Rick Ridgeway: ‘There is no business on a dead planet’

Patagonia’s VP of Public Engagement, 67, adventurer, environmentalist, on business purpose and corporate growth. 

 

Rick is one of the world’s foremost mountaineers.  With three companions he was the first American to summit K2, considered the hardest of the world’s high-altitude mountain to climb. Rick also participated in the first big wall climb in Antarctica.  

 

We want to use our company as an agent for environmental and social justice protection. Our mission is to make the best product with no unnecessary harm. The 3rd part of that mission is to use our business success to implement solutions to the environmental crisis. That's why we're in business. 

 

Businesses that misuse the word purpose do us all a disservice. We have to define purpose. It starts with acknowledging that the definition of purpose must be more than just a return to shareholders as it has to include responsibility to stakeholders. Fundamentally, that what purpose is. 

 

Commitment to environmental responsibility is a commitment to business value. Because every investment into environmental protection Patagonia has made, has improved our business performance. 

 

Purpose means we get to pick the best people coming out of business schools. Recruitment and retention are the top benefits of staying true to your purpose. 

 

You can go surfing anytime you want, just don't let your co-workers down. That’s how Patagonia employees work. We’ve been at forefront of figuring out how to bring professional and personal lives together as seamlessly as possible. We’ve established a day care centre, which, arguably, became the most innovative thing that Patagonia’s done. And that has become one of the main reasons of having highest employee retention. 

 

There is no business on a dead planet. Why the planet isn't a KPI for a business? Every business KPI should be related to the health of the planet. 

 

Don't buy our jackets if you do not need them! There is a tension between selling more jackets and saving the planet. Patagonia’s board, which Rick admits is rather small, made a decision to take their bestselling jacket line down as it does a lot of harm to the environment. Why? Because it’s crucial to run all your business decisions against your mission. Rationalising business growth is a tough process. Not everybody at the company gets it, but that’s what Patagonia stands for. 

 

Transparency is the willingness to tell the world what we're doing well but also the willingness to share what we're doing is not so good. That’s the only true definition of transparency. We found out that our third tier suppliers used forced labour in dye mills in Taiwan. We made it public and engaged mills and the dye houses, employee brokers and the governments, so the solutions are underway. We don’t think that could have done it better without staying true to our statement of transparency.   

 

Acting sustainably shouldn't be a separate issue for business, so why should it be a separate department? One of the most sustainable companies in the world – Patagonia – doesn’t have a sustainability department.  

 

Rick represents and promotes the company’s core values with external stakeholders including NGO’s, trade organisations, academics and universities, and government agencies. He serves on the boards of Conservacion Patagonica and the Turtle Conservancy, and is on the Advisory Boards of World Wildlife Fund, Unilever USA, and the Leonardo DiCaprio Foundation.

 

He was founding chairman of the Sustainable Apparel Coalition. During his 12-year tenure at the company he has developed and launched environmental and sustainability initiatives including Freedom to Roam, the Footprint Chronicles, the Responsible Economy Campaign and Worn Wear.  

 

Rick lives with his wife Jennifer in California, they have been married for 33 years, and they have three grown children.

 

Elina Yumasheva is head of content at The Crowd. 

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Why purpose isn’t reverse psychology

When Rick Ridgeway, VP of Public Engagement of Patagonia, speaks at an event you can hear a pin drop. Despite being called The Real Indiana Jones by Rolling Stone magazine, he is a quietly spoken man and audiences have to strain their ears. But what comes out is pure inspiration.

 

He told us a story on Monday evening at the Crowd Forum that perfectly illustrates how most people misunderstand the value of purpose. He shared the background story of Patagonia taking out a full-page ad in the New York Times on Black Friday in 2011. Their advert has a picture of its best-selling R2 jacket, with the arresting line ‘Don’t buy this jacket’. 

 

Rick ran the ad to make people to think before they joined in the consumption frenzy that Black Friday has become. It explained the environmental harm associated with the manufacture of the jacket, and asked people to get the most out of their existing clothing through repair. It pledged to join the Common Threads Initiative ‘to reimagine a world where we take only what nature can replace’.

 

What happened next? Patagonia sold a lot of R2 jackets. The company was criticised by some for being hypocritical. The most telling response came from Advertising Age, the premier US advertising magazine, who called it “the most brilliant use of reverse psychology in the history of advertising”. As Rick explained, ‘they didn’t believe us. They didn’t believe we were serious about the message under that headline’. 

 

A quick google will show you there is now a category in marketing called “Reverse Marketing”, which cites Patagonia as the pioneer. An industry that largely doesn’t understand purpose has turned it into a dark art. 

 

OK, you’re thinking, but they’re still selling a lot of stuff - Patagonia’s revenues are growing fast, reportedly around $800m. How should a sustainability purist feel about that? Well, probably pretty good. Patagonia is constantly developing environmental innovations, which it shares with its competitors. It donates 1% of its revenues to environmental causes. As the company grows, the environment benefits, or as Rick put it ‘We want to use our company as an agent for environmental protection. That's why we're in business.’ 

 

The business case for purpose

 

Sacha Romanovitch, CEO of Grant Thornton UK, told our audience that Grant Thornton is becoming selective in how it works with clients on tax. ‘If the client’s whole goal is not to pay tax, we don’t work with them’, consistent with its purpose of building a vibrant economy. If purpose is revenue limiting, or incurring higher innovation costs, where is the business case?

