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= Environmental Externalities of Branding in the Outdoor Recreation Industry =

Introduction
Generating $887 billion in American spending in 2017, the outdoor recreation industry is a notable component of the American economy. Sales from the industry accounted for 2.1% of GDP in 2019. This impressive revenue is generated through the sale of gear as well as lodging and travel expenses. Camping leads sales within the industry, with fishing and hunting taking second and third respectively.

As with all industries, the externality theory can be applied. Externality theory is an economic concept that refers to uncompensated production costs. Externalities rely on the idea of private and social costs, with the social cost of a product being greater than the private cost. External costs incurred by the producer are often indirect or nonexistent, with society bearing this burden. Products with negative externalities are overproduced because they do not account for the full cost of the product. If producers accounted for the full cost to society, its production would lessen to meet its true social demand. A broad externality example is that of pollution. A producer creates a product and sells it at a price point that only reflects the material value of the product. The price fails to account for the pollution created during the manufacturing process. This pollution price is shared by society, creating a negative externality. Externalities are often referred to negatively, but they can also be positive. For example, research and development by an industry is a positive externality because its benefits extend beyond the initial costs.

Ironically, the outdoor recreation industry abounds with negative environmental externalities. Toxic chemicals leaching from rain gear, microplastics fraying from clothing, and greenhouse gas (GHG) emitting fuel consumption can all be directly attributed to the outdoor industry. This relationship between outdoor recreation and its negative externalities creates an environmental contradiction. Industry leaders are working diligently to mitigate their impacts and promote the environmental awareness that their companies idealize. Outdoor powerhouses such as Patagonia and The North Face are becoming vocal leaders in conservation and sustainability education, both positive externalities. This balance between negative and positive environmental effects posits industry as a key player in environmental matters.

History
Outdoor recreation is a niche that has become available to the masses, with the elite defining themselves by their gear and outdoor accomplishments. The business of selling nature and natural experiences signifies a shifting paradigm driven by outfitters and industry. Originating from backcountry woodsmen, the outdoors was once a formidable opponent where daring explorers used their skills to conquer its elements. The outdoor industry’s birth is largely attributed to President Theodore Roosevelt and his establishment of the National Parks System. The parks quickly became sources of revenue, with elites paying premium prices for lodging and day trips. Outdoor recreation remained largely an elite activity until WWII and its post war boom. WWII pushed the outdoor clothing industry to find new clothing technologies, producing “war gear” for a variety of climates. The resulting post war surpluses and technological advancements were quickly capitalized by outdoors people. Purchasing army surpluses and altering them to become lighter and more stylish became an underground industry within the outdoors world. It was during this era that the quintessential outfitters of the 21st century got their start. As equipment became more mainstream, gear makers feared that too many common people would purchase their product. Thus, lessening the clout of their brand. The industry relied on advertising to promote their brands as gear for the elite outdoors people. The industry experienced another breakthrough as Gore-Tex waterproofing and synthetics became mainstream, creating an increasing variety of niche products for very specific circumstances. It was at this point that outdoor recreation became the gear driven industry that it is today.

Sustainability in Outdoor Companies
Outdoor companies such as Patagonia, The North Face, and REI, have been taking environmentally conscious steps to mitigate and avoid negative externalities. Guided by the Outdoor Industry Association (OIA), several outdoor companies have adopted sustainability as an ethos or a character trait of their company—acknowledging that sustainability is an unending process. As a result, outdoor companies have intentionally tied their products to the environment to engage their customers and drive sales. Companies leading with profit from sales versus environmental stewardship distinguishes greenwashing companies from those holding corporate social responsibility. The former, leads to negative externalities, while the latter leads to positive externalities. The Outdoor industry market is very fragmented, where each company holds less than 10% of the market. As a result, companies in the outdoor industries have been linking their brand to environmental action to gain leverage over customers in the market.

