Christina Binkley: This is Hot Buttons, a show about the future of fashion and culture on a changing planet. I’m Christina Binkley. I’m a contributing writer at Vogue business and the Wall Street Journal. This week, Charles Conn, Chairman of the Board of Directors at Patagonia joins us to share his story of how the company made the landmark decision to make Earth its only shareholder.

This was news not just in the apparel industry, but everywhere. Patagonia has been private its entire existence, and its 84 year old founder, Yvon Chouinard, looked to step away. He opted for something entirely unique: give the shares of the company to a 501c4 and a perpetual purpose trust designed to put the profits to work exclusively for the planet. Patagonia Inc. remains the same, but where the profits flow and how they’re directed is now in the hands of the Patagonia Purpose Trust and the Holdfast Collective. The market is still digesting this move. Will it signal a new path for purpose driven companies? Will it alter the course of late stage capitalism? Big questions, and we are delighted to have Charles here to help answer them.

Rachel Kibbe of Circular Services Group is in New York. Rachel, how’s it going?

Rachel Kibbe: It’s going great, Christina. I’ve got my Patagonia vest on today. 

CB: Excellent, dressing for the guest. And the CEO of Thrilling, Shilla Kim-Parker, joins us from the basement.

Shilla Kim-Parker: I have ascended to my bedroom. I’ve been promoted. We have snow on the ground here. So I should be wearing my Patagonia vest.

CB: I want you guys to know it is 40 degrees in Los Angeles right now. My cat went out the door this morning, turned right around, came right back in. Okay, it’s time to bring on our guest, Charles Conn. Welcome, Charles.

Charles Conn: Happy to be here. Thanks, Christina.

SKP: Charles, we’re so excited for you to be here. And we’re really excited, you know, we know you’re board chair of Patagonia, you’ve served on the board for 15 years. And we’re really excited to get into a conversation around that. And actually, you and I met at Aspen Institute Henry Crown Fellow Program, where we spoke a little about Patagonia and you were gracious enough to accept my hounding of you to come on and share the story in this forum. You are co-founder of Monograph Capital, a life science venture fund based in London, and you started your career as a consultant at BCG and McKinsey, you were the founding CEO of Citysearch, which then merged with Ticketmaster. And then your career choices took such an interesting turn: you became senior advisor to the Gordon and Betty Moore Foundation, their environmental program, you oversaw their preservation of wild salmon ecosystems. You’re the European Council member of the Nature Conservancy. And you’ve now served on boards of many conservation organizations that I’m just so curious to hear about. You started with a very, almost traditional business background, and then you made very interesting career choices, clearly in the support of environmentalism. And we’d love to hear more about: how and why did that happen?

CC: Yeah, well, it’s a long story, because I’ve become very old accidentally, but in some ways, I guess I’ve been finding my way back home. I was that kid who loved looking at pond water under a microscope and who always thought biology was great. And then somehow– the way the education system works– I ended up, you know, studying economics and mathematics and ended up doing something that probably wasn’t really what my heart wanted to do. After being a consultant and being a successful entrepreneur, I was able to stop and think, what do I really care about? And I was, I think, 39 years old. And I’d just done this amazing program at the Aspen Institute. And I really realized, wow, I need to get back to what I really care about, which is biology and conservation. And I started having conversations with people, and I was lucky enough to meet actually two different people on different rivers. One was Gordon Moore, who is one of the founders of Intel, and whose foundation, the Gordon and Betty Moore Foundation, I worked with for more than a decade. And Yvon Chouinard, who I met on a different river in British Columbia. And I’d say meeting both of those people, you know, changed my life and helped me direct my life to some bigger purpose than being a really clever consultant or entrepreneur.

CB: I think the most surprising thing I’ve seen a CEO say, I read in a fortune piece that you wrote, just in September, two months ago. And I wanted to ask you about it because this is literally coming from a longtime Wall Street Journal reporter who got very used to the talking lines of every CEO in the world over many years. And then you come along and you say… you wrote that shareholder capitalism has benefited you and many others, but, quote, “let’s be honest, it made its gains at an enormous cost, including increasing inequality and wide scale, uncompensated environmental damage. We have subsidized buoyant shareholder returns by fraying the fabric of our societies and using up the planet we live on. We all know this is happening– the world is literally on fire.”

