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Hikers, adventurers, and even just folks who want a good jacket have long trusted Patagonia to provide high-quality gear that will stand up to the elements, last for years, and allow them to feel good about their socially responsible consumption. These habits are largely based on Patagonia’s clear promise to customers: It vows to “cause no unnecessary harm” in its ongoing efforts to “build the best product.”

lo-res_bld132450-sBut sometimes missions are easier to state than they are to fulfill. For Patagonia, the challenge has been that it builds such good products that the company is growing. Growth creates expanded supply chain needs. For example, Patagonia spent three years developing a new woolen long underwear line that proved extremely popular with customers in cold weather climates. Thus its demand for wool expanded, leading the company to enter into a contract with a network of 160 different wool suppliers from South America. Such an expansive network makes it extremely difficult to monitor all the practices of all the farms raising the sheep that provide the wool. But if Patagonia also promises to cause no harm, then it must be responsible for that monitoring, as PETA pointed out when it captured video of terrible animal abuses at some of the farms that provided the wool for Patagonia. The brand agreed; it dropped its contract with the wool supply network, halted production on its new long underwear line, and sought new sources for wool. But how many sales did it lose in the process?

By establishing its broad, “do no harm” mission, Patagonia essentially promises to be socially responsible on every level, even if it is not primarily an animal welfare organization, for example. Thus when evidence surfaced that the geese that supplied down for its jackets also were sources of foie gras for a totally separate company, observers held Patagonia responsible. In this case, its supply chain in no way encouraged the force feeding of the geese. Whether fat or thin, geese provide the down that Patagonia was purchasing. But it was supporting, even if indirectly, a practice that many people regard as ethically indefensible, creating another challenge for the company.

Nor are the challenges limited to animal welfare concerns. Labor issues affect Patagonia, as they do most clothing brands that outsource their production to global factories. For Patagonia, a key ethical challenge arose when it discovered that workers had been required to pay bribes before they could get work in its Taiwanese factories. Although Patagonia responded by reimbursing the workers for any of the unethical bribes they were forced to pay, the incident raised renewed awareness of the difficulty associated with keeping track of the ethical practices adopted in each factory or farm around the world.

Patagonia has implemented new, more stringent standards and policies in its supply chain, including a collaborative effort to establish a “Responsible Wool Standard” for the entire industry. Yet the ethical difficulties appear poised to become even more intense, because Patagonia still is making the best products. Its profits have tripled in the past few years, meaning that it needs to keep expanding its supply chains to ensure it has enough products to satisfy these customers, seeking the best options that it has promised them.

Discussion Question: 

  1. What is Patagonia’s mission statement?
  2. Has it been successful in fulfilling its mission? Why or why not?
  3. What is it doing to address the situation?

Source: Erica E. Phillips, The Wall Street Journal, August 17, 2016