Our Business: Carbon Neutral by 2025 - Patagonia

Our Business
To eliminate or mitigate all of our carbon emissions by 2025, Patagonia has embraced a four-part process. Each part of this plan will work in concert with the others to help us keep our carbon footprint at zero as the company grows. Parts 3 and 4 in particular will help us become carbon positive—taking more carbon out of the atmosphere than we put in. 1. Measure Our Impact.
A third-party validated system is in place to measure our impacts so we can make informed decisions and track our progress.

2. Reduce Our Impact.
Avoid the need for energy where we can, improve efficiency where we can’t.

3. Convert to Renewable Energy.
Move away from fossil fuels to cleaner, renewable energy sources for everything we do.

4. Capture Carbon.
Invest and test ways to remove warming gases from the atmosphere (i.e. carbon insettingI sequestration programs). Think of these efforts as the difference between stopping the mess, and cleaning it up.
1 Measure Our Impact
Accurate data is essential to dispelling myths and making informed decisions. In 2017, we underwent a comprehensive greenhouse gas audit—an inventory of our company’s emissions, from extraction of raw materials to material creation to delivery of products to customers. We drew upon energy bills, transportation reports and life-cycle analysis of different materials, then had our analysis verified by a third party, just as scientists submit their research for peer review.II

Our fiscal year 2017 emissions amounted to 141,003 metric tons of CO2, or CO2 equivalent emissions.III (“CO2e” is a bit technical, but useful. It’s a standard unit of measure for various greenhouse gases, including methane, nitrous oxide, and fluorinated gases, that vary in potency, i.e. how much heat they trap, and for how long they linger.) Following a protocol developed by the World Resources Institute and the World Business Council for Sustainable Development, these CO2e emissions are categorized as belonging to one of three “scopes.”IV Scope 1 refers to direct emissions from the organization, effectively natural gas that we burn to heat the buildings that Patagonia owns or leases. Scope 2 emissions are from electricity that Patagonia purchases from utility companies. Scope 3 reflects the emissions from all other business activities, including those beyond our immediate control. For example, emissions resulting from the manufacturing of raw materials, cutting and sewing products, or moving products from one place to another. Here is a breakdown of our emissions per scope:
  • Scope 1: 3,617 tCO2e
  • Scope 2: 385 tCO2e
  • Scope 3: 137,001 tCO2e
2 Reduce Our Impact
Materials and Technology Discovering that nearly 86 percent of our total carbon emissions as a company come from the creation of the materials we use in our products has galvanized our staff to incorporate recycled materials wherever possible and support circular economies at every opportunity.

Whether they’re synthetic like polyester and nylon, or natural like wool and cashmere, recycled textiles are a solution that any apparel brand can adopt to reduce their carbon footprint. A switch from virgin polyester to recycled polyester can cut carbon dioxide emissions by 17 percent and keep plastic soda bottles out of landfills—without compromising the durability of our products.

The preferred materialsV we use throughout our line include:
Recycling isn’t the only solution to using better materials. Some textiles use chemicals that can’t be recycled safely, or require processes that haven’t been invented yet. We’re supporting our supply chain partners to develop new recycling methods and ways to incorporate nontraditional raw materials (such as fishing nets). And we’re funding research into future materials that are biobased, biodegradable and even carbon positive. Quality and Worn Wear® The longer our products last, the less impact they have, so creating products of superior quality is one of the most ecological things we can do. “Extending the life of clothing by an extra nine months of active use would reduce carbon, waste and water footprints by around 20-30%.”VI Therefore, creating durable products is one of our highest priorities and is the foundation of the Ironclad GuaranteeVII on our products.