RK: I have to say, that’s the same quote I pulled out from that piece, too. 

CB: Well, that’s fighting words! Is this something you’ve been feeling for decades? Is this something that you recently came to realize? And I’m also really curious about your colleagues out there in the corporate world, if you heard anything from them about it.

CC: I guess I’ve been feeling this way for a long time. I went on my own journey, and you know, I went to a big evil business school where I was taught about shareholder capitalism. I think Shilla knows exactly what I’m talking about. We read Milton Friedman, and we read that famous essay that he wrote, which is actually, you know, very well written and well reasoned, and wrong. And I think you tell yourself little lies when you’re building a career about why you can sort of forget about that big picture for now. And I’m sorry that it took me as long as it did to speak up. And I think it was, frankly, watching the kind of courage that you see in Yvon Chouinard that gave me the courage to call it out. We all did, you know, build wealth based on this system. And this system… it’s undeniable. It’s actually in the period of less than a century, we have built this remarkable system that’s given us many good things, you know, incredible health care. And, you know, there’s a lot of creativity and innovation in capitalism. But it’s terrible at distribution. And it’s terrible at not taking things that don’t belong to it, right? And, you know, we know what that means. That’s the communities that aren’t powerful enough to say no, and all the other creatures on the planet that don’t have a voice to say, “Hey, that’s not okay.” You think about it, like, you know, the planet had 5 billion years of stored solar energy, some of that’s, you know, in the form of hydrocarbons, when we started exploiting that about 150 years ago at the most. And we’ve used most of it, which is kind of remarkable, just in, really, in a couple of lifetimes. Not even a couple of lifetimes– four or five generations. So, you know… my father knew his great grandfather, who was born in 1860. So just in that span of four or five generations, we’ve completely destroyed the planet by this sort of incredibly creative, but also greedy and avaricious system. And you know what, I think we’re no longer at the point where you can push that pile under the rug. If you have kids or are about the future, you have to be honest about it. And we have to do something different, and pretty quickly.

CB: Do you share that message with your corporate colleagues? You’ve got an avid audience among environmentalists, but what about Wall Street?

CC: Absolutely. There are lots of people who talk their talking points. And you know exactly the kind of people who do that in the Wall Street Journal, who are members of the CEOs’ roundtable or the World Economic Forum. And they say, “Yes, this is really important stuff, and we need to work on it.” And they’ve introduced this concept of stakeholder capitalism. And they do care about the environment and the communities that they serve and the staff that work with them, but it’s mostly a fig leaf, and the system hasn’t really changed, even under the law. And, you know, in the Wall Street Journal– Bill Barr wrote a piece about this the other day– if you’re incorporated as a regular company, not a benefit corporation, under Delaware law, which most of our companies are, you’re required to profit maximize. It’s not an option. You can’t trade off environmental goals and social benefit and you know, wage needs for your staff. You’re required to profit maximize. Milton Friedman’s at work, Jack Welch was at work.

CB: That’s, you know, I didn’t see that piece by Bill Barr, but I didn’t realize you are required under the incorporation statutes of the state, but we all feel it. 

CC: Right. He was published in one of those op eds, and he laid it out very clearly. And he’s right under the law. He tends to be. But now we’ve also gotten caught up in all this politics, where now ESG, which is definitely an imperfect system, is called “woke capitalism.” Like looking after the environment, and the communities that we work in, and the teams that do the things in our companies, that’s woke to pay attention to that? That’s absurd!

CB: And “woke” in the insulting form of the word too, not the original one. 

CC: Not the way my kids use it. Yeah, no, that’s right. It’s meant to be the epitaph that it is, right? And, you know, that’s just a shame. Because we won’t be able to keep the wonderful creative and innovative aspects of capitalism if we don’t reform how we think about it. Alternative forms of government, which we’ve tried in the past and haven’t worked out very well are just waiting. We see hints of them across the developed world. 

