Example for Companies to Come


Patagonia is a company that has been pointed at for years as being a leader of sustainable business. Their ability to go the extra mile to produce a high quality product with environmentally safe resources is something that they pride themselves on. I believe that there is no better way to summarize the business model of Patagonia than by simply looking at their mission statement, build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis. Patagonia as a company was one of the first major clothing companies to focus more on sustainability than making money. After simply glancing at websites from other clothing competitors the biggest difference that I have noticed is that the information about that companies supply chain or corporate social responsibility is much harder to find than on Patagonia’s website. This helps Patagonia stress their sustainable approach. Sustainability ethics is something that Patagonia is very adamant about and is something that I want to explore in greater depth. There are many different definitions of sustainability ethics and I want to put Patagonia under a microscope and test two of them.

Patagonia as a company was a long process that was started by a man named Yvon Chouinard. One of the primary reasons that the brand became so successful was because it was one of the first athletic apparel companies that sold men’s clothes that were anything but bland. Typical outdoor workout fashion for a man at the time was a simple grey sweatshirt or a plain white T-shirt. Patagonia rejuvenated the industry by producing heavy, brightly colored pieces of clothing that could be worn while climbing or doing an activity outdoors.  Their product was very durable and heavier than the typical outdoor gear at the time which increased their products popularity even further. The Patagonia we know it today is a privately owned company with an extreme focus on sustainability. This is very obvious by simply poking around their website for ten minutes. They have an aspect of their website that is called “The Footprint Chronicles” which maps out every aspect of their supply chain from start to finish. It provides the customer with a map with the locations of all the company’s textile mills, factories and farms. When a customer clicks on one of these locations an information tab pops up onto the screen containing the basic information of the factory or farm, as well as the number of workers that are employed, as well as what languages are spoken. This kind of transparency is something that is not typical in the world of business today. However it has not been all sunshine and daisies for the company thus far. They have encountered several scandals when it comes to how sustainable their suppliers really are. However they even address both of these on their website and openly accept the idea that it happened. The scandal was about workers in Taiwan that had been essentially paying an “agent” who then found them a low paying job in a factory. The agents and the factories were working together to make as much money as possible off of the workers. Once Patagonia discovered this they immediately tried to solve the problem by attempting to talk with the factories and workout a settlement. Eventually the company was able to sort something out with the factory and made the lives of the workers significantly better. The more recent and popular scandal that the company was involved in took place in August of 2015 when a video showing the mistreatment of lambs in one of Patagonia’s wool suppliers came out. The company immediately stepped up and took the blame, they stopped buying wool from this supplier and attempted to solve the problem as best they could. They addressed the problem in several news clippings that were posted on their website stating “Patagonia’s partnership with Ovis XXI (the supplier) has long been a source of pride because of the program’s genuine commitment to regenerating the grassland ecosystem, but this work must come equally with respectful and humane treatment of the animals that contribute to this endeavor.” After releasing this statement they decided to stop buying wool from this supplier. These are some examples of how Patagonia handles pressure and is willing to make a hard decision when the time comes. They handle these situations the same way that they handle all other aspects of their business, with complete transparency.

The way the company acts during times of difficulty is one of the main reasons that people today think that Patagonia is one of the more ethical companies in the business world. However there are a lot of different ways to dissect the world of ethics. Sustainability ethics is an area that Patagonia has an extremely intense focus on and they have been one of the leaders in doing so. At the very core sustainability ethics is the idea of being responsible for the effect that a company or a person has on the environment around them. David Orr discusses several different crises that help explain why sustainability will not work in today’s society. One that is very prevalent in my opinion is called the “Crisis as a Social Trap”. This crisis is one of the more avoided and not talked about in today’s society. He is quoted as saying “Social traps draw their victims into certain patterns of behavior with promises of immediate rewards and then confront them with consequences that the victims would rather avoid”. So basically our society as a whole has been slowly shaping and forming itself into one giant social trap. I say this because everything in the world today is focused mainly around money and what the price tag looks like. Most people are looking to spend the least amount of money as possible throughout the day in order to gain some sort of short term advantage. The system today has made people so focused on money that they are willing to sacrifice other aspects of the future in order to have the highest profits right now. An example that David Orr gives us is the Tragedy of the Commons. In this story a farmer grazes an extra cow on an already overgrazed field because the system will reward him for doing so. In the long run that overgrazed field will be unusable and the farmer will have nowhere to graze his cows. This can be translated to real life by simply looking at our depleting natural resources such as fossil energy and land. The system does not punish people up front for the long term effects of their actions. The long term payment is paid in full at one time at some point in the future.