Since 2013, our WornWear.com program has encouraged customers to repair, reuse, recycle and change their relationship with their Patagonia products. Through Worn Wear, we fix our customers’ gear in our stores, on the road and at our garment repair center—the largest sewing repair facility in North America. (We repaired over 55,000 pieces in 2018 alone). Worn Wear also buys back used Patagonia goods from our customers, refurbishes them and resells them on WornWear.com. This “re-commerce” business has so far extended the life of over 80,000 products.
Shipping Products Our products are shipped all over the place. To reduce our shipping footprint, we analyze our shipping routes to minimize distances traveled, switch to less energy intensive modes of transportation (i.e., ocean freight over air) and increase "drop shipping" where products ship directly from factory to regional distribution centers. In summer 2018, we added a new distribution center on the East Coast of the U.S., which allows us to ship to all our domestic customers with ground shipping within two days, reducing the need for more carbon-intensive air shipments. Our Supply Chain Task Force Patagonia is often a small portion of our suppliers’ business; our textile suppliers and contract sewing manufacturers assemble products for a lot of different customers. Each of our finished garments has been worked on by several partners by the time it reaches our shelves. Moreover, our partners face very different political, social and environmental challenges, depending on where they operate. Taken together, this makes implementing consistent environmental standards throughout our supply chain incredibly complex, and that’s why we created our Chemical and Environmental Impacts Program (CEIP). This global team manages environmental impacts in our global manufacturing supply chain from the textile mills to the subcontractors of our sewing factories.

The program has a robust set of requirements and we work with our partners to set progressive action plans in five key areas: environmental management systems, chemicals management, waste management, water use, energy use and air emissions. One immensely helpful step for CEIP has been adopting existing industry certifications such as bluesign®. The CEIP team works with suppliers to calculate and reduce greenhouse gas emissions by switching to more efficient practices and adopting low-carbon or zero-carbon energy sources.
Patagonia Buildings We currently have over 75 Patagonia operated stores across the globe, seven regional headquarters and two distribution centers. When opening new locations, we’ve long prioritized the use of existing buildings over new ones and have developed a set of sustainable building principles to guide their development. These include low-impact construction techniques, energy efficiency and renewable energy, passive heating/cooling, reclaimed materials and low-VOC paints. For example, in addition to our on-site solar arrays (more on this below), our Reno distribution center has a “night flush” system that brings cool air into the warehouse each evening, eliminating the need for any cooling equipment. Sustainable Commuting In 2010, we launched our Drive-Less Program to encourage employees to avoid single-occupant vehicle commuting. Each year Patagonia rewards employees who carpool, ride a bike, skateboard or take public transportation by reimbursing them $2 per trip, and up to $500 per year. This past year over 900 employees collectively avoided 951,482 single-occupant vehicle miles.
3 Convert to Renewable Energy
Owned and Operated Locations One hundred percent of the electricity we use in our global owned and operated locations will come from renewable energy by the end of 2020. Reaching this goal requires that we improve operational efficiencies, change some of our energy providers and invest in renewable energy. We’re doing all three.

In the U.S., on-site solar arrays at our headquarters and distribution centers account for only three percent of our U.S. electricity use. However, as of fall 2018, we have four additional solar arrays being installed, which total an additional 1.6MW of on-site renewable energy. This will cover an additional 52 percent of our U.S. electricity use. To address the other 45 percent of our electricity needs, Tin Shed Ventures®, our in-house investment arm, funds residential solar projects across the U.S. These arrays power over 1,500 households and yield Renewable Energy Certificates (RECs) that Patagonia applies to its U.S.-based electricity consumption.

In Japan, we’ve transitioned to a power provider to source a higher grid mix of renewable energy and have invested in a 150KW project that installs raised solar panels over an agricultural field, allowing for the land to produce clean power without sacrificing agricultural production.

At our European headquarters in Amsterdam, we worked with the other tenants of the building we occupy and convinced the landlord to adopt 100 percent wind power in the building.

Solar panels on our office in Australia and one of our retail stores meet 25 percent of Patagonia Australia’s energy needs.

Combined, these efforts pump electricity onto the grid greater than 100 percent of our U.S. electricity use and 76 percent of our global footprint.VIII
Supply Chain and Non-Connected Investments Given that the lion’s share of energy use happens in our supply chain, we are also working with suppliers to invest in renewable energy projects at their facilities. In areas where we can’t transition suppliers to renewables, we are exploring significant investments in larger-scale renewable energy projects to offset our regional footprint. Work on this front is just beginning as we are analyzing country-specific policies, financial opportunities and hurdles, and potential investment and project development partners. As our supply chain converts over to renewables, we anticipate the need for offsite renewable energy projects will lessen.
4 Capture Carbon
Regenerative Organic Agriculture If there’s one thing we’re convinced that we can do as a company that could actually solve the climate crisis, it’s regenerative organic agriculture. A collection of farming and grazing practices that emphasize the use of cover crops, rotating crops, composting and little or no tilling, regenerative agriculture employs people, yields healthy soil, protects and enhances biodiversity, and improves water quality and retention. Furthermore, and most exciting for us, is the potential of these agricultural methods to capture carbon from the atmosphere, where it’s trapping heat and cooking our home planet, and store it deep into the soil. According to Rodale Institute, switching the world’s croplands and pastures to regenerative organic agriculture could remove more than 100 percent of the world’s annual carbon emissions.IX

