Business Ethics and Patagonia

Abstract

This paper will look at the Patagonia organization and how ethical they are as a company. It will discuss their history, how they were started, and where their mission and core values come from. It will also examine if they are in line with their mission statement and discuss ethical issues they have faced as an organization. It will discuss how they handled those situations and if the issues or situations are still existing for them as a company. It will also discuss if the issues harmed or benefited the company and if the public’s view or opinion of Patagonia has been affected. Finally, this paper will give an opinion of a change for the organization to make and how they might, if need be, re-invent itself to have a better public image. As mentioned, this paper will contain my opinions on the organization, taken from facts derived from credible sources.

Business Ethics and Patagonia

As discussed in the abstract above, the company I selected for this research paper was Patagonia. Patagonia was founded by Yvon Chouinard, who was an avid climber and falconer (Patagonia, n.d.). The company originally began, in 1957, as a climbing equipment company where Yvon Chouinard began to design and manufacture his own equipment which he then sold to fellow climbers, and did not begin selling apparel items until 1972 (Patagonia, n.d.).

The company has a simple mission statement that reads, “We’re in business to save our home planet” (Patagonia, n.d.). The company also has a modest set of four core values outlined on their company web page. Those values, in their words, are established to echo that they are, “A business started by a band of climbers and surfers, and the minimalist style they promoted. The approach we take toward product design demonstrates a bias for simplicity and utility” (Patagonia, n.d.).

The four core values of Patagonia are to build the best product, cause no unnecessary harm, use business to protect nature, and not be bound by convention (Patagonia, n.d.). Patagonia, of course, expounds further on each of their four core values. The first three are fairly self-explanatory and I do not feel it necessary to include the full expanded definitions or explanations here. However, the fourth core value “Not bound by convention” was something that I felt was not as clearly defined in title alone, and I really liked the way they defined it. Patagonia’s definition, about not being bound by convention is, “Our success—and much of the fun—lies in developing new ways to do things” (Patagonia, n.d.).

I appreciated this definition because it does seem, at times, that many companies, even extremely successful ones, get stuck in the routine of doing things the way they have always done it. The fact that Patagonia uses this as a core value, of breaking the mold intentionally, shows a lot about the company and their desire to find new ways of doing things. They also do not limit this idea to a single application and encourage their organization to have fun with the process.

As I mentioned before, Patagonia originally began as a climbing equipment company called Chouinard Equipment. Chouinard Equipment would later become Black Diamond a climbing and ski equipment and appeal company. Before that, however; when they were still Chouinard Equipment, “By 1970, had become the largest supplier of climbing hardware in the U.S.” (Patagonia, n.d.). As with most success, this was not without controversy though, and the organization faced its first ethical issue. In the early 1970’s Chouinard Equipment was looked at as an environmental villain because their climbing gear was causing damage to the rocks and mountains where it was being used (Patagonia, n.d.). Rock climbing at this point had become more widespread, but the climbing routes being used on the popular mountains had stayed concentrated to the same relative areas (Patagonia, n.d.). The way the climbing pistons being designed by Chouinard Equipment were used required them to be hammered into the rock face and then removed when the climbers were done. This caused numerous cracks along the climbing routs now leaving the rock faces severely disfigured.  Chouinard witness this damage personally and this left him, and his now business partner Tom Frost, with that first real ethical and environmental dilemma (Patagonia, n.d.). Chouinard Equipment, at this point in time remember, is now the largest climbing equipment company, providing safety equipment for climbers. This equipment undoubtedly saved climber’s lives and made the sport much safer. On the other hand, this equipment was causing damage to the vary rocks the climbers were using it on.  The answer was simple for Chouinard and Frost and they stopped making the pistons for climbing, despite the fact that this was the backbone of the business.

 Even before the mission of Patagonia was established, you can see it carried out in this situation by Yvon Chouinard and Tom Frost, “Trying to save our home planet” (Patagonia, n.d.).  Providentially, for the company, there was another option and they began to manufacture aluminum chocks. These aluminum chocks could be placed and removed by hand and did not require being hammered into the cracks in the rocks. The company began to sell them in 1972, and within months had put their pistons on the extinction list; so much so, in fact, they were having a hard time keeping production pace with the demand for the aluminum chocks (Patagonia, n.d.).

Patagonia almost seems to have become an apparel company by accident. Yvon Chouinard began wearing a rugby shirt in the early 1970’s while climbing since it was a sturdier shirt and held up to the rigors of rock climbing. Patagonia became an apparel company in 1972, founded by the same founders Yvon Chouinard and Tom Frost. They did not want to use the same name, Chouinard Equipment, despite the fact that it was an established company. The reasoning for this was pretty straight forward; to begin with they did not want to adulterate the image of Chouinard as a tool and equipment company. Secondly, the reasoning was not wanting the clothes and apparel to be connected with mountain climbing only (Patagonia, n.d.). An interesting fact about their name, Patagonia, is that it can be pronounced in any language (Patagonia, n.d.).

