In 2014, the Financial Times reported that nearly 90% of Harvard Business School students purchased the infamous Patagonia fleece1. Most of us purchase the fleece for warmth, style, and community. Only a few of us purchase them because of Patagonia’s intentionality in building an eco-friendly brand in response to a pressing megatrend. Climate change can both be attributed to and directly impacts Patagonia. Therefore, Patagonia should care about taking action through existing and new initiatives that address the issue for its supply chain.
The carbon footprint of my fleece
The $3 trillion apparel industry is responsible for 10% of global carbon emissions, and ranks second to oil as the most polluting industrial business2. Cotton and polyester are the two most pervasive natural fibers in apparel production3. Each cotton T-shirt consumes 2,700 liters of water in production, enough to satisfy a human for 2.5 years. In 2015, polyester production for textiles resulted in Greenhouse gas (GHG) emissions equivalent to 185 coal power plants4.
Patagonia should care
Patagonia is an outdoors apparel company with $600M in annual revenues5. CEO Rose Marcario should be concerned with this megatrend for three reasons. First, she manages a complex, global supply chain network, vulnerable to the impacts of climate change6. Supply chain risk is contingent on how each country manages climate change with additional external factors such as political stability, governance, and development7.
Figure A 8
Nearly two-thirds of Patagonia’s factories and textile mills reside in developing countries, prone to accelerated impact9. The fiber and yarn production processes alone comprise 36% of the total GHG emissions10. Sixty percent of the world’s population lives in these countries where increased temperatures would be disastrous to the population and reduce labor supply11. Additionally, water shortages in these countries will inhibit the firm’s cotton production12. These effects are amplified when work-in-process inventories need to be transported cross-seas. Climate change impacts each component of the supply chain.
Second, management needs to care because climate change will ultimately reduce global demand for Patagonia’s core products, the jackets, increasing excess inventory. Retailers across the industry, reported a 30% decline in sales for December 2015 and beyond due to the lingering warmth 13,14. Finally, the impact of climate change aligns with the company’s mission to “cause no unnecessary harm15.”
Patagonia cares – the Triple Bottom Line
Patagonia established the triple bottom line (Profit, People, Planet) in the late 1990s as its primary measure of success. The company website acknowledges, “We make products using fossil fuels, built in factories that use water and other resources, create waste and emit carbon into the air16.” As an industry, the first step to creating change is recognition and measurement of the issue.
In 1996, Patagonia shifted production practices to create apparel from recycled polyester and organic cotton17. The company has launched various initiatives including Footprint Chronicles, Materials Sourcing, and Worn to Wear. In the short term, the Worn to Wear initiative, where employees fix broken Patagonia gear, perpetuates the longevity of Patagonia clothing18. The Footprint Chronicles is a map that creates traceability in the supply chain19. For the long-term, Patagonia has changed the raw materials used in the supply chain to incorporate more durable natural fibers such as hemp and organic cotton19. Moreover, the firm altered its denim fabric dying methodology through dyestuffs that use 84% less water, 30% less energy, and emit 25% fewer carbon emissions than the traditional dyes20. These initiatives reduce per person GHG emissions due to lower garment turnover.
Patagonia can care more – a deeper commitment to improvement
While Patagonia is an industry pioneer in climate change initiatives, there are observable areas of improvement that management should address. In the short term, the company can engage retail employees to transfer knowledge about the supply chain to the end-consumer. First-hand experience indicates that consumers are not properly educated about the positive impact of Patagonia’s supply chain. A training program to increase awareness would “accommodate” the megatrend through building conscientious consumption at the end of the supply chain.
In the long term, Patagonia ought to focus on the negative impact of transportation in its supply chain. The firm has engaged in ways to reduce GHG emissions at most stages in the supply chain except transportation. While tactically more challenging, relocating the Asia facilities to South America or other geographically closer areas will reduce the transportation carbon footprint.