 

For both Rick and Sacha, the return comes through a myriad of different and often intangible areas. It’s the intangible element that may be the stumbling block for many people who like to see hard numbers. They agree that the main return lies in the ability to hire and retain staff.  Patagonia is able to pick the best people coming out of business schools, whilst Grant Thornton is hiring people who want to bring their ‘whole selves’ to work. 

 

They gave use some numbers. Since Grant Thornton launched its purpose-led change management programme, its unplanned employee turnover has fallen from 20% to 14%. Patagonia gets 300-1200 applicants for every job they create. And it seems our audience shares these views – our Twitter poll saw 56% select “more engaged employees” as the biggest return on purpose. 

 

We covered a number of other areas of the return on purpose – the ability to innovate, cost savings, brand reward, risk management and more. If you want a deeper dive, watch the discussion online starting at minute 19. 

 

The impression they left us with was that when you get purpose into the heart of your business, it keeps giving.

 

Patagonia may be the global poster child of a purpose-led business, and many big companies will struggle with the chasm between their business and Patagonia. For those, Sacha is one to watch. ‘No company is whiter than snow’ she says, ‘but not being perfect is the reason to start the journey’. We’ll be following Grant Thornton’s purpose-led change management programme closely.

 

Jim Woods is CEO at The Crowd.

 
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86% of London’s corporate sustainability experts want to remain in the EU

On the 11th May The Crowd hosted a debate on whether the UK is better off remaining in or leaving the EU from an environmental policy perspective, with over 200 corporate sustainability executives. The final poll result was emphatic: 86% voted to remain, 9% to leave, and 5% were unsure.

 

Was it a victory for remain or for intelligent debate? What startled us most was the positive atmosphere in the room after the debate. With much of the national debate focusing on emotion and sound bites, both sides can quickly become fearful of the wrong outcomes. Thanks to the passionate but intelligent positions of our experts, there was a feeling that both outcomes could be OK as long as we have the right people making decisions.

 

We had some of the leading minds on both sides of the argument, with tight moderation by Axel Threlfall. We began with an overview of our environmental policy relationship with the EU from The IEEP’s David Baldock, who made it clear that there needs to be a lot of upside if we are to undergo a period of considerable environmental policy uncertainty. The remain argument was articulately made by Caroline Lucas MP and Professor Paul Ekins, with support from Lord Marks. Michael Liebreich and Lord Callanan made the case for leaving the EU.

 

There were so many good points, but here are four arguments that we found striking.

 

The EU undermines our cultural willingness for environmental policy

 

Michael Liebreich made an argument for leaving that we hadn’t heard before, and which generated a lot of conversation afterwards. He said the existence of Europe means a lot of our environmental lobbing is focused on Brussels rather than Westminster, which takes debate and education out of the UK. When policies then arrive from Brussels, they are then seen to be imposed by the mother ship, which increases them being unpopular.

 

“The fact is why would any NGO bother doing all the campaigning for all these things to influence the Tory party, my party or to change the debate in this country when quite clearly you get funded in Brussels to do so. And then the results are imposed… The politicians don’t really mind because they can turn out and say it’s Brussels fault.” – Michael Liebreich said.

 

The EU provides important environmental policy stability

 

One of the grounding arguments for remain is closely linked to the nature of the UK election cycle. When a newly elected government changes environmental policies it weakens the business case for key internal decision makers, diminishing the company’s willingness to respond. The EU protects against such volatility and gives credibility and security for companies to invest. Businesses would rather have a slow moving stability rather than fast moving volatile political environment.

 

Environmental problems need to be solved through collaboration

 

We had a healthy debate on air pollution, with all panelists agreeing that the London has one of the worst air pollution in Europe. For Lord Callanan that’s a sign that the European approach isn’t working. But for Caroline Lucas it is an example of why we need to collaborate more on policy. “Environmental problems do not queue politely at borders waiting for their passports to be checked. They are by their very nature cross border and therefore need cross border solutions.” Echoing his partner point, Professor Paul Ekins says: “if you want to collaborate, you have to be a member of the club.”

 

The EU lacks an understanding of environmental innovation

 

A big thrust of Michael Liebreich’s argument was that we need innovation to tackle environmental challenges, and he cited Elon Musk as example of why we can be optimistic. His views drew a lot of discussion on Twitter, #crowdforum. Michael told the audience that very few Horizon 2020 grants go towards environmental innovation – there are only 2 graphene projects, for example – whilst there are hundreds of social engagement projects. “We can only make environmental progress through innovation. Europe is not innovative” – he said. 

 

At the beginning of the debate, Axel Threlfall quotes some of the latest public polls, which are showing around a 45% Remain vote. The question we’re pondering over is why we got such a different outcome for this vote from the national vote. Is it because environmental policy requires more collaboration than other areas of policy making? Is our community just more collaborative than the population at large? Are we lacking in little Englanders? Whatever is the answer to that question, one thing we know for sure is that if the vote on the 23rd June is for Brexit, this community will feel a significant sense of loss.  

 

Watch the full EU referendum debate here.

 

Elina Yumasheva is head of content at The Crowd. 

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