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Sustainable Investment Profiles

The Search for a Public Patagonia

When our clients describe the kind of company they want to invest in, the name we hear most often is Patagonia. The company’s highly public history of innovation and activism has long captured the imagination of socially responsible investors, from its early commitment in 1985 to donate 1% of sales to environmental groups, to its well-known initiatives to repair and recycle products. More recently, Patagonia underwent a complete restructuring: from a private, benefit corporation to a company managed by a business purpose trust, whose profits after reinvestment flow directly to an environmental collective. While some investors had held out hope that Patagonia would become a public company, founder Yvon Chouinard was unequivocal in announcing the change last year: “Earth is now our only shareholder.”

Along with Patagonia, other names we hear from clients include Ben & Jerry’s (sold to Unilever in 2000, with an agreement to retain an independent identity and board of directors) and Dr. Bronner’s (still a private, family-run company after 75 years). While many of our clients do hold a stake in Unilever, none of these companies offer direct, public ownership.

Within the universe of publicly traded companies, we believe our independent research and avoidance of mutual funds gives us ample opportunity to identify companies doing innovative environmental and social work. But investable companies as progressive and outspoken as Patagonia or Dr. Bronner’s tend to be hard to come by. Recently, however, one company with a surprising set of parallels appeared on our radar.

The Swiss sportswear brand On (officially On Holding AG), incorporated in 2010, began trading publicly in September 2021. Much like Patagonia’s innovative beginnings in the niche rock climbing market, On got its start developing a new form of cushioning for performance running shoes. More recently, the company has added apparel and accessories to its product line, much as Patagonia did during its early growth.

But it is On’s spirit of experimentation in making its products and operations as sustainable as possible—combined with strong transparency and commitments—that remind us most of the famed outdoor designer. One of On’s current initiatives, for example, is the Cyclon subscription program, in which customers regularly return certain sneakers or other products for replacement, so the company can fully recycle all materials and maintain complete circularity. On’s new CloudNEO shoe (available only via subscription) is constructed using two polyamides derived from castor beans, which are not only sustainable but 100% recyclable. The company has even begun making an EVA foam from captured carbon emissions.

In our experience, this level of commitment to, and investment in, sustainable product development is rare. It likely doesn’t hurt that On Running is a premium brand, although the company reports it accounts for approximately 7% of the overall global sportswear market (along with nearly a third of the premium market). But with so many different sustainability initiatives embedded in its product line, the company’s interest in the circular economy feels intrinsic, rather than forced.

At the same time, On has clear and specific emissions targets approved by the Science-Based Targets initiative (SBTi) and aligned with the Paris agreement’s 1.5-degree warming scenario. The targets include detailed Scope 3 reporting and goals (which cover supply chain emissions and those from customer product use). On already actively monitors energy use in its supply chain, promoting efficiency and renewable energy use among its suppliers, which resulted in a 12% emissions reduction in 2022. The company’s target is for all strategic Tier 1 suppliers to be fully powered by renewable energy by 2027.

Also in its supply chain, On has been gathering wage data from suppliers in Vietnam, with a 2025 commitment that 100% of those suppliers will offer a living wage. The company’s Swiss-mandated pay equity analysis found no gender pay gap, while the company says 44.5% of its leaders are women, 22.5%, are Black, Indigenous and People of Color, and 37% of its brand ambassadors come from underrepresented backgrounds. Not only do these figures represent high levels of equity and inclusion; they also demonstrate an exceptional commitment to transparency.

If there is one area where On may suffer by comparison to a company like Patagonia, it is likely its understated approach to promoting its own ideals. For On, it seems, committing to the work of sustainability, setting ambitious but specific targets, and reporting on its progress might be enough. But if a legacy of outspokenness is the last thing that separates iconic, progressive brands from the most sustainable of today’s public companies, perhaps that is appropriate validation for each approach. Now that the Patagonias and Ben & Jerrys of the world have radically reimagined how corporations can work, a company like On can take the baton, put its head down, and run with it.