|Every year our customers ask us many questions, often about things like the fit or availability of a product. They can also be about our efforts in promoting fair, safe and healthy factory workplace conditions. All of these questions help our customers make informed purchases. They also encourage us to fulfill a core company value, to lead an examined life, and to improve our Corporate Responsibility program.|
Quality, business factors (technologies, skill, location, price, customer service, ability to deliver on time); and environmental and social performance are the four factors.
Quality continues to be our principal criterion for sourcing. Reduced environmental harm is a strong second criterion. If we can reduce environmental harm without sacrificing quality we do so; where reduced harm will increase the price we make judgment calls; the environment often wins, even when we think a decision will cost us sales.
Our Social/Environmental Responsibility team can veto use of any mill or factory that does not meet our standards for social and/or environmental practices. Failure to meet our high minimum standards in any regard automatically disqualifies a factory from being considered. When evaluating social performance we look at two things: the degree to which the factory meets or exceeds the standards set in our Code of Conduct and the extent to which its owners are willing to work with us to improve areas in which they fall short.
Some of the countries we work in, including China, have poor to mixed records for protecting both the environment and workers' rights. The U.S.'s record is better, but not as good – in some cases not nearly as good – as either the E.U.'s or Japan's. We've made the choice not to disengage from countries on the basis of their policies. We work with several excellent factories in China and Vietnam, in particular.
We believe in choosing factories wisely and in constructive engagement with others to lobby or work for change. Patagonia alone cannot change the work culture or government policies of the countries we do business in. We do work with other brands that share our factories and we collaborate with NGOs and others trying to improve working conditions.
Not all do. We require that factories pay their workers a legal minimum wage or better, that working conditions be decent, and that workers have the right to join a union. Many of our clothes require highly skilled labor from operators who earn a decent hourly rate for local conditions. We prefer to work with factories who pay workers enough to meet basic needs – and more.
We agree with the living wage principle – that a family has to be able to live on what it’s paid – but don’t yet practice it. Why? Sewing is low-paid work and the business is competitive (and many governments, including that of the U.S., set minimum wages low). A living wage can be hard to define. Factories have to be assured that they can raise prices to pay higher wages without losing revenue (and thus risk worker layoffs). Also, factories often work with multiple companies, and pay the same wages regardless of the company. So for a factory to pay workers more, all customers of that factory have to agree to pay more. The factories have to overcome the fear of business loss due to higher prices. And enough consumers have to pony up the extra cash to ensure a living wage.
There’s no excuse, though, for exploitation of the labor of poor people to make nice things for the better off. We believe the best way to achieve a living wage is for a collaborative association like the Fair Labor Association (FLA) to establish a living wage (or fair wage) clause, which would ensure that all companies who are members agree to add to their Codes of Conduct the same standard as well as a graduated or “stepped” timetable for achieving it. To be effective any new wage clause has to have teeth – and include provisions for auditor training and factory verification. We are working for this within the FLA.
For the moment, we track minimum and prevailing wages in each country from which we source; we work toward a higher, fair or living wage in our costing negotiations with each factory. From the results of our own social audits and FLA monitoring, we know that many of our factories pay above minimum wage for some or all of their workers already. We have also participated in the "JO-IN" project, a multi-stakeholder initiative in Turkey (with the Clean Clothes Campaign among others) that worked towards a “stepped” wage ladder in the pursuit of achieving a living wage.
All this said, according to the “Living Wage Calculator” for Ventura County (California), where we have our headquarters, a living wage for one adult (in 2010) is $12.46 an hour – no problem. But for a single parent supporting a child a living wage is $22.49 per hour ($46,779 per year). That sounds about right, but by this standard we do not pay some of our own headquarters employees a living wage, although we pay competitively (and well above minimum) and have earned recognition from the press as one of the best companies in the United States to work for.
Patagonia is committed to “use business to inspire and implement solutions to the environmental crisis.” Over the past 20 years we have given nearly $40 million in cash and in-kind donations to environmental causes. We helped launch two other North American business philanthropies, the Conservation Alliance and 1% For The Planet, and the European Outdoor Group’s Association for Conservation. We don’t give money to schools, hospitals or the arts. All our philanthropic effort goes to environmental work.