RK: I was gonna ask a question, and I hope you take this in the spirit of the question. It’s kind of a non-rhetorical question. It’s a genuine question. So, you and others who have benefited from shareholder returns and have substantial wealth, and are now criticizing– because, like you mentioned, this is a journey. You kind of arrive at a life of advocacy and activism in the time that it takes, right? But I think that companies like Patagonia and individuals like yourself who have the means to affect a lot of change also have sort of a… it’s a double edged sword in that some people may say, “how can you now expect upcoming generations to do the right thing when the system hasn’t changed completely, and you’ve already benefited from it?” And so I wonder, are you all the right messengers? And/or, who are the additional correct messengers of this?

CC: Well, for sure. We’re not all the right messengers. And our parents and their parents are all complicit in this system, for sure. You know, I might tell myself that I was never involved in any extractive form of capitalism and worked, you know, building internet companies, but that’s, that’s a dodge. We’re all complicit in the system, too, right? And so we’re not the only important messengers. And I would argue that a 15 year old, now I think 18 year old Swedish woman had more impact as a messenger on these topics than, you know, any reformed capitalist, and has caused a lot of people to stop and pay attention. And if you ask Yvon, Melinda, his wife, you know, when they first started selling pitons, you know, out of the back of a truck so that they could climb for cheap with good equipment, they were not environmentally awake yet. And that’s something that occurred over time as the places they loved to go started to change. It has happened very quickly. I think what’s remarkable about someone like Yvon, and the way he’s run the company is it’s never been run to maximize profit. It was run first to make great gear, right? And then to do the least harm. And then to make an example of how you could do something differently. And then he threw all that out and said, actually, the only reason we exist is to save the home planet, and anything that isn’t contributing to that is a waste of our breath. Right? And that’s, you know, he did that three or four years ago, and we all said, “Whew, wonder exactly how that affects our day job.” And then, you know, he did the ultimate thing, which is he transferred all the shares to this structure that you described at the beginning, Christina, which makes it clear about what we do, you know, in our day jobs. So I think everyone has their own journey for how they pay attention to this stuff. But what’s important is that we all pay attention to it.

RK or SKP: Charles, I would love to dig more into the Patagonia decision around the trust. I know you were intimately involved. First, can you share the story about how you met Yvon?

CC: Yeah, well, it’s a funny sort of story. We had a common friend – I say “had” because he’s now gone. But this crazy old draft dodger hippie, acid dropping draft dodger, who lived up in British Columbia, who was a logger-turned-commercial-fisherman-turned-conservationist called Bruce Hill. Just the most remarkable man. I was going to see Bruce – who I was funding when I worked at the Moore Foundation – to go fishing with him, and he said, “Do you mind if I bring along a friend of mine?” And you know, the friend of his was Yvon. And we all climbed in a pickup truck the night before going fishing to drive up to this spot on the Skeena River up north and it was pouring rain, as it always does in British Columbia. And Yvon got out of the truck and was preparing to crawl under the truck to go to sleep. Just like, it was like sheeting, sheeting mud streaming. We were parked on an incline. It was sheeting mud streaming and I said, “What are you doing?” And he said, “Well, you got to go to sleep.” And I said, “Well, look, I got a tent. I’ll set up a tent.” And I set up a tent, and we shared a tent. And Bruce, who was a heavy snorer, slept in the back of the pickup truck. But, you know, that’s how I met Yvon. Sleeping in a tent with him. In the pouring rain, up on the Skeena River in British Columbia. Obviously I knew who he was, and already admired the work that he had done.

CB: Yeah. I mean, were you a little awestruck at that point?

CC: Of course! No, I mean, of course, I was awestruck.

CB: You know, I have to ask you this. Because when I read about what you guys did, I, for one thing, I hadn’t thought about a 501c4. I’ve written a lot about 501c3’s. But when I read that, I had to go Google what a 501c4 was. That is a very intricate structure that you have set up. Two questions. One is, what was the eureka moment? Can you tell me when somebody slapped their forehead and said, “Bingo! This is what we should do.” If it happened that way. And then I’m just curious about the backstory of how you guys worked out all the details. It sounds like it was complex.