Patagonia
Patagonia was established in 1973 with the mission to “build the best product, cause no unnecessary harm, use business to inspire, and implement solutions to the environmental crisis”. Following this mission, allowing simplicity to shape innovation, and leading with environmental activism, the company leads sales in the outdoor apparel market. Patagonia is a role model for several companies in the industry as it connects its consumers to their cause, centering on corporate social responsibility. Some of their efforts to vocalize sustainability includes becoming a B-Corp, contributing to the 1% For the Planet Initiative, Operations Causing No Harm, their Worn Wear Initiative, and Anti-Consumerism Marketing. In the final three initiatives listed, Patagonia focuses on the environmental impact of their company and how to mitigate their impact. “Operations Causing No Harm” evaluates the company’s carbon footprint from sourcing of materials to distribution. In this initiative, Patagonia is transparent with their consumers—publishing carbon footprint statistics on their website. The Worn Wear Initiative works to educate consumers on repurposing and repairing clothing, while finding ways to make Patagonia products more durable in the future. Unlike several companies who tokenize independent “sustainable” lines in their brand to leverage consumers, Patagonia implements anti-consumer marketing to encourage consumers not to buy product. While this seems counterintuitive for creating a market, this encourages consumers to invest in quality products so that they will not have to buy several products overall.

The North Face
The North Face was established in 1966 with the mission to “provide the best gear for our athletes and the modern-day explorer, support the preservation of the outdoors, and inspire a global movement of exploration”. The North Face approached environmentalism as being able to survive, but a newfound transparency and vocalism concerning environmental activism has allowed it to be a more similar competitor with Patagonia. The North Face approaches sustainability in their supply chain and individual products by using carbon farming and down alternatives in their most popular products. In their Backyard Project, The North Face works to source materials from local farmers to cut on their carbon footprint and while supporting sustainable agriculture. This project further helps sell merchandise as it puts a story behind the company’s sustainability efforts. The company’s popular ThermoBall jacket is now made from 100% recycled polyester and insulation rather than down. Furthermore, the company has a company renewal workshop, like Patagonia’s Wear Worn Initiative, that encourages customers to return defective or no longer used items to stores. This conveys a company's devotion to sustainable alternatives—surrendering potential revenue for a positive impact on the environment. While The North Face has been transforming their supply chain to become more environmentally beneficial, their efforts directly reach to their consumers to encourage brand devotion. The North Face recognizes the importance of “radical supply chain changes” in their movement towards more sustainable production since material production makes up 60 to 80% of the company’s total environmental footprint.

The North Face is one of the largest contributors to VF Corporation—an American apparel and footwear company. Since The North Face contributes to this larger corporation, its membership shapes VF’s sustainability efforts, and vice versa. Future environmentally conscious decisions by The North Face will be driven by this membership in VF. VF is looking to achieve its conservation goals, and by driving corporate sustainable innovation, The North Face will gain corporate sustainable clout. Furthermore, VF is driving recycling, upcycling, repair, and rental options for their consumers.

Recreational Equipment, Inc (REI)
The Recreational Equipment, Inc., commonly known as REI differs from The North Face and Patagonia since it is an outdoor recreation services corporations, servicing customers with thousands of brand choices. Like the relationship between VF and The North Face, REI influences serval brands. REI has a set of sustainability standards focused on environmental, social, and animal welfare that apply to brands they partner with and will partner with in the future. This provides a code of conduct from companies of all sizes to adhere to without the weight of crafting their own. Since REI sells some internationally sourced products, these standards will extend beyond the United States and influence sustainable practices globally. REI claims that they will replace products from uncompliant brands with similar brands that follow the sustainability standards. REI further connects customers to this cause by revoking Black Friday celebrations and instead promotes customers to “Opt Outside.” Additionally, REI fosters a community of likeminded individuals by encouraging individuals to join the member-owned cooperative, which gives customers access to garage sales where individuals can buy used items.

Gore-Tex
Gore-Tex is only one of the many products created by Gore Industries. Specializing in material innovation, Gore Industries has become a key player in the development of weatherproof outdoor gear. Gore-Tex is known for its waterproof and breathable capabilities. These two characteristics are particularly difficult to couple, since waterproofing tends to limit breathability. Gore-Tex relies on a thin waterproof membrane layered between fabric to obtain its waterproof capabilities. However, this membrane only partially contributes to the breathability that its touted for. Gore-Tex is coated with poly-fluorinated chemicals (PFC’s) that causes water droplets to bead and roll of the surface. This prevents the surface from becoming waterlogged and eliminates the feeling of wetness.

