Circular advantage anyone? Sustainability‐driven innovation and circularity at Patagonia, Inc.

Abstract

For many years, companies have perceived sustainability and corporate social responsibility as annoying trends involving regulations and extra costs. A new concept of industrial organization is required to dissociate growth in resource consumption from increasing prosperity. This concept must move beyond significant efficiency gains in order to successfully deliver change—an idea that is known as a circular economy. The increasing amount of attention paid to environmental issues and pressure from stakeholders have forced businesses to embrace the complexity and interdependencies between shareholder value and sustainable value. Sustainability‐driven innovation that increases the circularity of resources, as in the case of Patagonia, Inc., is the key to generating a sustainable competitive advantage that marries economic and social objectives. This article explores ways in which corporations can pursue economic, social, and environmental objectives while simultaneously embracing circularity.