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How Patagonia Responded to Finding Slavery in Their Supply Chain

by: Rosie Dalton | 4 years ago | Features

Image: the Patagonia logo is based off of Monte Fitzy Roy, also known as Cerro Chalten, Cerro Fitz Roy, or simply Mount Fitz Roy, which is a mountain located near El Chalten village, in the Southern Patagonian Ice Field in Patagonia, on the border between Argentina and Chile. Image source.

Patagonia is one of those companies that’s been around for such a long time (the 1970s, to be precise) and is so committed to environmental and social responsibility at all levels, that they’ve essentially become a wealth of information on the topic. The company’s VP of Environmental Initiatives, Rick Ridgeway is about as knowledgeable about issues like sustainability and transparency as they come. So, of course, we jumped at the opportunity to sit down with Rick last time he was in Sydney for a few days. All the way from California, we asked him about what’s on the cards next for Patagonia, what still needs to be done in the field of ethical fashion, and that infamous slavery incident.

Rosie Dalton: So I’ve read about how Patagonia discovered slave labour in its supply chain during 2011, and I’m really interested in the ways you dealt with that issue.
Rick Ridgeway: I was in the meeting when members of our production team (the ones who had made this discovery) first presented it to the company’s senior executives.

Rosie: How scary!
Rick: Yeah, our eyes were like this [wide eyed]. So, at the end of their presentation, our immediate response was that this was the kind of issue we’d be very unlikely to solve on our own. That it was the kind of issue to require multi stakeholder inclusion. In this case, we were going to have to partner with the Taiwanese government — because the factories were in Taiwan — and we were going to have to partner with the suppliers themselves, in a way that would make them feel safe about actually trying to [address] this.

Rosie: That sounds like a major undertaking.
Rick: It was and we knew that we had to try and avoid threatening [our suppliers]. We couldn’t go to them and say: ‘If you don’t fix this, we’re not going to work with you anymore’. We had to approach it as a partnership, so that’s what we did. After that very initial meeting, we knew we had to finish our due diligence; to let them know, that we were going public. We weren’t going to hide this, or keep it quiet. We decided to tell people we’d discovered slaves working in Patagonia’s supply chain and that we were going to fix it. So that’s what we did and it actually worked really well. We’re working closely with the Taiwanese government and some of the suppliers have already implemented changes to get rid of this issue, while others are in the process of fixing it.

Rosie: What were Patagonia’s main takeaways from that experience?
Rick: Well, it confirmed two really important things for us. Firstly that, in terms of relationships within the supply chain, the model that works best is the model of equal partnership. This is the model that recognises the days of colonialism belong to the last century. And secondly, that transparency should be defined as a willingness and openness to communicate to all of your stakeholders — and that includes, foremost, the public — what we’re doing that’s good; what we’re doing that’s bad and what we’re doing to fix it.

Rosie: Patagonia’s approach to this issue was really quite different to that of many other companies, then?
Rick: Well, when you leave a meeting like that, you leave feeling good —because you know that you’re on the right track. You walk out feeling energised; rather than thinking, ‘holy shit, how are we going to keep a lid on this?’ The other important thing to point out here is that this problem resided in the second and third tier of our supply chain — it resided in the mills and dye houses in Taiwan. It didn’t reside with the companies that we had contracted relationships with, but with the companies that they had contracted. So we mapped out the supply chain; we knew who all the people were in the second and third tiers and we went out and established relationships with them; relationships of equal partnership. It’s important to make it a place of inclusion, because you need to make it safe for them to have these discussions with you. They didn’t even think that this [slavery] was an issue, because they just didn’t view the world that way.

Rosie: I suppose that, for them, it’s just business.
Rick: Exactly. So not only did we not hide behind our contracted employers, but we were also actively mapping out the whole thing to find out where the problems were. We did our audits into those lower tiers and we discovered these issues, which cost us a lot of money.

Rosie: Of course, because there is so much involved.
Rick: Yes and we thought it was important to map it all the way to the source. In the case of our down jackets, for example, we know where every feather comes from — and that’s hard to do. With all our fibres, we want to take it right down to every cotton farm, right down to every sheep farm. It is very costly, but it’s the only way to really know for sure how much harm you’re doing and what the issues are. Of course, we still have a ways to go, but we’re increasingly doing a better job at it and I really do think that we’re farther along that path than any other apparel company of our size. We’re really trying to show leadership in this.

Rosie: Patagonia’s leadership also shows in your involvement with the Sustainable Apparel Coalition. Can you tell me a bit about that?
Rick: Cofounding the Sustainable Apparel Coalition was another really important thing we’ve done to manage our supply chain. We came up with the idea for developing standardised tools for apparel companies; to measure environmental and social labour impact in the supply chain. The effort started in 2010 and it came from the recognition that we needed better measurement tools and that those tools would be strongest if they were standardised. Two things happen when you do that. One, you create industry benchmarks, so you know where you stand alongside other companies. And the second thing is that it creates enormous efficiencies for the suppliers themselves. What has been 160 different assessments to complete is now only one.

Rosie: That must make an enormous difference for everyone.
Rick: Yes and we pulled that off. So now 40% of the entire apparel and footwear industry on planet earth is using that standardised HIGG measure. And we’re estimating that — when we finish the job of scaling this — we will have saved the industry about 10% of global profit for apparel in the entire world. Just in terms of reduced cost of assessments. So, it’s a direct measure of the business value of committing to sustainability. In this case, it’s just as simple as committing to standardised measurement.

Rosie: It’s a very simple idea, but not necessarily easy to pull off.
Rick: No, it was a huge amount of work to cajole everybody and I had to do that myself; it was a personal task. We started off with only a dozen companies and now we have nearly 200 companies, representing somewhere around 400 different apparel brands.

Rosie: That must require a huge amount of cooperation from a lot of people.
Rick: We knew even before we started this effort that — just like our issue with slaves — it had to be multi-stakeholder. That it had to include not just representation, but participation from the leading NGOs, universities and government agencies representing the appropriate parts of global governments. So we did that, right from the beginning; we brought everybody in.

Rosie: What are some other things that you think governments and industry bodies still need to do?
Rick: Well, so far we’ve got 40% of the industry [involved in the Sustainable Apparel Coalition], but we need 100%. And, as something like this grows, it gets increasingly difficult to get the second half in, because they are already the people that don’t give a shit. It gets harder and harder to bring them in, unless the government orders them to. So that’s kind of like our ultimate play — we want government to take over this whole thing, because the end game has to be government and policy.

Rosie: What’s next for Patagonia then?
Rick: Well right now we’re getting our cotton from farms that are watered by rainfall, that have responsible catchment and are, of course, organic. But now we’re telling ourselves that’s not good enough. We’re starting to realise there are potentially other ways of growing cotton that could promote healthier soils. There are actually agricultural ways to promote soil health, which begin to allow soil to absorb carbon right out of the atmosphere. So now we’re investigating that. We are already getting our wool that way — and we’re starting to measure the amount of carbon that’s being sucked into the ground, by analysing these kinds of grazing practices.

Rosie: Wow, that’s so interesting.
Rick: Yeah, because the hope there is that, if companies like us start to convert to these kind of protocols, we can offer a real partial solution to climate change. So that’s the next frontier for us. And it all comes down to asking questions and trying to learn more.

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