CC: Yeah, it was. And these things always look straightforward in retrospect. And that wasn’t straightforward. I feel like it, you know, it took us two years. Well, first Yvon said, hey, you know, we need to do something different. I’m getting older, and we need a permanent solution to Patagonia. And his kids, who were involved in the business said, you know, we want to make these decisions while you’re still alive, and where you can make those decisions. We don’t want you to kick that down a generation to us. And we want a permanent answer to the question, too. But what we knew is we had to solve for two things. Yvon wanted to put much more resources against fighting the environmental crisis. And we needed a solution for the next 50 years of Patagonia stewardship. The company is in its 49th year, just about to be in its 50th year. And it turns out, that’s hard. You know, we looked at Yvon to do it, and I ignored him for six months. And then he said, If you don’t do it, I’m gonna call Goldman Sachs, and of course he didn’t mean that. But the funny thing is, we looked at going public, using a direct listing with dual class shares, and only selling a small portion; we looked at selling part of the company to permanent capital style of private equity, you know, their B Corp, private equity firms that claim to be permanent capital; we looked at partnering with big family offices that say they do the same thing. And we tested each one of those kinds of solutions against, you know, very explicit criteria, but also the family’s gut. And each time, you know, they felt like, “Ah, that’s the first step down a path of starting to make compromises about who you are.” And particularly public company approaches, you know, Yvon never got comfortable that we wouldn’t end up, you know, chasing shareholder capitalism. At 83, now 84, there was no way he was going to do that. You know, as you know, a foundation can’t own a company in the United States. A c3 can’t own a company. You have to start divesting within five years. And there’s one little exception called the Newman’s Own exception, which we won’t talk about. This is a fashion show, after all. But there’s a super narrow exception to that. And it’s not relevant. In Europe, and in Canada, foundations can own companies. And c4’s are interesting structures, imperfect structures. For one, there’s no tax deduction when you give to a c4. Fortunately, this is a family that didn’t care about the tax deduction, and hadn’t been taking big income to count against the tax deduction. So they didn’t care about that. And it was the combination of the c4 and the Purpose Trust, which is an unusual, another unusual structure that doesn’t exist in every state, that was the eureka moment. And I have to give credit where credit’s due; we met this guy called Dan Mosley, who used to work at Cravath, a big Wall Street law firm. He’s an attorney in trusts and estates for 30 years. Just the most downhome, wonderful Alabama guy who figured out the structure that no one had done before. And we’d been playing with c4’s. One of my colleagues, Greg Curtis, who ran the project, had been playing with c4’s, but we couldn’t figure out how to get around some of the government’s wrinkles with c4’s.

CB: The eureka moment– did he, like, squirrel away and figure this all out and then say, okay, let’s have a board meeting and present it to you?

CC: We were, you know, we kind of felt stuck. And I called an old friend of mine, who had been an investor in one of my earlier businesses, and I said, hey, we’re stuck. You know, we’ve got this set of problems. And he said, have you talked to Dan Mosley? And I said, no, who’s Dan Mosley? And that was in some ways the luckiest call that I’ve made because we got to meet this wonderfully creative and thoughtful guy who really wanted… it’s rare people actually listen, right? He wanted… he understood what Yvon and Melinda and the family wanted to do, and he figured out a legal approach to doing it that worked.

RK: Do you know if he thought about it before? Or is it something that he had come up with for you?

CC: I think he thought about elements of it before, but never how they would fit together in this particular way. Because it’s a rare thing for someone to say, hey, we want to give away our entire company. Most wealthy people, you know, say, well, for example, they’ll sign up for the billionaire’s pledge, you know, we’ll give away half. And what Yvon said was, “Half? That’s not enough. That’s not enough, we’re fine.” You know, these are remarkable folks. They live in the same house they’ve lived in for decades. You know, they wear ratty old clothes, they drive secondhand cars, he doesn’t even have a mobile phone. So these are folks who don’t need, you know, yachts or airplanes. And they were happy giving it all away.

SKP: So Yvon and the leadership team and the board have been wonderful about protecting Patagonia’s values, and I’m sure it comes up every single day, every single hour in terms of business decisions that you could or could not make. And can you share a little bit more about the other options you all ultimately rejected in terms of going public, being sold to an acquirer– what were some of the business decisions that you were worried about would be made in those types of situations that could now be protected?

