The 10-step CSR Formula
Patagonia has created one of the most referenced corporate responsibility examples in the world, with an emphasis on storytelling, transparency, and reporting → here are lessons from the the CR leader.
Labeled purpose-driven, Patagonia’s brand activism gets louder, and profits increase.
When a company cares, is it called CR, TBL, CSR, sustainability, or environmentalism?
For Patagonia, the chosen label is responsibility — or maybe no label at all, as caring has been in the company’s fabric since day one. Yet, Patagonia openly recognizes they are also a part of the problem — as they contribute to carbon emissions, consumption, and supply chain issues. Their solution, be as responsible as possible with complete transparency and reporting, while using business as a means to supporting environmental and social causes — taking a stand for equality, labor rights, public lands, and nature.
While some companies waver on brand activism and transparency, Patagonia embraces it and views it as a catalyst to business improvement and innovation, ranking just behind Apple and Amazon as the World’s Most Innovative Companies.
One thing is clear though, a lot of work goes into setting the platform for Patagonia’s social and environmental responsibility. Before telling stories of CSR, responsibility, and brand activism, the foundation must be built. The process evolved over 40 years, resulting into Patagonia’s 10-point formula to CSR success, as follows:
Robert Eccles, from Harvard Business School, states simply, if the CEO is not advocating corporate responsibility it is a nonstarter.
In the case of Yvon Chouinard, Patagonia’s Founder, he openly states his priorities, saying, “Who are businesses really responsible to? Their customers? Shareholders? Employees? We would argue that it’s none of the above. Fundamentally, businesses are responsible to their resource base. Without a healthy environment there are no shareholders, no employees, no customers and no business.”
2. Mission: embed purpose into the mission
In the case of Patagonia, the mission is clear.
“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” Patagonia
Other examples of mission statements that align purpose and brand, include:
“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Starbucks
“Adding vitality to life. Meeting everyday needs for nutrition, hygiene, and personal care. Helping people feel good, look good, and get more out of life.” Unilever
Patagonia spear-headed the development of the Sustainable Apparel Coalition, an index of social and environmental performance. Measurement is at the core of the index. With detailed measurement, it uncovers ways to reduce waste and environmental risk throughout the supply chain.
4. Supply Chain
In a commitment to complete transparency, and in alignment with the above commitment to reporting, Patagonia formed its Footprint Chronicles — an interactive tool that maps the company’s factories and textile mills around the world, citing how long they have done business together, the number of workers and gender ratio, languages spoken, and what items are produced within the facility.
5. NGO alignment
NGOs have deep knowledge of pressing environmental issues, such as conservation, human rights, and economic development. And, they can help ensure that sustainability initiatives are rooted in sound development, theory and practice, and without having to reinvent the wheel or exacerbate social issues.
Patagonia pledges 1% of sales to the preservation and restoration of the natural environment.
Furthering their support of NGOs, Patagonia has a grant program for entities committed to protecting the environment.
6. Lingo and Branding
For those who perceive topics such as ‘circular economy’ mundane, Patagonia has mastered the art of translation. In other words, Patagonia translates the topic of circular economy into its widely popular campaign, Don’t Buy This Jacket.
“I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money. Our customers know that—and they want to be part of that environmental commitment.” Yvon Chouinard, Founder, Patagonia
Ironically, the more Patagonia campaigns the anti-consumerist message, the more people buy its products. For example, after launching Don’t Buy This Jacket, sales increased about 30%.
Patagonia is a certified B Corp. Meaning, a company’s overall environmental and social performance is measured and independently verified by a third party, scoring performance on a 200-point scale. The B Corp score is reassessed every two years.
8. Employee engagement
As a purpose-driven company, Patagonia’s employees are engaged. Along with a company purpose that employees are proud to align with, benefits include paid environmental internships, time off for civil disobedience training, reimbursements for commuting to work in a way other than driving, and a flex-time policy that allows employees to go surfing when they feel so inspired.
Patagonia’s clear and firm articulation of what the company stands for enables a strong fit between employer and employee, resulting in just a 6% voluntary turnover rate among full-time employees (compare this with the retail industry average of 35%).
What does all of the above mean? The combination of each of these points creates an orchestra of corporate responsibility. True CSR is the sum of all of the parts, and when done right, it is the perfect formula for telling an engaging story — a story that customers care about.
10. Telling great stories
The final step to CSR, is telling great stories. Patagonia has mastered the art of storytelling. The company’s in-house content creation includes books, movies, photographs, websites, bumper stickers, and advocacy campaigns; all carrying the theme of Earth first. Related, Patagonia funds those who create environmental awareness through film, with their Media Grants Program.
Patagonia connects its customers to the environmental movement, and then reinforces that point of view in its products. In return, people support the company, not just by buying products but by becoming more environmentally conscientious.
Patagonia’s content channels include athletes and enthusiasts who tell their Patagonia stories, cultivating a tribe of influencers who are truly passionate about the products and the mission — known as Patagonia ambassadors.
The days of competing just on pricing and branding are slowly becoming eclipsed by companies that are more responsible and disclose even more. In the case of Patagonia, they are at the pinnacle and the best example of successful cause marketing and brand activism.
It takes time
For Patagonia, a purpose-driven brand began in 1973. CSR, or corporate responsibility, is in the company’s DNA.
Can a company with no CSR in the DNA transform? The answer is yes, but it takes time, and it must start with CEO direction and support. And then, by following the template to CSR success, or the Patagonia 10-point formula.
About the Author
Is it necessary to cultivate a CSR culture before sharing stories of corporate responsibility? The answer is, no.
But, in order to share a credible and compelling story about company responsibility, it is important to report with transparency, and be sure there is alignment between company mission, supply chain, measurement, third-party verification, employees, and environmental and social claims. The best stories highlight people and projects, rather than services and features.
Unsure about the first step in telling your story? Reach out to me directly, and we can walk through it together.
Many companies have an engaging sustainabilty story to tell; most often it is only a matter of uncovering it. Are you ready to uncover yours?