Patagonia recently shared its first climate risk report, which is a big step for a company of its size—$1.47 billion in sales. This assessment, aligned with California’s SB 261 and the TCFD framework, focuses on actual emissions data rather than just goals.
Surprisingly, 99% of Patagonia’s emissions come from suppliers. Most of this—86%—is tied to textile production, which includes sourcing raw materials and making fibers. In contrast, the company’s own operations produced only 1,428 metric tons of emissions in FY25, out of a total of 182,646 metric tons.
The regions where Patagonia sources its materials, such as Vietnam and China, face serious climate risks. Issues like flooding, tropical storms, and rising sea levels pose significant threats. Meanwhile, California, where Patagonia is headquartered, is at high risk for wildfires.
As for regulatory challenges, Patagonia anticipates stricter rules about greenhouse gas disclosures and product labeling. They believe that their strong focus on sustainability can help them navigate these pressures but also recognize the risk to their reputation if they don’t show real progress in addressing climate change.
The company has set ambitious goals: an 80% cut in emissions from its own operations by FY2030 and a 90% cut across all categories by FY2040. They’re already close to 98% renewable electricity for their operations, but tackling Scope 3 emissions remains a tough challenge, especially due to limited renewable energy options where their suppliers are located. This issue isn’t one company can solve on its own.
This report serves as a useful reference for other businesses looking to align with TCFD requirements. It indicates a shift in expectations: regulators, investors, and peers want detailed climate risk assessments tied to specific locations and hazards rather than vague reputation concerns.
As we face ongoing climate challenges, Patagonia is setting a roadmap. Their approach may inspire other companies to be more transparent and proactive about their environmental impacts. With climate change increasingly affecting global supply chains, this can reshape the industry’s focus on sustainability.
For more insights into climate risk assessments and sustainable practices, check out relevant research reports and expert analyses.
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