CC: Yeah, well, the obvious ones are, you know, there’s only a limited number of levers you can pull in any business, right? You can cut costs, you can grow faster, you can increase your price, you can invest less or invest more, right? And when you have a private equity mentality, usually the levers you pull are “grow faster, cut costs, increase your price.” And those were pressures that Yvon and his family wisely realized, you can get dual class structure you can protect yourself by voting rights… but, boy, once you drink that Kool Aid or that, you know, take that pill, the red pill or the blue pill, then you’re inevitably living in that matrix. I’ve lived in that matrix. Of course, I just have so much admiration for that courage to say no. You know, the folks who peddle those things– and we had, you know, everyone was coming with their SPAC, remember? That was 2020. Everyone had a SPAC, and I won’t even tell you all the names of the people who came to us with SPAC’s, you know, famous athletes and, boy, it is heady stuff. When you have a brand like Patagonia, everybody wants to work with you. These people, they know what true north is. Right? The family. They know what true north is. 

CB: It’s remarkable that his children were on board for that. That was one of my first thoughts when I saw that news.

CC: Yeah, well, they’re really allergic to, you know, all the trappings that come along with attention and wealth and fame. And you know, that’s not what they wanted. They’re the very same cloth that their parents are.

SKP: To whatever extent you can share, more about the mechanics of how the trust works. So there’s a Patagonia Purpose Trust, and there’s also the Holdfast Collective. Are there any details you can share about exactly how that all works?

CC: Sure. I mean, it’s actually pretty straightforward. The voting shares are held by the Purpose Trust, and that is our shareholder that has a board, and Patagonia is still a for-profit company. Patagonia has a board. Those board members are the same board members that were before the decision. Only we now serve at the pleasure of the Purpose Trust rather than the family.

CB: Who are the deciders that the Purpose Trust?

CC: The Purpose Trust has got a set of trustees, including family members, but also including other people they trust. The cash flows of the business after the board of the business has made decisions about how much we need to reinvest in the business to make sure that it exists in perpetuity– those cash flows after and necessary investments go to the Holdfast Collective. And the Holdfast Collective makes decisions about how to invest in, you know, fighting climate change and biodiversity and loss of biodiversity.

CB: Will there be public reporting on what they’re doing? Will we get to follow that?

CC: Yeah, there’s also a new foundation, a c3, called the Home Planet Fund. And we will report on the activities of all of those entities.

RK: It’s probably as much of an experiment that’s unfolding before your eyes as it is the public’s, and knowing how Patagonia sort of operates and the transparency at which the company operates, I imagine the company is excited to sort of report how this unfolds. You mentioned something in your fortune article where you said Chick-fil-A and Patagonia were named as top companies based on product quality, trust and ethics. They do make a good sandwich. But I love that comparison. And, and then in inks article, it was mentioned that Yvon had agonized a bit at whether this would work, and what the future would be if it didn’t, and what that would look like for Patagonia. But we’ve also seen, you know, people on the other side sort of launch similar models. So if it’s successful, what would that look like? What would the world look like where there are a lot of different models, representing, maybe, forces that oppose your own ideas having equally successful, you know, new governance structures?

CC: Yeah, I think that’s a really insightful question, Rachel. I think it’s a hard one. We wish that all companies would pick the purpose that we think is the most important one. But you can’t legislate that. No one thinks of it as fascism, when it’s their idea, but fascism is fascism. 

SKP: That’s a great bumper sticker.

CC: Yeah. Right! We should remember that, actually. We believe that companies should stand for something. And we believe that they should be clear about their purpose, and we believe the world would be a better place. We don’t think shareholders will be confused, you know, that Wall Street Journal, for whom you work occasionally, has published op-eds that said, “Shareholders will be so confused!” They’re not dumb. They’re super smart. They already look at hundreds of factors, including the personality of the CEO and the past record of the CFO. Investors are used to looking at companies and understanding what they’re about. That companies should be clear about all elements of what they’re about. Being a benefit corporation, you declare what that is. You have a public plan for what those goals are. We think that’s a really good idea. We don’t think we can impose on everybody what their purpose should be. And that’s why I deliberately picked Chick-fil-A, and I’ve never had their sandwich, but I hear it’s good. They stand for something different from what Patagonia stands for– not something that I believe in, but I am for them standing for something. And I don’t– I don’t think that’s going to create a ridiculous anarchy. I think what it’ll mean is, companies will think about what they mean to stand for, and investors will invest in what they think will create long term value. I’ve got a feeling that the best way to create long term value is to treat the communities that you live in with respect, to treat your workers with respect, and to give them a fair share of the benefits created by a company, and to treat the environment as if we have to live in it forever, because we do. So I’ve got a feeling that the values that we think are important will ultimately create longer term value for investors, too. 