That said, we understand that as a business we contribute to the environmental crisis. Everything we do in the day pollutes or generates waste. For the past 20 years we have been working to reduce the harm we do both directly and indirectly through the actions of mills and factories making Patagonia clothing. We were the first company our size to switch to the exclusive use of organic cotton and to make fleece from recycled soda bottles. As we learn to reduce our environmental footprint, we actively share the information with other businesses.
By another definition of responsibility – how we conduct our business – we give the social and environmental sides equal weight. We treat our own employees as full human beings who have active family lives and important outside interests. We are commonly included in lists of “100 Best” North American companies to work for. We were the first company our size to open subsidized, on-site child care at our Ventura headquarters.
We also actively work to improve the lives and protect the health and safety of the factory workers who produce Patagonia clothes worldwide. We don’t chase lowest-cost labor around the globe. We were a founding member of the Fair Labor Association (FLA), which audits factories that produce our goods to make sure employees are paid legal (or higher) wages, work in humane conditions, and have the right to join a union (FLA publishes its audits on its website). In the U.S. we are active members in the Outdoor Industry Association’s Eco-Index and Corporate Responsibility Working Groups and the European Outdoor Group’s Social Responsibility Working Group, where we can exchange information on best practices with other like-minded outdoor brands and mentor smaller companies just starting out on their own social responsibility programs. Patagonia Europe is similarly active within the European Outdoor Group’s (EOG) Sustainability Working Group.
We also take some unusual business actions to advance social responsibility throughout the supply chain. Our Social and Environmental Responsibility (SER) team works in the Production Department, and with the Quality staff, not in the administrative or marketing arms of the company. All three teams (SER, Quality, Production) work and travel together. Each team’s director has an equal say in sourcing decisions for new and current goods. Each has veto power over doing business with a new factory. Before we place our first order, each new factory is viewed through a comprehensive social/environmental and quality lens (during direct audits by our SER and Quality staff). SER staff visit factories regularly to both conduct audits and follow up on corrective actions from previous visits and to conduct training or concentrated remediation for specific concerns. We are strongly committed to long-term continuous improvement of social and environmental standards in factories.
Patagonia as yet has not published a CSR or Sustainability Report that follows the guidelines of the Global Reporting Initiative (GRI) or other framework used by other companies.
We are committed to co-responsibility for decent treatment of workers throughout the supply chain. We publish our factory list online. You can access social audit report results for factories that make Patagonia clothes through the Fair Labor Association (FLA) website (we are an accredited member of FLA; they randomly audit a sampling of our factories every year). Our newly redesigned Footprint Chronicles site also includes social audit results from our supply chain.
To report on environmental responsibility, the Footprint Chronicles looks at some of the environmental impacts in our supply chain. The Footprint Chronicles allows us to talk about critical social and environmental stories with all our stakeholders – customers, the press, suppliers, employees and students – in unspecialized, everyday language. We give priority to the issues that challenge us the most – or that our stakeholders regard as a challenge and ask us to address. We highlight failures and ongoing challenges as well as incremental successes.
We inform our customers and the public on our progress in social and environmental responsibility in other ways too – in the Corporate Responsibility section of The Footprint Chronicles, in our annual Environmental Initiatives booklet, in the Environmentalism section of our website, and on our blog, "The Cleanest Line." We feel these are exciting, interesting, interactive and transparent methods to show our commitment to human rights, environmentalism and ethics.
In early 2012, we became the first company in California to become a Benefit Corporation (B-Corp) with the State of California. This certification process requires annual reporting.
The advantage to the reader/user of sustainability reports that follow the GRI framework is the ability to easily compare data from different companies. The disadvantage: a sustainability report, like an annual report, can be a dull read held forth in specialized language that clouds as much as it reveals. Because we recognize the advantages of easy comparability, we are investigating the possibility of importing data we collect for the Footprint Chronicles into a GRI framework (and with as much plain speaking as possible). Sustainability reports can be expensive for a company of our relatively small size to research and produce and can only supplement, not substitute, for the Footprint Chronicles. We want to continually raise rather than lower the quality of the conversation we’ve created with our stakeholders over the past years.
We publish our contract factory list for review by NGOs, customers and other stakeholders. We want to be able to work with other customers of a factory to communicate, monitor, and implement solutions for social and environmental responsibility. We want to ease the burden of monitoring and focus resources on making the changes that will improve working conditions.
As more brands become vocal about their social responsibility efforts, suppliers become more aware that social responsibility is a part of doing business. Consistent messaging from all brands builds momentum.