SM: Hi I’m Simon Mainwaring, and I’m here at the Flagship store of Patagonia HQ in Ventura, California. I have a special guest here today: Rick Ridgeway, who is the VP for Environmental Initiatives. I’m super excited to talk to him about a new project that he just announced that is potentially transformative for the entire apparel industry. So, Rick, what’s it called and can you tell us a little bit about it?
RR: It’s called the Sustainable Apparel Coalition and it’s a group of companies in the apparel and footwear sectors who have gathered together at our invitation to develop a tool, called an index, that will measure the environmental and social footprint of manufacturing apparel and footwear.
SM: So is this just for Patagonia or the outdoor apparel industry as a whole?
RR: Well, we started this project with just the outdoor industry, and as we proceeded in developing the tool with some of our colleague companies like Northface and Timberland, it occurred to use that our efforts would be leveraged if we could get companies outside of the outdoor industry to use the tool we were developing. So, how to do that?
We had been in conversations with Wal-Mart, helping them with some of their sustainability goals, and it occurred to us that if Wal-Mart used us tool, that would be leverage. Then we paused even more and thought, what if it was Wal-Mart and Target and JC Penny’s and Kohl’s in Europe. What if it was H&M, Marks and Spencer, Nordstroms, etc… What if it was all the major retailers in the world and all the major manufacturers of clothing? Then we have really scaled it. So instead of asking Wal-Mart to just use the tool, we asked them to join us in inviting all these other companies to get into a coalition all dedicated to developing this consistent way of measuring the environmental and social impact of manufacturing.
SM: In doing that, did you find there were benefits in having brands working together that would otherwise be competitive? Did you find there was an upside to that?
RR: Absolutely. It’s amazing to sit in a room with all these other companies and feel the pre-competitive collaboration that is in the room. Collaboration around the mutual goal of developing, in common, a universal way of measuring sustainability in products.
SM: The impact for that is far beyond the retail level in the store. If you have metrics that allow you to measure the impact of a product, that’s got to impact the value of a company.
RR: It definitely would, but it begins with influencing the way products get made. You know the old saying, you can’t manage what you don’t measure. Well, this tool measures it and through that measurement it will reveal all the places in the manufacturing of apparel and footwear that are most harmful to the environment, that are causing the most damage to the societies where the products are made. Those will be the things that all these companies together will be rallying around fixing first.
But that’s just the start, because when you bring visibility over the manufacturing process like that, and you reveal all these hot spots, and gather companies together who are dedicated to fixing them, that’s going to get the attention of equity markets, for example. Companies that are dedicated to getting ahead of these harms will be seen as getting ahead of their competitors as well, so that their stock is going to be valued over the stock of companies that are not paying attention to these values. We’ll have a tool that will allow those fund managers to measure the environmental impact of companies and brands.
SM: Which is incredibly important to consumers as well, not just equity markets. Consumers are now looking to their brands to be more effective stewards to the environment.
RR: So if these brands now have a sustainability measurement that’s based on hard numbers, that can be converted into a rating that consumers can also use, just as equity fund managers can use it to reward the companies that they feel aligned with, that match with their personal values.
SM: Absolutely. I imagine that, walking through this process, from doing it on your own at Patagonia, to doing it with your competitors, to doing it as an industry, to looking to the broader marketplace, that’s almost a template for a similar process across different industries. Surely there’s future potential in this area.
RR: Absolutely. It’s a model that we believe will be replicated in other categories of products. We’re already starting to talk to other companies already that have heard about what we’re doing and are getting interested in following our lead in this.
SM: In starting this, Patagonia clearly had some idea of what the responsibilities of brand should be in terms of the environment of other causes. What was the impetus of all this?
RR: It comes from our company’s mission: To try and find solutions to what we truly consider to be an environmental crises, and one way we try to do this is to influence other businesses to follow our lead.
SM: And the vision for the future? Where would you love to see us all in five to ten years, once all of this is embraced? Where do you think we could go?
RR: I think that if what we’re doing is replicated in other sectors like home furnishings and electronics and automobiles, then you’ll have a consistent rating, an apples to apples measurement of the environmental and social impact of those products, which will allow consumers to favor those products. It will allow banking and finance to reward the companies that are ahead. It will improve the stock performance of the companies that are behind this.
But at the end of the day, I think this will get the attention of government and I think it will create a political landscape, favorable to the passage of legislation that will allow what is called the internalization of the cost of manufacture that are currently not paid any attention to. That could be the biggest outcome of this: the cost of business on the planet that is currently not accounted for, to our natural ecosystems, to the biodiversity on the planet, to the health of all the citizens who depend on all those natural things for their lives, and for the businesses, for that matter, that depend on those natural systems—all those things will start to get accounted in the process of manufacturing stuff. That’s what we’re talking about.
SM: This is so exciting because there are a lot of consumers out there that are looking to brands to be stewards for the future and to reinstall hope out in the marketplace. The great news is that this is happening already. Patagonia has started this process. It’s not theory, it’s not wishful thinking. It has begun. What can we expect? What can we look for out there in the marketplace so we can see it rolling out?
RR: We want to figure out how to make this consumer facing, and we want to do that within a year and a half, so late 2012, or early 2013 you can start to see how this is going to start turning into a consumer facing rating. We’re talking with people who are already in that space, like GOODGuide. We are in conversation with them because we believe we have a way to partner with them to give them a much better metric to base their consumer facing tool on, which is the iPhone, where you can just go and put it right on the barcode where you’ll get our rating. Then, right here in the store you’ll be able to scroll down on your phone to see what’s behind that rating. But if we build the trust behind that rating that we think we can achieve, you will feel confident that if you buy a product that has a 94 rating instead of one that only gets a 75, you will be voting for the environment.
SM: If the brand is doing the work as Patagonia and your partners are, and if the consumers have the tools to measure that and reward those companies, the private sector can be a positive force for change.
RR: Yes. We’re all in this together. That’s what this is about. It’s recognizing that business cannot be apart from its responsibilities to help the societies where it does business. We all are on this earth together. The earth has very limited resources. Only by working together can we protect this one planet that we have to do business on and to live our lives happily.
SM: Well, congratulations on this work. It’s so inspiring, not just as an individual brand, but as an industry and as a map for all the other industries out there. Thank you so much Rick.
What Patagonia is a powerful example of a brand and an industry looking at the world in a We First way. Can you suggest any other examples?