CB: Well, I think it’s paid off. Yvon became an accidental billionaire, apparently, from doing this pretty well. So that’s unusual on its face, but you just were at the British Fashion Awards. They’re called the Fashion Awards now, they’ve taken the British out of it. But that is extremely unusual. You’re an outdoor wear company. The Fashion Awards generally focus on Gucci, Balenciaga… it’s luxury fashion. And they have recognized Patagonia and given you an award, which is a little mind-bending for me to see it happening. I don’t know what it was like for you to be there. I mean, tell us, actually. And what did you wear?

CC: Well, look. Of course, being Patagonia, we had to wear something that was already in our closet. Right? So, I had a job in Oxford where I had to wear black tie, so I pulled out an old jacket from the closet. Look, it was a weird place to be. And obviously we thought hard about whether it was the right place for us to be. And I said to everybody up on the stage, this is not my normal habitat. We are not a fashion company. And we’re pretty close to being an anti-fashion company. We think we should buy clothes that have enduring value. But I also remembered the William Morris quote, which is, “Have nothing in your house you don’t know to be useful, and believe to be beautiful.” That form and function, beauty and functionality can coexist, and in fact, probably must coexist. Because if your closet is going to have a small number of things that you really love, and believe in, those should be things that you know where they came from, you know how they were made, and they should also give you pleasure and make you feel like you look good. It’s okay. And so we made the decision– we’ll go. We’ll go because the chance… in that audience, I mean, you know, you guys said it in your own website. The apparel industry worldwide is about 10% of global emissions. If you can speak to folks who make fashion where they live, and that’s where they live, then maybe we can move the dial a little bit. And when you listen to the young, you know, Camilla, my wife and I sat there and we, we listened to all the younger designers getting awards, all of them spoke about sustainability and sourcing and supply chains. It’s happening. It’s happening. And that’s incredibly exciting to us. And so yes, it’s not our natural habitat. And also, yes, we should stand shoulder to shoulder with strange bedfellows and try and make it better. And, you know, my final line was, if Yvon was here, he’d say good stuff. And he’d say, we can do better. Right? And so, you know, let’s all have a good time, and then let’s wake up tomorrow and do better. And that’s a chance to influence a big group of people. And so we took the chance.

SKP: Charles, you’ve talked a lot about the tensions of living in a capitalist society and economy and the pressures it produces, and I love how, you know, Patagonia has thought about its role within that society and structure and of course, that famous “Don’t Buy This Jacket” campaign. And there is a perpetual tension between growth, as we’ve talked about, and, honestly, you know, some of the answer is probably going to be, we have to probably consume less and produce less just across the board. And how do you think about that tension?

CC: So first, Shilla, I think we have to acknowledge that we need to consume less. And we need to consume more sole goods, we need to consume things that don’t hurt the planet. So, you know, time you spend with your family or friends, or doing yoga or, you know, running through the forest glades, whatever turns you on, that doesn’t, isn’t consumptive. We need to spend more time in those things, spiritual things, and I don’t mean in any religious sense. Patagonia, for a long time, had great suspicion about growth. And it was hard for me when I first started working with the company. It’s so built into you to think that, you know, growth is the indication that you’re doing something good. Whenever we grew, you know, faster than kind of a modest amount, the family members would say, like, “What– how did we do that?” We say, “What do you mean? I mean, we sold more stuff.” Now, did we do it by filling wholesale channels full of stuff? Or did we do it by demand poll? People who really needed that jacket, choosing us over another brand? 

CB: How do you identify that? 

