California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
by David Salisbury
VUCA is the name of America’s future. Volatile, Uncertain, Complex, and Ambiguous – Our direction as a nation is up for grabs as the fight for the mind and soul of a highly-divided country is pitted between vastly-disagreeable sides steadfast in their politics. While there are no easy answers for how to bring the nation together with the best choices for the future in mind, there’s no doubt our influence on the environment is a pinnacle concern we should be addressing, especially at a manufacturing and business level.
This makes it all the more frustrating to watch Trump reduce ecological regulations, such as lowering air quality rules, ending NASA’s Carbon Monitoring System which is intended to improve the monitoring of global carbon emissions, proposing cuts to climate and clean-energy programs, and expelling the term “climate change” from FEMA’s strategic plan. All this despite one of the most devastating and expensive years of natural disasters in modern U.S. history and indisputable scientific evidence of humanity’s impact on growing ecological changes that are detrimental to life on the planet. Only recently, Trump’s tariff on imported solar panels has led U.S. renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, costing thousands of jobs.
With the current administration dismantling hard-fought ecological laws in the name of deregulation, business must step up themselves to ensure they provide a quality standard of ecological living for the planet’s inhabitants. Luckily, many businesses are already taking the lead and taking steps to lower their impact on the planet as much as possible.
One such business is Patagonia, the outdoor clothing and sporting gear retailer and pioneer in activist-based business, who has published a goal to increase renewable energy in its manufacturing and to reach a carbon footprint of zero by 2025. As discussed in Berkeley Haas Case Series’ article “Patagonia’s Path to Carbon Neutrality by 2025,” Patagonia follows a simple mission: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” From its small beginnings in 1973 to its current prominence as an outdoor-wear icon, Patagonia has strove to lead by example in figuring out how to reduce the negative climate effects of all aspects of its business, from greening its global supply chain to using recycled and organic materials in its products
For a company to become carbon neutral, it’s imperative they reduce their greenhouse gases (or GHG) emissions. Patagonia has created and invested in two solar funds, which are a form of offsite energy, to eliminate their emissions as much as possible. The need for offsite energy generation is a necessity to create new independent renewable energy capacities outside of the grid since the availability of renewable energy within the traditional power infrastructure is limited. As part of these efforts, they’ve installed solar panels at many of their international headquarters. At their Ventura, CA HQ, the panel’s output covers about 20% of the total energy use. At the Australia HQ, the two solar arrays installed produces energy equal to about 75% of the energy use of the Ventura HQ. Patagonia is currently working to get offices in the Netherlands running on wind power and exploring installing solar arrays at its Reno, NV distribution center.
To reduce the emissions associated with materials production, Patagonia is increasing its use of renewable and recycled materials. Renewable materials include natural materials such as wool or cotton; recycled materials can include both renewables and synthetics, such as polyester and nylon, which are the two biggest synthetic materials Patagonia uses. Switching to recycled synthetic materials has the potential to reduce GHG emissions as compared to using virgin materials because it eliminates the energy use necessary to extract oil and process it into fabric.
But outside of green manufacturing to reduce its carbon footprint, Patagonia is challenging Trump’s lax ecological policies directly. They’ve filed a federal lawsuit against Trump in effort to protect the Bears Ears National Monument in Utah which was proclaimed federally protected by President Barack Obama in 2016. Trump reduced the park by 85% in 2017, a victory for energy companies with mining leases for fossil fuel and uranium deposits, and a defeat for environmentalists and Native American tribes. Patagonia’s suit challenges that The Antiquities Act of 1906 gave presidents the power to create national monuments, but did not give power to reduce them.
While other companies don’t have to take Patagonia’s lead in suing the sitting president, there are others who are making their own efforts to go green in their own ways. Google has been working on an ultimate goal to be 100% renewable energy, pledging to run completely on wind and solar farms and creating the world’s most energy efficient data centers by 2017. Bank of America has committed to carbon neutrality by 2020. Apple announced its global facilities are powered with 100% clean energy with nine additional manufacturing partners committing to switch to clean energy as well.
Pin a VUCA world where the nation’s leaders are softening ecological requirements for companies, it will increasingly become the responsibility for those companies themselves to take greener measures of manufacturing and production moving forward. If government aims to make ecological protections non-mandatory, conscious companies will need to self-police if our planet hopes to survive these volatile, uncertain times. If you want to encourage more businesses to make environmentally-conscious efforts on their own, the most power you have is where you put your money. If you give to businesses which meet your ideological values, you will create a clear trend for future business to have to follow.