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The Elephant in the Room

The Elephant in the Room

By Rick Ridgeway
Fall 2013

At a recent forum on corporate sustainability, it occurred to me that all the presentations were in some form related to innovation. New technologies for renewable energies, more efficient packaging, reducing transportation, reducing toxics, reducing water usage, recycling materials. These presentations were from high-level executives representing some of the largest global corporations: Unilever, Walmart, Coca-Cola, Hewlett-Packard. These executives’ efforts to decrease the environmental footprints of their companies were genuine and laudable and, in many cases, had been underway for years. Yet in those same years every global indicator of the health of our planet has continued to trend in the wrong direction. I leaned over to an executive from Google and told him that in Patagonia’s view, the only explanation was that our businesses continue to depend on annual, compounded growth, and growth was overriding the incremental benefits from the new technologies. “It’s interesting no one has mentioned it,” I said. He nodded and replied, “But everyone knows it’s the elephant in the room.”

Is there a solution? First let’s take a closer look at the problem, starting with the thoughts of ecologist Paul Erlich, who in the early 1970s described the human footprint on our planet as a multiple of the human population times the affluence of that population times the impact of the technology that makes up that affluence. Also in the early ‘70s, an international group of professionals called The Club of Rome – after the location of their first meeting – predicted that economic growth could not continue indefinitely because the planet would run out of resources to sustain it. The 40 years since have shown their predictions to be uncannily prescient. The Global Footprint Network, for example, calculates that we are currently 150 percent above the capacity of our planet to replace essential “services” such as clean water, clean air, arable land, healthy fisheries and stable climate. What about the next 40 years? By 2050, our population is predicted to go from 7 to 9 billion. But that isn’t the scariest part. At the same time, the affluence of that population is increasing 2.5 to 3 percent per annum. Plug the numbers into Paul Erlich’s formula, and by 2050 we will be at 300 to 500 percent beyond the capacity of our planet to renew itself. You don’t need an MBA to know that’s bankruptcy.

So why weren’t any of the executives at the sustainability conference talking about this? Because they all work for large multinational public corporations run by boards required by law to manage their companies to maximize profits for shareholders, and if they started to question their company’s focus on growth, they would likely lose their jobs. Fortunately, Patagonia is a privately held company, and since our shareholders – the Chouinard family – want to use the business as a vehicle for solutions to the environmental crisis, we can question growth as the underpinning of business, of the economy, and by extension, of capitalism as currently practiced.

Every year or two, we select a theme of emerging importance in the environmental community, and we go deep, discussing it in essays in our catalogs, on our website, in blogs, emails and in the displays in our stores. So for the next couple of years we will tackle growth as the topic of our next environmental campaign, inviting lead thinkers to contribute. But Patagonia is a company that is growing – and that for the last two years has seen growth in the double digits. You can fairly ask whether we are being hypocrites.

We had to answer the same charge last year when we launched our Common Threads Partnership to take mutual responsibility for the lifetime of the stuff we make and you – our customers – buy. We organized the partnership around the “Rs” of reduce, repair, reuse and recycle. Reduce is the controversial part. On our side, we pledge to make stuff that lasts a long time, and on your side you pledge to buy it only if you need it. We launched the Partnership a year ago on Black Friday, the start of the holiday shopping season, with a full-page ad in The New York Times. When we first contacted the Times to reserve space, they were pleased to work with us to find a price we could afford, presumably because they were excited to have us as a new advertising client. We also presumed they were surprised when they got the ad: a large photo of one of our best-selling jackets, with the bold headline, “Don’t Buy This Jacket.”

The copy then explained some of what we believe are the consequences of growth and why reducing the amount of stuff we all have in our lives is part of the answer. But how does that square with running a successful business? We heard anecdotally that some people did take us up on our suggestion, and they did buy less for Christmas, including fewer Patagonia products. But we also saw our sales continue to grow. And we heard from some who charged us with a hypocritical use of reverse psychology. The truth is, we meant what we said about the need for all of us to reduce consumption, but we realize we have to be transparent about the challenge of walking our talk. That is why we have an accompanying essay in this catalog on this topic, written by Yvon Chouinard, that examines Patagonia’s uneasy relationship with growth. Yvon writes, “I think we at Patagonia are mandated by our mission statement to face the question of growth, both by bringing it up and by looking at our own situation as a business fully ensnared in the global industrial economy.”

We also realize if we all got out of bed tomorrow and bought only what we need, business-as-now-practiced would collapse.
But if business-as-now-practiced is leading us to a cliff, what is the solution? While no one pretends there is any easy answer, leading thinkers are beginning to ponder a suite of changes that in combination could present an alternate path away from the cliff. In this campaign that we have chosen to call The Responsible Economy, we’ll examine what it will take to evolve our economy from unsustainable to sustainable and the fundamental shifts in our lives that it will require. We’ll invite essayists on topics such as redefining our relationship with stuff, our relationship with work, our relationship with food, our relationship with nature.

At its most fundamental, a responsible economy will require us to re-examine our relationship with ourselves and perhaps reset our personal definition of fulfillment and happiness. Those of you reading this may find these challenges daunting and even quixotic, and so do we. But I find comfort in knowing that buying more stuff and running to catch up every day is not satisfying to me. There must be a better way. And perhaps you will find insight, as I did, in recognizing that while these challenges have been wrought by the modern economy, they are as ancient as human society. Thucydides, describing the Athenians 2,500 years ago, wrote that they “are addicted to innovation. They are … daring beyond their judgment … they toil on … with little opportunity for enjoying, being ever engaged in getting … they were born into the world to take no rest themselves, and to give none to others.”

If this sounds familiar, it might be because, like the ancient Athenians, you too were taught by parents and peers to work hard, to acquire, to build, to create. Because they are ancient, we can consider these values perhaps part and parcel of who we are as citizens and even as a species. We must also consider, however, that even if these values date back to the fifth century BCE, where they have taken us in the 21st century CE is a new juncture that our human societies have never faced. The question – the challenge – is therefore to ask how we can redirect those values to create a better economy that leads us to a better world, instead of over the cliff.