CC: It’s hard. I mean, you know, you can look at brand share gains. And that’s one of the things we always look at. We are fiercely competitive. We want to make a better jacket than the North Face. I mean, let’s be honest. But what we don’t want is for you to buy three jackets; one in powder blue, one in pink, and one in whatever. I mean, that’s destructive. All of us, including Patagonia, need to choose less growth. And we need to ask our customers to pick wisely. I think that’ll have to be the future if we want a planet that’s worth living on.

RK: This announcement spread, you know, far and wide. And I had conversations with people who I normally probably wouldn’t have spoken to about these things outside of professional settings, because of Patagonia’s announcement. And the widespread feedback I got was, oh, I’m going to buy Patagonia now. I am going to buy Patagonia for my children. I’m all in on Patagonia. So have you had sales increase?

SKP: Oh, just quickly, I also heard, “I now want to work at Patagonia.” 

CC: Well, we obviously didn’t make this decision to give everything away. The Chouinards didn’t make that decision in order to sell more stuff. But, you know, Yvon has always said, doing the right thing is good for business. It’s not always good for business in the short term, but it’s always good for business in the long term. And he also says, in his grumpy way, you can’t do any business on a dead planet. And so we hope that people will buy their jacket from Patagonia instead of somebody else, but we don’t want you to buy two of them if you don’t need them. So we’d love it if you bought ours because we know where ours comes from. And, you know, ESG has come under appropriate criticism and also inappropriate criticism, because it’s very hard to give an index for a giant company. You know, “How are you doing? Oh, we’ll give you three numbers.” Well, that’s ridiculous. We work at that at the product level. So, we can tell you whether a black hole is better or worse than a fleece jacket. And we know exactly how much water that uses, how much carbon it’s involved in emitting, we know whether the chemistries that are involved in creating the product are dangerous. We know if the fibers were regenerative organic or beyond organic.

CB: Is that true all the way through scope three?

CC: Everything. 

CB: Okay. So you’ve done it.

CC: So, we’ve done it. We’ve just done it. And I’ll be honest also, which is, we’ve done it three times over the last 15 years, each time getting better, each time going deeper. Now we can do it at the product level because of the incredible technical team that works for Patagonia. It costs more. Not only does it cost more to do that better, but it costs more to know that. Sometimes it costs more to buy something that’s done right. And we think that’s okay, especially if you can own it for a long time. Most of us still have Patagonia stuff we bought 10, or 15, or 20 years ago. I do. You don’t have to throw that stuff away. And, you know, partly because we don’t chase fashion, or trends. A wonderful black raincoat’s likely to be pretty damn good looking 10 years from now, too. It’s unlikely to have a color way, or a pattern, or a texture, that doesn’t work in the future. And that’s deliberate.

CB: You know, that’s actually… if you had a group of young fashion label founders in front of you, every one of them wanting to build a successful company, what specifically would you advise them to do to get to where you are? So they’re starting out. The fashion industry is full of people starting brands in their living rooms.

CC: There’s so many great ones. And I think so many of these folks– and it’s, Rachel, it speaks to your challenge earlier, which is, that generation is so much more dialed in. I think that they’re already thinking this way. And I’m seeing less sort of fashion frippery. And I, you know, boy, don’t listen to me on this stuff. I don’t even know what I’m talking about. But I’m seeing people focus on what I’ll call style, which I think is a much more enduring thing than fashion, which almost by nature feels like it’s ephemeral. Can’t we build stuff in our closet that we feel really good about and we feel we look good in? Can’t we find William Morris’s sweet spot where we have great foundational stuff that we put together in new ways, with new splashes of color? And yeah, I mean, we do, you know, stuff wears out, so you do get to buy some new stuff. But hopefully, we can do that in a way that, you know, actually works. But we shouldn’t, you know, I guess we’re not supposed to name names. But you know, there are fast fashion retailers on the high street, or on the main street, you know, where they’re doing 55 drops a year, right? They’re chasing a particular demographic, it doesn’t have a lot of money. And they’re selling them stuff that cost 20 bucks or less, and is worn less. You know the stats, you guys quote the stats. Nowadays, people buy 40 garments a year. They’re worn less than seven times. Are you kidding me? That can’t be the future, right? And all that stuff ends up in landfills, or it ends up being shipped to other people’s countries, where we oppress them with our crap. Do we feel good about that? I hope we don’t.

