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PATAGONIA INC. AN EXCELLENT CSR EXAMPLE

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                   Caso de éxito eCommerce: la historia de Patagonia – Blog Oleoshop

In this post we are going to find out how Patagonia, a United States sport clothing company, has a large number of consumers due to their well thought-out and traditional Corporate Social Responsibility. Their activism environment defense is their most important competitive advantage in the market. 

According to the University of Zaragoza the Corporate Social Responsibility of a company (from now on CSR) is «a way of running the company based on the management of the impacts that its activity generates on its stakeholders». The firms invest a huge amount of money creating programs whose main goal is the protection of the environment, the integrity of people as workers and citizens, education, other relevant social facets and so on. But… Why do they do this? Does it have some economic benefit for the company? Or is it simply philanthropy? 

Patagonia was founded in 1973 by Yvon Chouinard. Currently, the head offices are in Ventura, California, United States. The company’s worth is 3000 million US$ and its profits reach 100 million USD annually (Oriol Torrelles, 2022).

  Patagonia, cada dólar que no se reinvierta en la marca se repartirá como dividendo para proteger el planeta | Marca

Imagen  1: Yvon chouinard, Patagonia founder

Patagonia's CSR is based on sustainability and environmental protection. In fact, the first you see on Patagonia’s website is «we are in business to save our home planet». They do several actions in order to convince the client of this. The firm announced in 1985 that it would donate 1% of net revenues to environmental nonprofits organizations. A few years later the 1% for the planet foundation was created by the owners of Patagonia. The aim of this new NGO was that other companies emulated Patagonia’s behavior in relation to the 1% net revenue donation.

Since 1985 the value of its donations has reached 116 million USD. Furthermore, the company has recently given 10 million $ more. This is because during Trump’s administration the firm saved this amount due to tax cuts made by the United States Government. 

Also, in these years the firm has donated more than 6,4 million dollars in grants made to groups working to protect lands and waters, advance renewable energy regenerative organic agriculture and help more farmers implement practices to improve soil health».

The Patagonia CSR is not only associated with money donation, but also the company tries to be as eco-friendly as possible in their day-to-day performance. According to this, some significant goals were established. These objectives are summed up in one main: to be a carbon neutral company in 2025. This means delete the carbon foot-print and also using renewable energy in the production process, logistic, warehouses, offices, shops, delivery… Besides, raw materials will be recycled. 

Although the main focus of the Patagonia CSR program is the environment, the company works as well in other aspects, for instance: providing the best staff atmosphere (maternity and paternity leaves, three-day weekends, retirement conditions and so on), transparency and outcoming relations with other companies. 

Imagen 2: Don't buy this jacket is one of the most recognition and memorable communication campaign the company ever did

Thanks to all these performances (in order to the CSR project) Patagonia has obtained thousands of devoted clients who act as fanatics of the brand. The success of this business has been that the consumer related the brand with a social cause they identify themselves with. Moreover, this kind of consumer is willing to spend more money. 

Recently the world has known that «Patagonia founder Yvon Chouinard […] is giving the entire company to a uniquely structured trust and non-profit, designed to pump all of the company’s profits into saving the planet» (Erin McCornick, 2022). This makes us think that truly Yvon is a philanthropic person. This is what The New York Times said about it: «The unusual move comes at a moment of growing scrutiny for billionaires and corporations, whose rhetoric about making the word a better place is often overshadowed by their contributions to the very problems they claim to want to solve» (Guelles, 2022). 

Nonetheless there are many companies that run a beneficial and powerful CSR program. In fact, this was until recently Patagonia’s performance. A company doesn’t have to choose between earning profits and giving money to benefic causes. It could perfectly do both things at the same time, de facto, giving money could mean earning more profits the next year. 

This summary appears in Santander Bank’s (the 4th most important bank in Europe*) corporate website: «Companies no longer seek only to create a positive image in society, but also to generate trust between customers and employees and foster a feeling of belonging». This makes some positive consequences:

  • The CSR supports the recruitment and retention of employee talent.

  • It facilitates the collaboration between firms. The CSR could be the differentiating factor in a negotiation in which a company has to choose between multiple companies. 

  • A better customer loyalty. (If you want more information about this aspect, you can consult this link. Advise: the information is in Spanish).

  • It helps to find more consumers. According to Elena Bello in her article Corporate Social Responsibility: What is it and how does it benefit your company? (2022) «Nearly 90% of the consumers say they are more likely to buy from a company that supports and participates in activities to improve society than one that does not». In fact, this is the Patagonia case. There is cheaper sportswear than Patagonia´s one, nevertheless, thousands of people spend more money in it because the company has a CSR program.

All in all, the companies, as Patagonia, are benefited in economical and corporate terms if they carry on a powerful Corporate Social Responsibility program. Not only is the company benefited, but also the society is the first one in getting advantages. Therefore, it is a win-win situation. Why don’t you run a relevant CSR project in your organization?  

*4th most important bank in Europe by volume of total assets. According to Rosa Fernandez (2020) in https://es.statista.com/estadisticas/567880/bancos-mas-grandes-en-europa-segun-volumen-de-activos-totales/ 

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Comentarios

Unknown ha dicho que…
In my opinion, I think it is very important for companies to have CSR because it is very positive for their image and for society, since in this way they are supporting the improvement of some aspect of society.
It seems to me very interesting and appropriate this choice of company because if we are thinking about examples of companies with CSR one of the clearest is Patagonia as the whole brand revolves around that and is something very positive for the planet and helps a lot with the environment as textile companies are very harmful to the planet.
6 de octubre de 2022, 16:19
Unknown ha dicho que…
I think that the CRS is necessary and creates a good image for the brand, the good thing about this is that you can make your values known and focus them with certain actions, and thus get closer to your target and get to know you better so that you can then do your actions.
The CRS must be fulfilled as long as it is accompanied by your brand values and your actions, if not I think that companies or brands can make a big mistake and lose a lot of prestige.
In the case of Patagonia, I believe that the brand does the CRS well because it carries out actions that go hand in hand with the brand values and creates a greater closeness and reliability to its customers.

6 de octubre de 2022, 17:06
Anónimo ha dicho que…
I really liked this post and the personality of the Patagonia brand. A company's CSR is very important, as it projects a positive image in the consumer's mind, either by taking care of the workers or by promoting initiatives with the aim of helping the planet, as is the case of Patagonia. I find it very interesting that the objective they are pursuing by creating this business is to save the planet. With this they can create a very positive image and get a number of sales thanks to this, as the issue of care and protection of the environment is more and more present in our society.
20 de noviembre de 2022, 23:24
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