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In 1935, it was pretty hard to find good ice axes. At least that’s how Mary and Lloyd
Anderson felt when they decided to cut out the middlemen and purchase a pair of quality
axes directly from Austrian manufacturers for the low price of $3.50. With axes in hand,
the couple took to the mountains. But Their friends soon yearned for the same inexpensive
gear that the Andersons had, and so in 1938, the couple created Recreation Equipment, Inc.
to help their friends acquire cost-effective and durable outdoor gear. But there was something
special about the makeup of what would come to be known as REI. With the popularity of
communism and collectivist ideologies on the rise, Mary and Lloyd Anderson created a membership-based
co-op. Their friends paid a lifetime fee of $1 to build the coffers of the growing company
so that the Andersons could buy more and better gear. In return for that $1, members, which
at the time were primarily people the Andersons knew, would get a yearly dividend from the
company and reap the benefits of the discounted prices. With this structure in place, a young
co-op was born. But the scrappy outdoor gear shop didn’t stick to selling to friends
for long. Jump to the end of 2018, and it now boasts 160 plus stores bringing in $2.78
billion in sales. Memberships have followed suit, climbing to 18 million members at the
end of 2018. REI is now a far cry away from its humble roots, but it many ways it seems
to be holding on to that image of the friendly, neighborhood co-op that does right by its
members and its community. But is that really the case? Is REI the “ethical” and “eco-conscious”
co-op that it seems to be painting itself as or has its massive growth in recent decades
defanged the purpose and benefits of the membership-based co-op that the Andersons set out to create.
Co-op can mean several things when it comes to business or housing. Some co-ops refer
to companies that are worker-owned and operated, while others are housing systems collectively
run and organized by the community within the dwelling. The REI membership model is
just one type of cooperative structure, meant to involve customers in a collective decision-making
process to counteract the hierarchical tendencies of a typical business. The way REI functions,
and indeed what may be the reason for its success over the last 82 years is that when
customers pay for the now $20 lifetime membership, they receive yearly dividends from the company,
which this year amounted to $204 million, as well as voting power in the board of directors
election process. On paper, these seem like excellent benefits for the average customer:
money back in your wallet at the end of the year, and, if you want, a say in who runs
the company. Honestly, compared to most big box retail stores of similar size, this is
a significant and positive difference. But upon closer inspection, the “collectively
run” aspect of REI seems to be a piece of the co-op model that was left behind when
the Andersons formally left the company in 1971. With 18 million members, it would seem
like these shoppers could have a lot of sway in how the company is run. But since 2005,
the REI board of directors have consolidated their influence and disempowered customer
votes by only allowing board-approved candidates to run for board seats. On top of that, the
board now sets its own compensation. Previously, board members were paid $4000 a year and typically
were outdoor enthusiasts who owned a local bike shops, like 14-year board member Angel
Rodriguez. But, as the company sprawled across the United States and management of the company
became all-consuming, these board members were replaced with career CEOs and financial
consultants like current Board Chair Steve Hooper. In 2018, each board member made $100,000.
Former President and CEO, Jerry Stritzke made 3.24 million dollars. In contrast, the average
hourly pay for an in-store employee was $10-$12. As the board continues to distance themselves
from the desires of members, it's hard not to question the authenticity of the “co-operative”
part of REI co-op. Because, after all, if the community have very little say in the
company that they supposedly own a part of, what’s the point in claiming the “co-op”
title other than to market to outdoorsy, primarily white shoppers like me who romanticize the
idea of a co-op. In this way, the REI membership program functions much more like a loyalty
program at Costco than a viable way to run the company collectively.
How then, does this affect the environmental actions and ethics of REI? Are their claims
and aesthetically pleasing commercials about sustainability like their use of the term
co-op? All talk and a little bit of walk? Much like its competing companies, REI seeks
to position itself as a leader in the field of “corporate sustainability.” It’s
doing this through several avenues, some of which are successful, and some of which are
not-so-much. One of the company’s most promising areas of environmental action has been re-commerce.
Or selling used gear. REI is famous for its members-only Garage sale, where they sell
tons of used gear for low prices. And as the company begins to focus on a circular economy
model, they’re establishing an online store for thousands of pieces of used gear as well
as items for rent. This move towards used and rental outdoor gear is promising because
they’re not only diverting these materials from the landfill but also avoiding the creation
of new clothes, which ultimately means the environment impact of production, manufacturing,
shipping, and inevitable waste are done away with. This emphasis on resale and rentals
ties in with a company-wide goal of meeting Zero Waste, or diverting 90% of its waste
from landfills by the beginning of 2020. Unfortunately, it’s now 2020 and they still haven’t achieved
their goal. REI has since revised this plan, and set a deadline for the end of 2020.
Alongside waste and materials, they also donated $8.4 million to non-profits in 2018 and took
on advocacy work at the state and national level seeking to “shift the American mindset
around outdoor recreation, from a societal nice-to-have to a must-have” But even as
REI buys up renewable energy from local utilities and slaps solar panels on their store roofs,
they continue to run headlong into the problem of growth. REI’s annual CO2e emissions have
increased slightly since 2014, and when added together with customer travel for their REI
Adventures trip, the upward trend in emissions is undeniable. So, REI is doing effective
work in terms of minimizing their impact and advocating for the protection of public lands,
but their primary need for sales and growth is counteracting these goals.
“The reality is, many, many companies are trying to fight on both sides of a war. In
their main operation, in their lobbying activities, they are pushing for an America that is merciless.
And then, understanding the need to brand themselves, understanding the need to soothe
a little bit of the public anger in this age of rage, they give a little back. They throw
some scraps at us. And what is so sad is that all too often it works.” That’s Anand
Giridharadas, author of Winners Take All, which investigates the way in which elites
have transformed what it means to create social change. What he says here is important to
keep in mind when we’re analyzing these “sustainable” companies. We have to discern
whether we’re being fed scraps or being served a whole meal. I’m harsh on REI because
I think it’s important to hold companies of this size to the highest standard. If you
call yourself a co-op, you have to act like one. REI does well by the environment and
its consumers compared to others, but the bar we set for companies nowadays is extremely
low. REI seems like it’s a true advocate in part because everyone else is doing so
little. Their advocacy work is admirable but it almost solely focuses on protecting wilderness
areas, which is a convenient solution for REI because it’s what their primarily white
middle class customers want to see, and because it ensures that there will continue to be
natural areas around for customers to use their gear. REI is certainly on the better
end of the “Corporate Responsibility” spectrum, but it still exists in a realm of
companies using morally-coded actions to attract more customers and ultimately more sales.
In short, we’ve created an economy in which buying a sweater is seen as a comparable replacement
for calling up your elected official or protesting on the streets. The idea being that when you
buy that sweater, the company you’re buying from will ideally do all the hard structural
work for you. But the harsh truth is that we can’t shop our way out of climate change.
Yes, the choices we make when we do need to buy something are important, some companies
are better than others, but that is just a small element of the climate action-puzzle,
because, at the end of the day, more REIs won’t equate to no climate change.
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