CB: It’s also mind-bending that none of us feel good about it, and yet…

RK: It’s still happening right this minute.

CC: It’s a system.

RK: Your CEO, Ryan Geller, said, in an article recently, “I think what the Chouinards have committed to doing is one of the biggest moments in the history of capitalism.” And I definitely agree. If you have the ability to peer into the future, or to share about what the future might look like, are there other innovations, either in model or product, that is on the minds of the folks at Patagonia? Is it leaning into some of the other models like resale and repair, which I know you are already doing? Any hints about what the future may hold that you’re able to share?

CC: Well, sure. I mean, you know, and I can’t see the future any clearer than you guys. You guys are in the see the future business, right? All of you, individually and collectively. Obviously, we need a circular and regenerative economy in everything that we do; in the food that we eat, in the apparel that we wear, and in every other way. Our future is going to be based there. And so how we design our garments, they have to be designed to be taken apart. And there was a whole period where we found some really cool technologies that weld together different types of fabrics. And those are cool technologies, you know, “No seams!” But a lot of that stuff was very hard to take apart at the end, right? And there’s stuff that fails on everything. You guys know what it is: it’s zippers, right? And we need to be able to construct our jackets so that they can be taken apart and recycled– first so that they can be repaired, so you can take that zipper out cheaply, right? And then put it in a new zipper. And then when you’re really at the end of a garment’s life, can we patch it up some and sell it to somebody else? Or when it’s really really at the end of its life, how can we be sure that every element of that can be recycled into a new garment? That has to be our future. I do think we’re also moving toward fabrics and approaches that will be genuinely more multi-use. So, you know, today, high mountain alpine is an incredibly dangerous environment to be in. And it’s probably different from an LA rainstorm. But is there a way that we could design garments that could actually serve both of those purposes? And so we can have fewer items? And we’re constantly looking for ways to cut items. And so, some of our competitors, if you go onto the websites, it’s actually bewildering– they’ll have 700 different jackets. We don’t want 700 different jackets. We’re constantly focused on reducing SKU count. And that feels terrible, right? Because, you know, some of these SKUs are your friends.

CB: There’s actually a whole movement in sociology, the paradox of choice. Are you familiar with that?

CC: I am. 100%.

CB: I think that may be why you’ve created accidental billionaires, because it actually is easier for consumers to make decisions when they have fewer choices, right?

CC: Yeah, that’s exactly right. And, you know, and I’m sure there’s no one more happy than him to say he’s no longer an accidental billionaire.

CC: I remember the first time that he was listed on one of those lists. And he said to me, “Charles, I’ve never known a billionaire that wasn’t an a******.”

CB: This has been fantastic. Thank you so much for joining us. And Shilla, thank you so much for hounding him until he came on. 

SKP: Charles, thank you for saying yes. That was very generous of you. 

CC: It was super fun. I love talking about this stuff. And, you know, I hope that we all work and create that future world that we want to live in.

CB: Thank you very much for joining us.

CC: Good to see you. I really enjoyed it.

CB: So that was crazy. He seems to be speaking wisdom that would be an anathema on Wall Street. It seems like all the decisions they make and how they run their company are exactly the opposite of what they teach in business school. And yet, it’s Patagonia. We know what that brand is, right?

SKP: It’s incredible. I mean, I hope… clearly everything they do is to serve as a model for others. And I feel like them making these moves is significant. And I hope, and it sounds like Charles is hopeful that others will follow their path. I’m not so sure whether others will, but it’s a great model. 

CB: It is a great model.

SKP: To show that there’s another way.

RK: I also think that it’s a model to serve by example to others, but it’s also a model that they’re leveraging their guts. He mentioned how much noise there is around a brand as popular as Patagonia, and how much influence that they have to reflect on from celebrities, from Wall Street itself, and then go internally inside the family and listen to their guts and have their North Star and commit to it. And I think there’s something to be said about that.

CB: Yeah, and, you know, there’s kind of two models. Maybe everybody isn’t going to follow the “give away your company” model. But how about the other part of their model, which is make really good stuff that people want and stop having your North Star be 12% growth every quarter?

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