Individual Report PATAGONIA Vfinal
Individual Report PATAGONIA Vfinal
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They have done many efforts to be as transparent as they are, however, there are
still some aspects left, for example certification standards related to the organic
cotton they use in the production of the garments are not registered for a
certified company, or it is not mentioned in their reports.
The sustainability and Corporate Social Responsibility Reports are not made
according to the Global Reporting Initiative (GRI).
The green marketing they use could be considered only as a way to show
customers how responsible they are and to attract attention from new users
concerned about the environment, which ultimately would result in winning new
customers and getting more sales.
Formentini, M. y Taticchi, P. (enero,2016). Corporate sustainability approaches and governance mechanisms in sustainable supply
chain management. Journal of Cleaner Production, 112 pp. 1920-1933.
2
http://csrcentral.com/patagonia-the-clothing-company-with-a-revolutionary-approach-to-csr-sustainability/
example the Common Thread Initiative, and identify how the stakeholders are
affected in the value-creation processes and the relation with sustainability:
Customers benefits because they get products of a higher quality which have a
larger duration (increases life period), so they save some money reducing
purchases. = Value creation for customers based on sustainability
Environment is benefited with the reduction of garments considered as waste,
before starting to reuse and recycle the products for other people or other users.
= Value creation for environment based on sustainability
Suppliers are affected because they would reduce their purchase orders, and
decrease sales. = Value destroyed for suppliers
On the other side, if this initiative considers suppliers as part of the program, they
could get the recycled products as part of the new production process, reducing
costs in some materials. = Value creation for suppliers based on sustainability.
Society benefits from a better environment, better ways of living for people who
dont have access to buy a new product and now can buy a used one. = Value
creation for society based on sustainability.
Employees could benefit because this program improves the image and the
reputation of the company, and the people who work there feel more satisfied.
They could also have more job positions in the different locations = Value
creation for employees based on sustainability.
Shareholders will also be affected in a positive way, because of the good
reputation of the company with this initiative. = Value creation for shareholders
based on sustainability.
As we can see, in all the value-creation process identified for Patagonia,
sustainability is embedded and takes a very important role becoming a critical
success factor in todays business models.
3. Is sustainability contributing to build a competitive advantage?
According to Michael Porter (1985), competitive advantage is the ability gained
through attributes and resources to perform at a higher level than others in the same
industry or market.
For Patagonia, there are many factors that contribute to build a competitive
advantage, but the most important is sustainability.
The main benefits of an organization addressing sustainability is the impact on the
companys image and brand, but it is also to deliver new sources of competitive
advantage, as the results from the survey to the first 500 companies in fortune are
shown3.
MIT Sloan Management Review, Sustainability and Competitive advantage. Maurice Berns, Andrew Townend, Zayna Khayat,
Balu Balagopal, Martin Reeves, Michael S. Hopkins and Nina Kruschwitz. Fall 2009. Vol. 51 N 1.
Patagonia is famous for putting sustainability ahead of profit, and this strong
commitment to the environment and society and the future of the planet brings along
crucial strategies which lead the company to have better financial performance.
For example becoming a B corporation releases the company from getting the
highest returns only for shareholders and instead managing their business
considering all the stakeholders including society, environment, customers,
employees, suppliers, etc.
In order to become sustainable, Patagonia is following the five stages proposed by
Nimudolu4, in viewing compliance as opportunity to experiment with sustainable
technologies, making value chains sustainable, as well as the design of their
products, developing new business models and creating next-practice plattforms.
Patagonia takes action to achieve its mission in every part of the value chain scheme.
Their programs and initiatives are effective mainly because of their ethics related to
environmental conservation and corporate responsibility which is integrated into the
companys marketing communications. They enroll the customers and make them
part of a community to strengthen the bond between company and customer,
Patagonia has to live the published values and the customer is committed to act and
consume ethically. Being ethic its a new source of competitive advantage.
In a highly competitive industry, where increasing costs of raw material and
specialized processes to have a more efficient use of resources, improving labor
conditions, among others, lead to increase prices of the products for over 20%.
Nevertheless, Patagonia has increased its revenues and profits, taking advantage of
all the attributes and resources that allows having a better performance than the
competitors.
4. What is your evaluation of the sustainability reporting offered by Patagonia?
Patagonia does not report according to the Global Reporting Initiative (GRI).
However, it elaborates a report named: Environmental + Social initiatives, published
on the internet, in which they display all the activities, programs, initiatives, and
relevant facts for the company during one year.
Contrasting the Patagonias Report to The Global Reporting Initiative:
It does not include all the four principles for defining report content:
4
Stakeholder inclusiveness
Sustainability context
Materiality
Completeness
Strategy and analysis: it analyses the performance of the company, but the report
does not include target for the next years and goals for the coming 3-5 years, it
only reports the actions made during the reporting period.
Organizational profile: Not included
Identified material aspects and boundaries: not included
Stakeholder engagement: not included as specific
Report profile: not included
Governance: not mentioned directly but is involved in some of the actions and
programs carried out by the company
Ethics and integrity: Its not mentioned directly but is involved in all of the
actions and programs carried out by the company.
In conclusion, although the Patagonias report has relevant information about all the
practices, activities, initiatives and results of programs developed during the reporting
period, it is not complete about displaying more accurate information for all the
stakeholders. It is important to identify to all the stakeholders and material topics to
reflect economic, environmental and social impacts to assess the performance of the
organization. Also, it is necessary to have a balance to get a general view of the business
and not only the good practices. In my opinion, it would be important that this kind of
report would include some failures or difficulties that the company had passed through
in order to learn from them or emphasize the efforts on those aspects and continue
improving their processes to keep sustainability as part of the competitive advantage.
Appendix 1:
BIBLIOGRAPHY
1. Formentini, M. y Taticchi, P. (enero,2016). Corporate sustainability approaches
and governance mechanisms in sustainable supply chain management. Journal
of Cleaner Production, 112 pp. 1920-1933.
2. MIT Sloan Management Review, Sustainability and Competitive advantage.
Maurice Berns, Andrew Townend, Zayna Khayat, Balu Balagopal, Martin
Reeves, Michael S. Hopkins and Nina Kruschwitz. Fall 2009. Vol. 51 N 1.
3. Nidumolu et Al, HBR, September 2009
Internet sources
http://www.patagonia.ca/company-info.html
http://www.patagonia.com/on/demandware.static/Sites-patagonia-us-Site/Library-SitesPatagoniaShared/en_US/PDF-US/patagonia-enviro-initiatives-2015.pdf
https://danielsethics.mgt.unm.edu/pdf/patagonia.pdf
http://csrcentral.com/patagonia-the-clothing-company-with-a-revolutionary-approachto-csr-sustainability/
https://www.youtube.com/watch?v=WexueycQgmY
https://bizgovsoc4.wordpress.com/2012/11/11/paper-2-patagonia-a-kantian-perspective/
http://www.expoknews.com/caso-de-exito-de-rse-patagonia/
https://www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principlesand-Standard-Disclosures.pdf
the 2015 sustainability Leaders GlobeScan-SustainAbility-Survey-.pdf
http://www.revistaestrategas.com.ar/noticia-787.html