Patagonia’s environmental efforts are admirable, but beget the following questions: (1) European corporations have consistently demonstrated a greater ability to reduce their carbon footprint through 100% commitment to closed loop production and supply chain management. Why is Patagonia lagging relative to its counterparts? (2) What’s preventing the firm from leveraging its industry leadership to lobby and shape policy around carbon caps for apparel firms?
1Elizabeth Paton, “MBA chic on the business school campus,” Financial Times, January 21, 2014, [https://www.ft.com/content/19ca340c-7d0b-11e3-a579-00144feabdc0], acceded November 2017.
2,4 James Conca, “Making Climate Change Fashionable – The Garment Industry Takes On Global Warming,” Forbes News, December 3, 2015,
[https://www.forbes.com/sites/jamesconca/2015/12/03/making-climate-change-fashionable-the-garment-industry-takes-on-global-warming/#e93ef3879e41], accessed November 2017.
3Luz Claudio, “Waste Couture: Environmental Impact of the Clothing Industry,” Environmental Health Perspective, 115,9 (2007), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1964887/, accessed November 2017.
5World Resources Institute. “The Apparel Industry’s Environmental Impact in 6 Graphics.” http://www.wri.org/blog/2017/07/apparel-industrys-environmental-impact-6-graphics, accessed November 2017.
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8Cooper Hewitt. “Infographic: Environmental Impact of the Textiles Industry.” https://www.cooperhewitt.org/2016/11/08/infographic-environmental-impacts-of-the-textile-industry/, accessed November 2017.
9Patagonia. “The Footprint Chronicles.” http://www.patagonia.com/footprint.html, accessed November 2017.
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11United Nations Climate Change. “Developing Countries Need Urgent Support to Adapt to Climate Change.” http://newsroom.unfccc.int/unfccc-newsroom/developing-countries-need-urgent-support-to-adapt-to-climate-change/, accessed November 2017.
12United Nations Global Impact. “Climate Change and the Global Water Crisis: What Businesses Need to Know and Do.” https://ceowatermandate.org/files/research/UNGC-PI_climate-water_whitepaper_FINAL.pdf, accessed November 2017.
13Hiroki Tabuchi, “Retailers Feel the Heat of Lost Winter Clothing Sales,” New York Times, December 15, 2015, https://www.nytimes.com/2015/12/16/business/retailers-feel-the-heat-of-lost-winter-clothing-sales.html?_r=1, accessed November 2017.
14Arthur Zaczkieicz. “Is Climate Change Killing the Seasonality Of Fashion Apparel Retailing?” Women’s Wear Daily, December 2016, http://wwd.com/business-news/business-features/climate-change-impact-fashion-apparel-10525390/, accessed November 2017.
15,16 Patagonia. “Patagonia’s Mission Statement.” http://www.patagonia.com/company-info.html, accessed November 2017.
17Geoffery Jones and Ben Gettinger, “Alternative Paths of Green Entrepreneurship: The Environmental Legacies of the North Face’s Doug Tompkins and Patagonia’s Yvon Chouinard,” HBS Working Paper No. 17-034, 2016.
18Patagonia. “Environmental and Social Initiatives: 2015.” http://www.patagonia.com/on/demandware.static/Sites-patagonia-us-Site/Library-Sites-PatagoniaShared/en_US/PDF-US/patagonia-enviro-initiatives-2015.pdf, accessed November 2017.
19Patagonia. “Our Business and Climate Change.” http://www.patagonia.com/climate-change.html, accessed November 2017.
19Lou Wang and Bin Shen. “A Product Line Analysis for Eco-Designed Fashion Products: Evidence from an Outdoor Sportswear Brand.” Sustainability, 9, (2017), http://www.mdpi.com/2071-1050/9/7/1136/htm#B46-sustainability-09-01136, accessed November 2017.
20Patagonia. “Environmental and Social Initiatives: 2015.” http://www.patagonia.com/on/demandware.static/Sites-patagonia-us-Site/Library-Sites-PatagoniaShared/en_US/PDF-US/patagonia-enviro-initiatives-2015.pdf, accessed November 2017.