Patagonia CEO: A Force for Environmental Change

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“We can have a regenerative economy.” Rose Marcario, CEO of Patagonia, said at View from the Top. “We’re going to have to have one. And the businesses that are working on it now will, I think, be the most successful.” | Stacy Geiken

Rose Marcario left the private equity world to lead Patagonia, the forward-thinking clothing retailer trying to save the planet with sustainable business practices and environmental activism. As CEO, she’s defied expectations by showing how a company can in fact have it all: profit, product quality, and environmental stewardship. “I think the foundation of the business is making a great product and then standing behind that product,” she says. “I don’t think that is in any way bifurcated from caring about our planet and our environment.”

At a Stanford Graduate School of Business View From The Top event in early February, where she was interviewed by Tara Hill, MBA ’20, Marcario discussed her professional choices and the foundational decisions that define a company’s culture and overriding mission.

Don’t Stick to a Path That Doesn’t Feel Authentic

Before joining Patagonia as COO and CFO in 2008, Marcario was the CFO of a public company and spent almost five years in private equity, a path she suspected wasn’t the right fit for her. “I could see that the buying and selling of companies made very few people rich,” she recalls, “and in most cases, hurt the actual workers and the people who had built the company.” While searching for a new direction, she met Yvon Chouinard, the founder of Patagonia, and was struck by his vision for the company. “Yvon had this model where he was basically saying you can have a great business, you can make quality product, but you can also do the right thing by the environment, by your employees, by your community,” she says. “That, to me, was the most holistic vision of business that I’d ever seen.”

A number of Marcario’s colleagues tried to discourage her from making such a drastic career change, but she knew that her experiences up to that point had prepared her well. “All of your life experience comes to bear in anything that you do,” she says. “It all gets incorporated if you’re a person who lives a holistic life.”

Profits and Purpose Are Not Mutually Exclusive

Patagonia has long distinguished itself through its commitment to environmentalism, but Marcario hopes that it won’t be a differentiator forever. “Everybody’s mission, every business’s mission, should be to save our home planet,” she stresses. “We need the rest of business to wake up and turn toward solutions and innovations and the things that will help us survive.” Step one, in Marcario’s view, is to relinquish the type of short-term thinking that pervades the business world. “Nothing important happens in a quarter. It’s such a weird system,” she says.

In response to those who argue that embracing long-term planning and sustainable business practices can hurt profits, Marcario’s track record has proven otherwise. During her seven-year tenure as CEO, she’s helped quadruple Patagonia’s annual revenue to reach over $1 billion — while doubling down on the company’s world-changing mission. “Business is changing, and we need different solutions,” Marcario says.

To that end, Patagonia has pledged to become carbon-neutral throughout its supply chains by 2025, sourcing only organic materials, continuing its policy to repair damaged products for customers, and recycling what can’t be repaired. Marcario believes that the businesses that will thrive tomorrow are those that innovate by adopting regenerative practices today. “To me, those are the businesses that will really make a difference,” she says. “We can have a regenerative economy. We’re going to have to have one. And the businesses that are working on it now will, I think, be the most successful.”

Cultivate a Supportive Culture

When she first arrived at Patagonia, Marcario was impressed that the company offers subsidized on-site childcare, which has translated to increased career success and lower turnover for female executives, managers, and employees. Having kids around also serves as a welcome and constant reminder to think long term, says Marcario. “I don’t want to think about what happened in a quarter. I want to look into the eyes of my employee’s child and say, ‘What’s going to happen in her lifetime?’”

Acting with intention and reflecting on what matters is encouraged at Patagonia, and Marcario credits its founder for creating a culture of living a “self-examined life” while at the same time remaining attuned to others. “We’ve become so polarized as a country in so many ways, and yet, there isn’t a whole lot of curiosity about why people are different or why they might have different views,” she says. In her capacity as a leader, she tries to model and promote both private reflection and interpersonal dialogue in moments of conflict.

Embrace Corporate Activism

Some companies are leery of taking a stand on political issues, fearing potential backlash or strain on their bottom line, but Marcario is proud that Patagonia’s corporate activism has grown into a cornerstone of its identity. She hopes their example will spur many more companies to take bold action on climate change. “These are issues that are our issues,” Marcario says. “If you’re business leaders, you can’t turn away from them and say, ‘I’m just going to go make a profit and forget about the fact that the planet is burning, or species are dying, or that there’s such gross inequity between the rich and the poor, that it’s not going to affect me.’”

She also hopes that Patagonia can continue serving as a bridge between consumers and environmental activism. In 2018, the company launched Patagonia Action Works, a digital platform that connects their community with grassroots organizations in the U.S. and across Europe. “A lot of our customers just want to know, ‘What can I do? Can I donate time? Should I donate money? What are the right NGOs?’ And so, we’re connecting them together, and it’s been really powerful.”