately in real terms, the amount that—what it costs to buy a shirt, a jacket, a pair of pants, pair of shoes. 

 

Ryan [00:30:03] The prices have gone down. The usage has gone down. And the volume of stuff people own has gone way up. And I think that it's a couple of things. Number one is the way that the product is made. So that's a responsibility first and foremost of the companies making it. It has an impact on where the product is made and what people are paid to make it. The use of materials and otherwise. 

 

Ryan [00:30:22] And there's also—there's just this tremendous marketing machine. And I think Zara, to reference one specifically, is kind of at the heart of that, which is that's just a completely broken model. And so I think that there's a tremendous amount of responsibility that exists with these companies. So I think the way you framed the question was sort of through the eyes of individuals. And I think as individuals, we have a real responsibility in this as well. 

 

Ryan [00:30:47] But I think also the third place where I think there's responsibility that's under-leveraged is government. I think there's got to be regulation where businesses of all kinds, including the apparel sector, have got to take responsibility for the externalities of the business they run. 

 

Kinsey [00:31:01] Yeah. I want to talk more about the government aspect and their responsibility in just a moment. We're going to do that after a short break to hear from our sponsor. —

 

Kinsey [00:31:09] And now back to the conversation with Ryan Gellert. So, Ryan, you just made mention of the fact that there is responsibility within government to incentivize and encourage corporations to do better, to be better. What does that responsibility look like? What should regulation look like? 

 

Ryan [00:31:25] Well, I think that fast fashion specifically, in this notion that you can buy a T-shirt for, I don't know, $5 or $7, and it's made of exceptionally low quality and materials, and then it's cheaper to—certainly cheaper with almost all of this stuff—to pitch it when it's got any kind of problem with it than it is to repair it. 

 

Ryan [00:31:48] I think that there's got to be a different calculus for this, where government's got to intervene and require some level of responsibility for companies that are making product of this standard. I just think exactly what that looks like, I'm not clear. But I think that the footprint of these businesses has got to be—it's got to be managed differently. 

 

Kinsey [00:32:08] When we think about the biggest problems with fast fashion, I think one of them is certainly the environmental impact. The second is absolutely supply chains, the way that workers are treated and the impossibility of actually tracking the full supply chain of a sweater on the rack at Zara or H&M from where it got its start. 

 

Kinsey [00:32:26] Within the environmental regulations, I think that maybe it might be a little easier to understand the impact or to measure the impact. These are scientific measurements. But, within the supply chain part of this equation, oftentimes it is nearly impossible for a retailer or clothing company to actually know every part of its supply chain. 

 

Ryan [00:32:42] We hear this all the time as an excuse, but is it then going to be just as difficult for a regulatory body to step in and actually affect change if it's hard to even know where the supply chain starts, where it turns, where it ends, et cetera? 

 

Ryan [00:32:56] No, I mean, I think that that excuse, which I've heard a million and one times, is bullshit. I mean, I think, you know, again, there's this paradox with big businesses where if you read their public statements, they're incredibly sophisticated, riding the leading edge of trends. 

 

Ryan [00:33:14] Have people working across functions, departments, and around the world on managing this business as efficient stewards of public money for those companies that are publicly traded. And then you turn around and say, where was this product made? Don't know, too complex. I mean, I just don't buy it. 

 

Ryan [00:33:31] And so I think that there's basic technology today, RFID to blockchain, that can make it really simple to track the origin of materials, where products are made, the different steps in the supply chain otherwise—if there's a will. So, I think that that's a really convenient excuse. 

 

Kinsey [00:33:46] How do we call companies on that bullshit? 

 

Ryan [00:33:49] Well, I think that first of all, I think that people are really smart to be cynical about the motivations of companies. And I say that all the time. And if you want to include Patagonia in that, please do. I think, you know, look, I'm the CEO of Patagonia sitting here talking to you today and answering your questions to the best of my ability about how we think about business. Some of the things that we actually do, but also the philosophies that underpin our business. 

 

Ryan [00:34:10] But as a starting place, I would be cynical about the intentions and motivations of every business. I think the only way to ever really get a clear sense of what motivates a business or whether they truly are living up to the values that you think are important are looking at their total body of work. I've never found any other way. 