According to their web site, Patagonia seems to be meeting the high standards they have set for themselves and keeping aligned with their mission. Since 2000 they have been involved in numerous initiatives that align with their mission. They even admit so of their shortcomings, early in the 2000s, on their own webpage where they speak about social responsibility,

After these several steps forward, we take a step back when we begin sourcing products in new factories that can produce them at a lower cost. The number of factories we work with balloons, and some of these subcontract work to other factories we know nothing about. We lose track of whom we do business with and what working conditions are like in many of our factories. For awhile we drop out of the FLA (Fair Labor Associations). (Patagonia, n.d.).

I think it is important for any company to admit where they might have had a misstep. In 2002 the company hired a manager of social responsibility and rejoined working with the FLA (Patagonia, n.d.).

The most recent controversy that Patagonia has faced is an ongoing issue with their wool providers. In 2015 PETA ran a story about a wool provider that Patagonia was using that was mistreating the sheep used for the wool production. Predictability, Patagonia then cut ties with that wool producer and created a new Patagonia Wool Standard for their providers (PETA, n.d.). In 2017 PETA ran another story that the new wool provider Patagonia was using was not meeting these new wool standards, and according to Peta’s website Patagonia also suspended their use of that company, but has not disclosed who they are currently using as their wool provider as of the end of 2018 (PETA, 2018).

It does seem odd, given the otherwise transparency of their organization, that Patagonia would keep their current wool provider a secret, but I also think that at times organizations like PETA will always find a flaw with any of the companies that Patagonia was using. This opinion is based on the fact that the wool providers Patagonia has been using since 2015 have been targets of PETA.

As a whole Patagonia is considered to be a good and ethical company. They also donate 1% of their sales to environmental organizations through their grant programs (Patagonia, n.d.). According to Good On You, a company that rates clothing and apparel organizations on how ethical they are considered a good company. Compare Patagonia with another similar outdoor apparel brand, North Face, who is rated lower than Patagonia in terms of being ethical (Wolfe, 2017). Good On You rates companies based on four different categories, how they treat their people (which includes their suppliers), how that company impacts the planet and the affects the company has on animals (Good On You, n.d.).

A final aspect of Patagonia that stood out to me is that they stand behind their products and will actually repair or replace their items if they become damaged. This is not something that is common especially in a clothing company. Most companies would rather you buy numerous items from them and not repair their items if they are damaged.

Patagonia also attempts to have their consumers think about the products before they buy them. In an interview with Ethical Systems on this topic, Yvon Chouinard was quoted as saying, “Think twice before you buy a product from us. Do you really need it or are you just bored and want to buy something?” (Guo, 2018).

 Price seems to be the only area that Patagonia seems they could have some improvement. Most of their items are significantly more expensive than you could find elsewhere, but at the same time, the quality might not be. Furthermore, the fact that the company would be willing to repair or replace an item that is damaged is also something to take into consideration. I do not have any suggestions for the organization as a whole for improvements. I would agree that Patagonia is an ethical organization, and they do appear to address issues as they arise and make every attempt to be involved with not only those directly involved in the company but the suppliers to their company. In an age where everything is more about consumerism, and doing things cheaper, Patagonia has stuck to their values of making the planet better and providing quality products.

References

• Good On You. (n.d.). How We Rate. Retrieved from Good On You: https://goodonyou.eco/how-we-rate/
• Guo, J. (2018, February 12). Company Snapshot: “Don’t Buy Our Products” – Ethics at Patagonia. Retrieved from Ethical Systems: https://www.ethicalsystems.org/content/company-snapshot-ethics-patagonia
• Patagonia. (n.d.). Environmental Grants and Support. Retrieved from Patagonia: https://www.patagonia.com/environmental-grants-and-support.html
• Patagonia. (n.d.). History of Patagonia - A Company Created by Yvon Chouinard. Retrieved from Patagonia: https://www.patagonia.com/company-history.html
• Patagonia. (n.d.). Patagonia and Social Responsibility in the Supply Chain: A History. Retrieved from Patagonia: https://www.patagonia.com/corporate-responsibility-history.html
• Patagonia. (n.d.). Patagonia's Mission Statement. Retrieved from Patagonia: https://www.patagonia.com/company-info.html
• PETA. (2018, November 19). PETA Calls Out Patagonia for Secrecy Around New Wool Source. Retrieved from PETA: https://www.peta.org/blog/peta-responds-patagonias-lack-concern-new-sheep-cruelty-expose/
• PETA. (n.d.). Another Patagonia-Approved Wool Producer Exposed. Retrieved from PETA: https://investigations.peta.org/another-patagonia-approved-wool-producer-exposed/
• Wolfe, I. (2017, September 25). How Ethical Is Patagonia? Retrieved from Good On You: https://goodonyou.eco/how-ethical-is-patagonia/