Patagonia boss shares the No. 1 responsibility all CEOs have right now—it takes ‘courage' to pull off

Eugene Gologursky | Getty Images Entertainment | Getty Images

Patagonia CEO Ryan Gellert has a simple message for other leaders across corporate America: Start taking your responsibility to the environment seriously.

It's applicable to every CEO across any industry in the country, Gellert said during a panel at Fast Company's Innovation Festival 2023 on Tuesday.

"[One of the] top jobs and responsibilities for leaders right now, and as far out into the future as I'm capable of seeing, is really putting common sense over culture," Gellert, 51, said. "I think common sense tells us that the climate ecological crisis is one of the biggest threats facing humanity."

Patagonia, an apparel company reportedly valued at $3 billion, has long been considered a model on this front, dating back to its switch from conventional cotton to organic cotton in 1996. Last year, founder Yvon Chouinard transferred ownership of the business to a custom-built trust and nonprofit organization, designed to ensure that Patagonia's profits would go toward fighting climate change for the foreseeable future.

It was a bold move, and possibly a financially savvy one. Thousands of CEOs across the world say evolving to more environmentally-conscious business models is essential for the longevity of their companies, the 26th annual PwC Global CEO Survey found.

The problem, the survey noted: Most companies aren't actually doing much of substance to reinvent themselves.

Shareholders and stakeholders often pressure CEOs into solely focusing on profits and results, causing priorities like eco-friendliness to fall by the wayside, Gellert said. Productivity isn't bad, of course — but leaning too far into the numbers does any company, its employees and the environment a disservice, he added.

CEOs who want to emulate Patagonia's approach to sustainability can start with a few impactful changes, according to a 2021 Harvard Business Review article:

  • Form partnerships with nonprofit organizations in the area that interest you
  • Educate employees about the issues your company cares about
  • Rework your supply chain to source materials more responsibly or reduce the consumption of natural resources
  • Encourage employees to volunteer with incentives like paid time off

Some of those may be expensive, but they could actually help you make more money. Over the past five years, products making ESG-related claims averaged 28% cumulative growth, versus 20% for those that did not, consulting firm McKinsey & Co. reported in February.

In other words, sustainability matters to consumers — and their spending backs that up. Patagonia has the best reputation among all brands in America, beating out much-loved companies like Costco, Trader Joe's and Apple, according to the 2023 Axios Harris Poll.

CEOs with the "courage" and "consistent willingness to do the work" could reap similar benefits, Gellert said.

DON'T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!

Want to earn more and land your dream job? Join the free CNBC Make It: Your Money virtual event on Oct. 17 at 1 p.m. ET to learn how to level up your interview and negotiating skills, build your ideal career, boost your income and grow your wealth. Register for free today.

Copyright CNBC
Contact Us