 

Ryan [00:34:27] I think as far as calling bullshit on companies, I think it's doing your homework, looking to organizations that spend a lot of time understanding how product is made, the environmental impact, the social impacts and otherwise in supporting their work. Asking tough questions and then making decisions with your purchasing that align with your values. 

 

Kinsey [00:34:47] Don't just buy it because it's convenient. 

 

Ryan [00:34:49] And one other standard, as it were, that I think is helpful is B-corps. That's a community of companies that have been audited independently and assessed. And I think that that's a good place to look as well for companies that are not just making claims, but have had some sort of third-party assessment and certification of how they run their business on behalf of people, the planet. So I think that's an area I would encourage people to look as well. 

 

Kinsey [00:35:18] Yeah, absolutely. And we see time and again, you know, we had Dave Heath from Bombas, which is also a B-corp, on the show. I believe it was early 2020, it feels like a lifetime ago. [laughs]

 

Kinsey [00:35:27] But, the theme that we keep coming back to when we make episodes that are about, say, B-corp or corporate social responsibility or the impacts of fast fashion like we're talking about this week, companies that are trying to actually do good tend to also financially do well. They make money. 

 

Kinsey [00:35:44] And I know that's not always the goal with your experience at Patagonia, but I think it's important to highlight that you don't have to trade money and being profitable and being a good business with also being responsible and trying to do the best by the world and also by your consumers. I think that's really important. 

 

Kinsey [00:36:01] So before we kind of wrap up here, Ryan, I do have one more kind of big picture question for you. There's this interesting sort of, I don't want to call it a separation, but maybe this duality that exists within the company, as I'm speaking to you, that I've come to understand about Patagonia. 

 

Kinsey [00:36:15] That there's the part of Patagonia that wants to sell you a cool hat or a warm, cozy pullover that you'll have for years. But there's also the part of Patagonia that wants to be an activist company. Do you think that your competition within those two sort of separate entities of Patagonia are the same companies or different companies? 

 

Ryan [00:36:35] I don't think there's too many companies out there that are comfortable engaging in activism, to be honest with you. I think that one of the sort of silver linings of the last four years in the U.S. Is that you're finally, finally seeing the CEOs of some large, publicly traded companies offer opinions on things and provide some level of leadership on topics, whether they be immigration-related, climate, or otherwise. And I think that's encouraging. 

 

Ryan [00:36:58] But I think it's also been out of desperate necessity. And so I don't know what we'll expect as we look ahead for the next four and beyond years. But I think, in short, there's not too many companies that are really comfortable with engaging directly in activism. And as I said before, I don't think it's something that we weren't founded with that idea in mind. We've done out of necessity. 

 

Ryan [00:37:21] And I think what's critical for us is, flippant as it may sound, is when is it the right time for us to call people out and when is it more effective to call people in? I think ultimately what we want to build, and what we want to be in service of, is a community of people who are really committed to being good stewards of this planet. That ultimately is what we want to be a part of. 

 

Ryan [00:37:43] I think what's really a challenge, and I look at this as the outcome of the most recent U.S. presidential elections, you know, you had almost half of Americans line up behind somebody who was, you know, in every way, a climate denier. And that's a real concern. And so I would like to figure out how we become more of a constructive part of the dialog in helping people understand what's so important to protect. 

 

Kinsey [00:38:11] All right. And it will be exciting to watch how all of that unfolds. Thank you, Ryan, so much for coming on Business Casual for this honestly, very refreshingly transparent and honest conversation. I loved hearing your perspective on where Patagonia has been, where it's going, but also where it falls short, where any company falls short. 

 

Kinsey [00:38:28] We all can understand how that happens, both with the companies we give our money to and our own personal lives. So thank you so much for the incredible analysis and insight and for your time. I really appreciate it. 

 

Ryan [00:38:38] My pleasure. Thanks so much. 

 

Kinsey [00:38:49] Thank you so much for listening to this episode of Business Casual. After making these episodes, I've taken a long, hard look in the mirror and at my closet. So I am pledging right now to buy less fast fashion. Ideally, no fast fashion. 

 

Kinsey [00:39:03] That means I'm going to need your help finding the best sustainable fashion brands to frequent. Head on over to our Twitter. We are @bizcasualpod. And let us know which sustainable brands you love the most. See you next time. [sound of a ding]