We firmly believe in the potential of regenerative organic agriculture to supply our cotton (we have pilot programs underway), and sources of food for Patagonia Provisions (starting this year with mangoes). We also believe it can improve the way the world grows its food and fiber. Along with Rodale Institute, Dr. Bronner’s and other key partners, we’re supporting a Regenerative Organic Certification. This certification supports a holistic approach to agriculture encompassing pasture-based animal welfare, fairness for farmers and farm workers, and robust requirements for soil health and land management. We plan to widely adopt this standard throughout our supply chain.
Reforestation We work with key suppliers and nonprofit partners to explore other types of carbon insetting projects, such as reforestation initiatives. The term “carbon insetting” is defined as a carbon reduction project, verified by an offset standard, which occurs within a company’s supply chain or supply chain communities.X

IThe term “carbon insetting” is defined as a carbon reduction project verified by an offset standard, which occurs within a company’s supply chain or supply chain communities.

IIOur GHG inventory currently looks at our impacts from raw material creation through to the delivery of products to our customers, and at this time only relates to our apparel business. In terms of the GHG protocol, this includes Scope 1 and Scope 2 emissions, and Scope 3 emissions tied to the following categories: purchased goods and services, upstream transportation and distribution, and downstream transportation and distribution.

We acknowledge that there are emissions associated with other parts of our value chain such as the use phase of our products. We have a phased approach to bring these other impacts into our overall GHG inventory and carbon neutrality plan. The third-party audit was done by SGS (started in fall 2017 and ended in early 2018).

III141,0003 metric tons CO2e is equivalent to: 15,225 homes’ energy use for one year, or emissions from 30,193 passenger vehicles driven for one year.

IVThe Greenhouse Gas Protocol breaks emissions into three different “scopes.” Scope 1 refers to any direct emissions from owned or controlled sources (i.e., natural gas burned on-site, fuel from company vehicles). Scope 2 emissions are a company’s own emissions from purchased electricity. Scope 3 emissions refer to any other emissions along a company’s value chain (upstream emissions such as those from creating materials to downstream emissions like those related to delivery of products to a customer).

VSuppliers are required to have certified preferred fibers using one or more of these certifications: Traceable Down Standard, Responsible Wool Standard, Organic Cotton Standard, Global Organic Textile Standard, Forest Stewardship Council, Global Recycle Standard or Recycled Claim Standard.

VI“Valuing our clothes: the true cost of how we design, use and dispose of clothing in the UK.” Waste & Resources Action Programme, Page 5

VIIWe guarantee everything we make. If you are not satisfied with one of our products at the time you receive it, or if one of our products does not perform to your satisfaction, return it to the store you bought it from or to Patagonia for a repair, replacement or refund. Damage due to wear and tear will be repaired at a reasonable charge.

VIIIWe are currently in the process of getting these calculations verified by Center for Resource Solutions, an external firm who specializes in and certifies renewable energy claims under their Green-e certification program.

IXReport: Regenerative Organic Agriculture and Climate Change–A Down-to-Earth Solution to Global Warming(Page 2), “Simply put, recent data from farming systems and pasture trials around the globe show that we could sequester more than 100 percent of current annual CO2 emissions with a switch to widely available and inexpensive organic management practices, which we term ‘regenerative organic agriculture.’ These practices work to maximize carbon fixation while minimizing the loss of that carbon once returned to the soil, reversing the greenhouse effect.”

XThe term “carbon insetting” is defined as a carbon reduction project, verified by an offset standard, which occurs within a company’s supply chain or supply chain communities.
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