CEO talks of REI's work, environmental culture

Business is not just about sales and the bottom line. It’s about building customer loyalty, engaging the next generation in environmental stewardship and striving to reduce your company’s carbon footprint. Not your usual business message. But then Sally Jewell, president and chief executive officer for Recreational Equipment Inc. isn’t your average CEO and REI is far from the average American corporation.

Jewell was in Missoula recently to meet with UM students and faculty and deliver the Harold and Priscilla Gilkey Executive Lecture.

She began with an overview of REI history. REI started in 1938 as a co-op of climbing friends who had to order equipment from Austria because it wasn’t available in this country.

The first store opened in Seattle in 1944. Today the co-op boasts 91 outlets, 3 million active members and a strong presence on the Web. In 2005 it crossed the billion-dollar mark in sales.

REI has been on Fortune magazine’s 100 Best Companies to Work For list since 1985, the first year the list was released. The companies are chosen by an employee rating system Jewell noted, “Missoula is an important town to REI. It’s the smallest store anywhere.” She said, with all the outdoor activity in Missoula, she expects that to change soon.

Jewell said REI always has had a strong commitment to giving back, but in 2002 the co-op changed its giving policy to focus more directly on a goal of helping children become stewards of the environment.

Recent studies have shown that children spend an average of 47 hours a week in front of a screen but only about a half hour in outside unstructured play. REI has responded with several programs and initiatives for children, including the Passport to Adventure program available through all of its outlets.

Jewell said that many of REI’s environmental programs have been initiatives of staff members who have been concerned with waste and interested in issues such as purchasing paper for catalogs from wood that was harvested using sustainable forest practices. She said the co-ops’ goal is to be “climate neutral” by 2020.

When asked by an audience member how being a co-op is good for business, Jewell noted, “It can be a challenge. At one time, REI was close to bankruptcy (referring to the dot-com era).” She said the downsides of a co-op are that there is no “watch dog” such as the stock market and no access to outside capital.

She said a key benefit of a co-op is being able to plan long-term, which in today’s climate is an “enormous strategic advantage.” REI is considering five 25- to 50-year trends today in its business practices: globalization, urbanization, demographic shifts, technology and global climate change.

For example, the great majority of people who purchase REI clothing and gear are Caucasian. Jewell said REI has done studies on how different ethnic groups recreate. Latinos tend to enjoy large family gatherings in the outdoors. She said that might suggest that managers of public parks consider clustering picnic tables.

Jewell said she believes many corporations are interested in improving their environmental practices and are oriented to do it. She said legislation and regulation likely to arise in the government sector “will help companies make the right decisions.”