Cara Chacon, Patagonias director of social & environmental responsibility

Cara Chacon, Patagonia's director of social & environmental responsibility

Patagonia's goal of building "the world’s most socially and environmentally responsible supply chain" has made the outdoor wear specialist something of a pioneer in its industry. Cara Chacon, the group's director of social & environmental responsibility, however, is quick to admit that despite its successes, the company is far from perfect.

Patagonia's recent appointment of a head of environmental activism is something new for the apparel industry: a large brand advocating and encouraging activism in a sector constantly battling to meet sustainability and CSR requirements.

Not so for a company seemingly unafraid to stick its head above the parapet. Instead, it offers insight into a business that has had a clear direction on its ethical and sustainability goals since 1993, when it became the first outdoor clothing manufacturer to use fleece made from post consumer recycled (PCR) plastic soda bottles. In 1996 it switched to using organically grown cotton in all of its cotton products.

As a founder member of the Sustainable Apparel Coalition (SAC), Patagonia has played a pivotal role in bringing together brands and retailers to work together to cut the environmental impact of their operations; the company's entire product line is recyclable through its Common Threads Partnership; and it was one of the first major outdoor clothing companies to work with Fair Trade USA on its Fair Trade Certified apparel, which is being expanded this autumn.

“We definitely feel a weight of responsibility,” Chacon explains. “But we are far from perfect. We are facing enormous challenges, as are other brands, but we're trying really really hard to solve the CSR challenges of our time in very meaningful and scalable ways. And we're doing that with limited resources. We are not a billion dollar company so we have limitations like everyone else. There is definitely pressure, but we try to keep our eye on the prize.”

And that prize, Chacon says, is a return of goodwill for “doing the right thing”, whether in the form of good sales or good press. She also suggests there is financial strength in numbers: “Nobody is going to adopt that model if they don't make money so it's really important we stay profitable...and that will convince others to try our business model.”

And, for the most part, Patagonia has succeeded in doing just that through innovations such as its Yulex wetsuits, based on a renewable bio-rubber, which were made available to the global wetsuit industry rather than being kept proprietary. It also launched its '$20 Million & Change' programme two years ago, an internal fund to help like-minded, responsible start-up companies bring about positive benefit to the environment.

And the results are showing. Privately-held Patagonia is set to record its most profitable year in history in 2015, according to Fortune, with sales expected to reach US$750m. Around 1% of this is donated to environmental causes.

Sizing up CSR

The company is certainly putting its money where its mouth is where corporate social responsibility is concerned, and has increased its CSR budget nine-fold over the last five years, at the same time as increasing the size of its team.

Since 2010, Patagonia's social and environmental division has grown to include teams focusing on the '$20m & Change' fund, an environmental initiative team running its '1% for the Planet' programme, and a team working on its campaigns and activism programme. 

“Investments have been made in hiring really expert staff, so they can hit the ground running and really affect change quickly, versus hiring people we have to train. We just can't do that right now, the stakes are too high,” Chacon explains. “If you hire the right people, you can really move forward fast, and that's what we're trying to do.”

This is illustrated by a recent project in Taiwan where, following the discovery of modern slavery at some suppliers, a new set of standards was established for migrant workers - which has since been rolled out to its entire supply chain, and shared with other companies by independent monitoring organisation Verité. Chacon says they will “keep digging” to ensure this is not an issue elsewhere. 

Sourcing ethics

At present, Patagonia sources from countries including China, Vietnam, Bangladesh, India, Sri Lanka, and Japan, as well as Belgium, Poland and Italy. Cotton is domestically sourced in the US, from Texas. Last month the company cut ties with its Argentinian wool supplier, Ovis 21, after a PETA investigation exposed "extreme cruelty" towards lambs and sheep.

Its supply chain is screened regularly for new and current factories by Patagonia's sourcing and social and environmental teams.

“They all work together and agree on who has met our standards. All have a veto power over a new factory and that keeps us out of the poor performers and it's a very powerful process. So if social and environmental responsibility says no, the sourcing team has to look for another factory.”

She adds: “What we have found is that if you engage and place orders with a supplier that cares about their workers and their environmental impact, then guess what, you get everything else you want. You get the quality and you get the capabilities. It may cost a little bit more but in the end it's going to pay off because your teams aren't spending as much time travelling out there to fix problems.”

Myanmar, “is not yet ready for Patagonia”, Chacon says, due to issues surrounding wages, infrastructure, and in particular, environmental and labour laws.

“You need that foundation. If you go into [Myanmar], you really need to have a lot of resources to turn things around, to educate suppliers, and it's just too much work right now for us. We would rather not consider going in there and channelling our sourcing team right now. There's more to be done before we would consider going in there.”

Technology and innovation

Aside from its sourcing commitments, Patagonia has been busy investing in technology in order to stay ahead of the game when it comes to innovation. Earlier this year, the company acquired Beyond Surface Technologies, a fast growing Swiss company developing textile treatments for outdoor apparel based on natural raw materials. And last year, it invested in sustainable textile processor CO2Nexus.

Recent innovations by the group have included a 100% organic denim collection, and baselayer Merino Air - the industry's first fusion of sustainably sourced wool and cutting-edge technology.

“All of our efforts come from our deep desire to solve the environmental crisis. We're trying really hard every day to set product goals, supply chain goals, and our own brand goals to solve that problem and that is amplifying some of our successes, but also some of our failures, as with the PETA [Argentinian wool] campaign.”

There was further negativity earlier this year at the Outdoor Retailer show in Salt Lake City, with some grumbling from brands over the development and subsequent “confusion” of two down standards, one from Patagonia, which has since been rolled out to the trade by public health and safety organisation NSF International, and the other from The North Face.

Chacon explains that the slow development of an industry-wide standard prompted Patagonia to create its Traceable Down Standard (TDS), unaware The North Face was also creating its own Responsible Down Standard (RDS).

“It is what it is and we have two standards now. We were already creating it, we'd already audited our whole supply chain with it and it wouldn't make sense to move over to the RDS. We did try to converge the two, all the brands did, but it was very, very hard; we just couldn't.”

Chacon also dismisses criticism that the two-pronged standard, for both collective and vertical supply chains, is too hard to achieve. “It's just not true. The performance level is very achievable, and if you're in a more vertical oriented industrial supply chain then you use the other level. It's an interesting issue in the industry, but we're working on a responsible wool standard with all the brands right now and we're very hopeful the standard will also have a very high level of consumer assurance.”

CSR re-shaping the sector

So what does the future hold? “Reading the tea leaves and seeing that in 2030/2050 the apparel industry is going to look very different, [our innovation] is preparing us for that, and hopefully inspiring other companies to also start that journey. If everyone starts including sustainability in innovation, we will make a collective impact.

“What you can expect from us is a full sustainable supply chain where social, environmental and animal welfare are all being looked at, all the way back to the farm. We're going to start tackling that enormous flock of work. We're already tracing back to the raw materials, fabric and trim level, and animal welfare at the farm level, and there is a lot of work going on with organic cotton and Fairtrade, but we want to do more, so I am working on a plan of what that looks like. That's the next big thing for us.”