For a little more than half a century, Patagonia has pitched itself as an experiment in a kinder form of capitalism.
The outerwear brand founded by rock climber and environmentalist Yvon Chouinard — possibly the world’s crunchiest billionaire — has played a central role in modelling the idea that businesses can balance profit and purpose.
The company’s activism started out focused on conservation of the wild places its employees and customers used its gear to explore. It’s donated 1 percent of all sales to environmental causes since 1985, helping to spearhead a movement that now covers more than 4,000 businesses. In 2018, the brand changed its official mission statement to being “in business to save our home planet.” Four years later, Chouinard gave away his family’s holding to a new owner: Planet Earth.
But on Thursday, Patagonia did something it’s surprisingly never done before. It published a progress report chronicling of its sustainability efforts to date and the impact they’ve had. The report is intended to serve as an internal stock-take as well as a playbook for other brands looking to tackle the industry’s complex environmental and social challenges, the company said.
The climate and nature crisis is worsening, and the truth is being lost in a sea of lies and misinformation. I feel an even deeper responsibility to help the company succeed and provide a counter to the prevailing extractive model of capitalism. It has never felt more difficult.
— Patagonia founder, Yvon Chouinard
The picture it paints is mixed.
Despite its position as a climate champion, the privately held company’s reporting has lagged public rivals, who have provided regular updates on their targets and progress for years. (The brand said it has been more focused on action than storytelling). Still, while Patagonia’s hefty investments have helped protect millions of acres of land, it’s had more limited success delivering on efforts to curb its own impact, with strides forward tempered by tough structural hurdles.
Meanwhile, an increasingly challenging economic and political environment is eroding support for the model of climate-conscious capitalism Patagonia has spent decades championing.
“We’re at a bit of a fork in the road right now,” CEO Ryan Gellert said over a video call from his office in Ventura, California. “The state of the world today is radically different [and] in many ways worse than we had feared.”
The 87-year-old Chouinard gave an even grimmer assessment in his opening remarks to the company’s newly published report.
“The climate and nature crisis is worsening, and the truth is being lost in a sea of lies and misinformation,” Chouinard wrote. “I feel an even deeper responsibility to help the company succeed and provide a counter to the prevailing extractive model of capitalism. It has never felt more difficult.”
The Patagonia Paradox
Patagonia makes no claims that it’s perfect. In fact, its progress report starts with a disclaimer: “Nothing we do is sustainable.”
It’s an acknowledgement that the brand’s climate balance sheet is in the red. Like pretty much every other company, its impacts are greater than its efforts to remediate them.
While the brand has vocally opposed oil pipelines and cut ties with banks that fund them, its products are still largely made from fossil-fuel-based plastic (albeit mostly recycled). Its absolute greenhouse gas emissions have continued to grow, despite a pledge to slash them by 2030. A big push on organic cotton has transformed the company’s own supply chain, but done little to change the wider industry.
Progress towards a suite of targets set in 2015 for delivery this year shows real change, but skews more towards lessons learned than goals achieved. In some cases, the targets themselves have shifted to become more ambitious as broader thinking on best practice evolves.
“This is nuanced and it’s complicated,” said Corley Kenna, Patagonia’s chief impact and communications officer. “People who are saying they’re nailing it and getting A pluses, they’re probably not trying hard enough.”
The company still has plenty of contradictions to work through. For instance, it runs the largest repair centre in North America, but has no end-of-life solution for the bulk of its products. Many of the factories it works with still run on coal, the world’s dirtiest fossil fuel. Addressing these challenges are pressing priorities for the future.
“This is nuanced and it’s complicated. People who are saying they’re nailing it and getting A pluses, they’re probably not trying hard enough.”
— Patagonia chief impact and communications officer, Corley Kenna
“Product end of life to me is like one of those holy grail issues for an apparel company,” said Gellert. “That’s one of those game changers if we can crack the code on that.”
It’s a gnarly technical and structural challenge. Increasingly sophisticated technologies exist to recycle old clothes back into usable raw materials, but they’ve yet to achieve industrial scale. Big investments are needed to build out the infrastructure to collect and sort discards from closet cleanouts into usable feedstock, too.
After years of work, Patagonia gets back less than 1 percent of the products it’s ever made for recycling. Most of those returns simply aren’t recyclable at the moment and are sitting in storage in Reno, Nevada and other locations in Europe and Japan. Long-standing repair and resale services, intended to keep products in circulation for as long as possible, remain a fractional part of the business. Secondhand sales made up less than 1 percent of the company’s total revenue in its last fiscal year.