However, this PFC coating has environmental consequences. Poly-fluorinated chemicals span a broad range of different compounds with some being environmentally persistent and harmful, with the effects of others being nominal. Overtime, the PFC coating tends to wash away and needs to be reapplied. The full consequences of PFC leaching is unknown, but it is an environmental externality that is unaccounted for in the cost of the product. Nonetheless, Gore Industries has pledged to eliminate the use of PFC’s of environmental concern by 2023.

Synthetic Fibers
As garment technology has improved, the outdoor industry has become increasingly reliant on synthetic fibers. Synthetic clothing sheds microplastics throughout its lifetime, especially when washed. Microplastics are defined as plastic fragments <5 mm in size. Microplastics accumulate in marine environments, with synthetic fibers accounting for a disproportionate amount of microplastics detected. The longevity of marine bound microplastics and their effects is largely unknown. However, it is known that microplastics are toxic and can accumulate within tissues, creating cancerous tumors among other ailments.

Aside from microplastics, the textile industry at large is a known polluter. Waste management facilities within textile plants is often lacking, with incinerators and landfills serving as the primary disposal methods. These methods release carcinogens into the environment, disproportionately affecting the developing countries in which the textile industry is entrenched. The prices of synthetic products fail to capture the negative effects of microplastics and its carcinogenic effects.

Fossil Fuel Consumption
Almost every aspect of the outdoor industry is reliant on oil and gas production. The creation of products, and the plastics within those products, requires oil and gas to provide the necessary energy and raw material. Fossil fuels are also used throughout the process of transportation to and from exotic outdoor locations. Fossil fuel consumption is a known emitter of climate change inducing GHG’s. The negative externalities of climate change are rarely accounted for within product and travel costs.

Fortunately, outdoor recreation has the potential to replace the resource extraction industry, especially in the American west. Outdoor recreation has helped to cushion the effects of boom-and-bust cycles inherent with western resource extraction. As the nation approaches a new paradigm, it appears that extraction will reach its final bust, with hopes outdoor recreation replacing it.

Conservation
As outdoor brands vie for more shares in the market, their environmental action has led to favorable results world-wide. As companies assess their environmental impact and make these statistics public, their efforts to mitigate and avoid future environmental impact increases. One way in which these efforts yield favorable results is in conservation. Patagonia’s contributions to 1% For the Planet facilitates conservation efforts and promotes sustainability by giving 1% of their revenue to environmental grassroots groups. The North Face’s transition to sustainably sourced or recycled materials reduces the carbon footprint of a product by up to 75% depending on where and how the product is made. These actions mitigate the brand’s footprint, which in turn promotes the health of the environment and protection of animals through the decease of down use.

Promote Sustainability
As companies adopt more environmental marketing initiatives and sustainable practices, whether performative or genuine, they share an environmentally centered story with their customers. Industry-wide there have been initiatives implemented to encourage a circular production model. These not only encourage customers to recycle old clothes but repurpose and get a full use out of their items. In turn this relationship between customers and companies forces companies to innovate more durable products that go against planned obsolescence. Greenwashing makes it difficult to assess sustainable from unsustainable brands. However, when companies, such as REI, incorporate sustainable standards for all their products, they can educate their customers on what sustainability looks like and accomplishes while making sustainable shopping easy and accessible.

Collaboration Among Outdoor Industry Companies
Since the outdoor industry consists of several different companies holding a small part of the market, competition through sustainability and painting oneself as “green” exists. This competition fosters collaboration among companies which leads to more innovation concerning sustainability. Several outdoor brands including Patagonia, REI, and The North Face have united by signing the OIA’s Climate Action Corps where brands promise to report their GHG emissions to reduce the overall environmental impact of the industry. Collaboration among companies in this industry forces companies to be accountable for their practices from sourcing to production to distribution.