With the deepening climate crisis, more and more companies and influential leaders are publicly questioning the current, outdated economic models. Returns to shareholders can no longer justify the business. This model has already expired. Enterprises are an integral part of our society, and therefore they are responsible for caring for and influencing it. Any business that is not responsible is inherently destructive. Yannick hopes that “responsible companies” will one day be seen as conventional. He will answer what is the role of business in society? What is responsible business? Why should we talk about responsibility instead of sustainable development? What does it mean to be an activist?
Patagonia is an international examples as a responsible business model. How in your opinion navigate business to use this example in a good way?
It starts with understanding your accountability as a company. The current business landscape operates according to an outdated economic model. Companies are held accountable for the value they create to their stockholders but are not held accountable for the impact they have on other stakeholders. That needs to change. Being in business means you have an impact on society, your employees, your supply chain, local communities and nature – in one way or another. That means any business should be held accountable for their impact on all those stakeholders. Our mission statement is ‘We’re in business to save our home planet’, therefore all functions, departments and business channels are operating towards that goal. We do not exist to create value for our stockholder, we exist to meaningfully contribute to the health our planet.
How to introduce sustainable methods (responsible) of production to the business “done the old way”? How can we help them to understand the value behind it?
This really is about bold leadership. Pivoting your business to do the right thing, for example; how we are shifting from organic cotton to regenerative organic cotton, requires long-term thinking. Often making such steps means you will navigate your business into unknown territory, which in turn means there is some risk involved, and when risk is involved, stockholders are often not keen to see their investment put into ‘jeopardy’. Unfortunately, long-term thinking for many businesses is constrained by the need to publish quarterly reports for stockholders. Short-term results still dominate long-term results. To introduce responsible methods of production, companies need commitment, a clear strategy and acceptance that the return might only come in the long run. I think a great example of long-term thinking is the evolution of Royal DSM – a company that started as a mining business in 1902, now is a leading firm in nutrition, health and sustainable living!
What non-outdoor and non-clothing companies can learn from Patagonia’s approach?
Essentially our way of working is something that can be applied in any industry – to implement a business strategy that prioritizes taking care of the planet we depend on. In no way are we saying we are perfect, in fact, we are part of the problem. That acknowledgement is key to transition to a more responsible business model. You can only start if you understand where you are starting from. Any process starts with fundamentally understanding where you are, where you want to go and how you want to go there. What businesses can learn from Patagonia is that we put a lot of effort and investment into deeply understanding our supply chain, defining where our impact comes from, and then take responsibility to minimize that impact.
How can we translate the main aspects of Patagonia - human & environment into the business world?
As a business, the only way to get tangible output on social and environmental objectives, is to make them key stakeholders of your value proposition. This can come in any form – as long as the sole objective is not to generate wealth for your stockholders. Ironically, this will be profitable too. This is because your business will build deeper relationships with the customers and communities you depend on.
Where Patagonia (as the industry leader) gets its inspiration from?
The people working at Patagonia are inspired by any organization or individual that is putting in the work to make our planet a better place. All the outdoor enthusiasts working at Patagonia realize that without nature, we cannot do what we love, in the places we love. Nothing is more inspiring to see people across the world putting in their skills, time and passion to protect our planet.