Decarbonising Patagonia’s supply chain is even more complicated. The company doesn’t own the factories it works with and as one small customer among many, it has limited leverage to push for change. Much of the work relies on decisions that will be made at national and municipal levels about grid infrastructure and energy policy. The brand has been exploring a variety of solutions, including creative financing models that would treat supply-chain emission reductions as investible assets that could unlock more financing from brands.
“It’s pretty thankless work, candidly,” said Gellert. “It’s super time consuming and super expensive, and it’s the unsexiest thing in the world.”
‘It Has Never Felt More Difficult’
When Gellert took over as CEO of Patagonia in 2020, he faced myriad challenges. The world was in the teeth of the pandemic, a global crisis that whipsawed demand and supply, snarled supply chains and created a profoundly uncertain business environment. But the philosophy Patagonia was built on felt ascendant.
More companies were embracing the idea that they had a role to play in shaping cultural narratives that pushed forward climate action and addressed social injustice, with many seeing these topics as fresh marketing opportunities. Consumers seemed to want businesses to play the role and policymakers were looking at ways to incentivise investments in cleaner energy and penalise companies that operated irresponsibly.
The cultural shift, I think has been led by politics, but it’s almost sort of bled into culture now that this stuff’s just not cool or interesting and that, you know, the climate crisis isn’t a problem anymore.
— Patagonia CEO, Ryan Gellert
Fast forward five years, and the vibe shift is profound. Successive greenwashing scandals have left consumers increasingly skeptical of eco-marketing claims and responsible business promises. The second Trump administration has also helped usher in a backlash against so-called “woke” capitalism, not only rolling back environmental protections in the US, but also using trade negotiations to pressure governments elsewhere into a retreat on sustainability regulation.
“It felt like customers and employees were applying pressure to businesses to clean up their mess, and so you had this cultural tailwind. I don’t feel that right now,” said Gellert. “The cultural shift, I think has been led by politics, but it’s almost sort of bled into culture now that this stuff’s just not cool or interesting and that, you know, the climate crisis isn’t a problem anymore.”
Companies, Patagonia included, have had a lot else to deal with. Shoppers, who spent big when they were stuck at home during the pandemic, have been more cautious in the years since, amid rising inflation and mounting economic uncertainty that have dampened industry earnings. Patagonia embarked on a major restructuring last year, cutting dozens of jobs and introducing internal changes that were described at the time as critical to the company’s near-term success. This year has brought fresh challenges in the form of Trump’s trade war.
Nonetheless, Patagonia’s business has remained relatively steady, with sales of $1.47 billion in the company’s 2025 fiscal year. But it’s been cautious about meting out dividends to support its new shareholder, Planet Earth. Holdfast Collective, the nonprofit organisation that now owns most of the company, received $180 million between its establishment in 2022 and the end of the company’s last financial year, well below the $100 million a year many media outlets reported it was expected to receive.
“Our number one goal is running this business and ensuring that we can be around for 100 years as a vibrant business, not a dusty business, as an additive business, not an extractive business,” said Gellert. “Then the profits go out, in that order.” The company never had a target to distribute a certain amount of funds each year, he added. “This $100 million a year thing kind of took on a life of its own… that’s not our number.”
Most of the money Holdfast has received to date has been spent on conservation and land protection. But elsewhere, the company acknowledges it needs new strategies to drive the kinds of change it’s been campaigning for for decades.
For all the work we’ve done on our products and in our supply chain, and all the money we’ve given away to environmental nonprofits, it is still not enough.
— Patagonia founder, Yvon Chouinard
“We dedicated our business to saving the planet, but policy now openly benefits those who succeed by exploiting it. We are seeing what happens when extractive capitalism becomes government doctrine,” Chouinard wrote in his introduction to Patagonia’s progress report. “For all the work we’ve done on our products and in our supply chain, and all the money we’ve given away to environmental nonprofits, it is still not enough.”
Part of the purpose of Patagonia’s progress report is to share the lessons it’s learned with other companies. The brand once viewed its leadership on climate as a competitive advantage; now it recognises nothing will change if it acts alone. It’s come out in support of state-level bills in New York and California that would drive tougher regulation of the fashion industry’s environmental and social impacts. It’s pushing for new coalitions to drive more action, and it’s looking for fresh strategies to meet the current moment.
“We’ve got to stay super light on our feet and continue to respond and react,” said Gellert. Whether that’s enough, or even makes a difference, when the world is already staring down the reality of the climate crisis is something he gets asked a lot.
“I very respectfully think it’s a little bit of a false question,” Gellert said. “Are we winning? No. Does it make a difference? Absolutely.”