Patagonia is a prime example of how a company today is trying to enable its customers to avoid the social traps of the world today. They provide the customer with information about where their product came from and the kinds of effects it had on the environment while being assembled. This is something that is very seldom done in the world today. It would take much longer to find out exactly where a Nike product came from then where a Patagonia product came from. Patagonia enables people to realize what is happening when they are buying clothes for the cheapest price and who it effects. It effects not only the limited resources on the planet but the long line of factories that one shirt travels through. The underpaid and abused workers that make many of the cheap clothes we know today are some of the people that are directly impacted by these social traps that our society has fallen into. In my opinion the United States in particular has fallen into the social trap. As a country we are so focused on who can produce the cheapest option that looks the best. It is something that has been happening in our country for many years. It started when factory jobs started moving out of the country because of wage prices in other parts of the world, once that got the ball rolling it hasn’t stopped since. The extreme focus that we place on money plays directly into the social trap that David Orr is talking about. That is why so many people are infatuated with the idea of a company like Patagonia being as successful as they have been in the recent years. It has strayed from the traditional company values of only caring about money and started putting the people and the environment first.

Yes, Patagonia is about the closest thing to a sustainable model for a company that we have in the world today. However what do we make of the scandals that the company has been involved in? The workers’ rights scandal and the inhumane treatment of animals’ scandals hit the company pretty hard. But all in all they owned their mistakes and did not discredit any part of the accusations, instead they fixed the problem that was involved in the scandal and moved on, trying to run business as smoothly as possible. However they still have a target on their back. When a company is trying to be as “perfect” as Patagonia is it makes it easy for people to target them and throw scandals at them to try and harm the company. This is something that Yvon Chouinard speaks to in his book Let my People go Surfing. He knows that people attempt to demonize a company that is trying to do so much good for the world and we can’t let this happen. People simply feel inadequate and try to make themselves feel better by putting down the company that makes them feel this way. This could also fall into the category of the social trap, people of today’s world are susceptible to demonizing a company simply because one thing happens that is negative. It is a reaction of human nature to remember the bad things about something or someone before remembering the good things. This is the case with Patagonia, their scandals that happened throughout the last five or so years has given some people the impression that they are lying. It is rare that you hear about a company’s reaction to a scandal as much as you hear about the scandal itself. This falls into the social trap because the long term effects of harming a company that is trying to do the right thing could very well end up effecting the planet on a much larger scale.

Despite these scandals in recent years Patagonia has been continually growing and had a revenue of $570 million in 2014. Which brings me to the question of if it is possible for a company to put the environment first and still be profitable. This is a relatively new school of thought according to S.J. Fowler of the Judge Institute of Management. The old theories about management have been strictly focused around creating monetary value for the shareholder. But as the theories have moved into the modern age of environmentalism they have been shifting. Now it is seen as a basic requirement that a company attempt to be at least semi-clean during their production process. S.J. Fowler studied Patagonia in 3 distinct areas of the “newly healthy business strategy”. The first is pollution prevention, S.J. Fowler states that “research suggests that firms that are proactive about environmental issues attach significant importance to working with community leaders and other special interest groups, a position that is supported by Patagonia’s experience.” This is followed by a Patagonia representative explaining how they work with countless NGO’s in order to understand and best address the many problems of pollution. They have fixed many problems such as their battle with conventional cotton, they needed to find a way to bypass the typical system that used many harmful chemicals in the treatment of cotton. The second area of a sustainable company is a product-stewardship strategy that assesses how the product effects the environment throughout its entire lifespan. This means that a company should benefit by caring about how their product is made and assembled throughout the supply chain. A company’s stakeholders should be benefiting from a company taking care of how its products made, therefore turning a company into a profitable company. Patagonia does this extraordinarily well as I have already talked about with their “Footprint Chronicles” on their website. They clearly care about how their product effects the environment throughout the entire supply chain. The third and final area that S.J. Fowler discusses is sustainable development. This is the idea that a company focuses on a sustainable-development strategy that extends to other public and private organizations in order to bring out positive change in the world. Patagonia has been attempting to improve upon this over the course of recent years and has succeeded. They now donate 1% of their earnings to environmental organizations around the world. Patagonia excels in all three of these categories and that is why they are one of the prime examples of a sustainable company.

Patagonia has been and still is one of the leaders in today’s world when it comes to being environmentally friendly. They are one of only a few companies that produces a high quality product as well as care so deeply about the world we live in. It comes down to their mission statement: build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis. This is the best way to describe how they run such a fantastic company, and after doing much research it is hard to find anybody who thinks they are doing something wrong. From my perspective, Patagonia seems to be the perfect mold for the companies of tomorrow.

 

Bibliography

 

Chouinard, Yvon. Let My People Go Surfing: The Education of a Reluctant Businessman. New York: Penguin, 2005. Print

 
Orr, David W. “The Problem of Sustainability.” Hope Is an Imperative the Essential David Orr. N.p.: n.p., n.d. 73-92. Print.

 

Fowler, Stephen J., and C. Hope. “Incorporating sustainable business practices into company strategy.” Business strategy and the Environment16.1 (2007): 26-38.

 

Patagonia.com/us/environmentalism

  • The Footprint Chronicles: Our Supply Chain
  • Corporate Responsibility
  • Environmental Grants and Support
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