10 ways to make your business more profitable by being socially responsible

How sustainable is your business? Photo: Intel free Press/ Flickr.

The trend towards social responsibility in the workplace is driving many successful businesses to rethink their processes and products to ensure they are as ethical and sustainable as possible.

One business leading the way in this sector is Patagonia. The adventure wear retailer has been exploring new ways to build a more responsible supply chain for more than 25 years.

Jill Dumain, Patagonia’s director of environmental strategy, shared her tips on how to strive towards responsibility at the Global Conscious Business Summit in Sydney recently.

Here’s what she said about 10 key areas to focus on:

1. Engage all stakeholders, not just shareholders

To be profitable and successful in business, companies need to be engaged and committed to all stakeholders. The goal of conventional business is to maximize financial returns to shareholders.

The emerging fourth sector of a for-benefit business challenges this by asking companies to consider the planet, people and profits not only within their bottom line but ingrain this in the fabric of their business.

Without a healthy planet there are no shareholders, no customers and no employees. From the farmers that grow raw materials, to the workers at mills and factories that weave and sew fabrics, to employees and their families, to customers and the broader community, to the environment that makes our life and outdoor sports possible, Patagonia strives to be responsible for each element’s wellbeing.

2. Commit to thriving, not just surviving

In my opinion, a thriving business is one where all stakeholders are considered and engaged from the supply chain to the end consumer, from the planet to the people producing your product. The goal should be to thrive, not just survive.

It’s easy to become complacent and to do what’s convenient, rather than what’s right.

Regardless of your profession most people are faced with difficult decisions on a regular basis. We make over 35,000 conscious decisions each day and can often be presented with conflicts of interest in a business setting.

Working within corporate social responsibility you are acutely aware of taking great care with due diligence and analysing complex situations with the best social and environmental output in mind.

Yvon Chouinard, Patagonia’s founder has always said living the examined life is a pain in the butt. It isn’t convenient and often involves huge risks financially.

Ironically, however every time we’ve made a bold decision for the environment it has reaped financial rewards.

Do you know where your products come from? Photo: Ironchefbalara/ Flickr.

3. Know your supply chain

A good place to start is looking at your supply chain where factory workers, particularly within the manufacturing sector, are often the most vulnerable.

Our Fair Trade initiative was born out of a desire to improve the lives of the workers who make our products. Fair Trade means workers can improve their livelihoods through trade, not aid. We are focused on the sewing factories with our program but it also includes some organic cotton growers. It ensures workers receive fair compensation for their labor, helps to create safe working conditions and safeguards against the use of child labor. Recently, we have also made a bold move to eradicate human trafficking from our supply chain.

To further ensure the fair treatment and protection of people working in our textile mills, we have worked closely with bluesign technologies since 2000 to try and reduce the toxicity of the chemicals, dyes and finishes on our products that can have negative impacts on the environment.

On the animal front, we were called out for using force-fed and potentially live plucked geese in our down programs which prompted action from our end to dive deeper into that area of our supply chain. Now we can say with 100% confidence all our down products are completely traceable all the way to the farm where the parent of the goose or duck that provided our down lived – and we know there is no force feeding or live-plucking at any stage.

It can sound like a lot of administration to roll these types of commitments out. There’s no doubt about it, it requires a lot of time and resource, but the output is worth it for all involved. There are also competitive advantages of knowing and developing lasting relationships with suppliers.

4. Use the abundance of tools available to you

I often hear excuses as to why individuals and companies aren’t committing to greater corporate social responsibility practices – “I’m too big, too small, a privately owned company, a publicly traded company, I don’t have the backing of my senior leadership team and on and on.”

There is really no excuse. There is an abundance of measurement and standard setting tools available such as the B Corporation Assessment.

We partnered with Walmart as founding members to establish the Sustainable Apparel Coalition, which should dispel any barrier excuses. The focus of the Sustainable Apparel Coalition is The Higg Index – a suite of assessment tools that standardises the measurement of the environmental and social impacts of apparel and footwear products across the product life cycle and throughout the value chain.

It’s all about trial and error. Photo: Christoph Spiegl/ Flickr.

5. Be transparent and don’t be afraid to fail

Be honest and don’t be afraid to admit you haven’t got it all worked out. One of my first major experiences living this out was in 1991 when we found shocking environmental dangers from the conventional cotton we were using for our products.

Yvon Chouinard gave the ultimatum that Patagonia had to transition entirely to organic cotton or we’d quit selling cotton products. We dropped almost 30% of our cotton products in the first season, because the quality of the organic cotton and/or its substitutes weren’t there.

In 1996 “organic” was a word only known in small circles. We had to educate our supply chain and customers and we learned from our farmers. We took a risk with this new fiber that supply chain partners had not worked with before and was more expensive than conventional cotton.

In any context, if you haven’t got it right, admit it, commit to fixing it and see that commitment through.

6. Take responsibility for the full lifecycle of your product

Product stewardship, businesses taking responsibility for what happens to their products once a consumer is done with it, is extremely important.

There is a strong push for businesses within the electronics sector to take responsibility for recycling e-waste. Within the apparel industry we see our core challenge being countering fast fashion and the overall consumption that happens in the apparel industry.

One-way address this is through our Worn Wear program which sees us repair items and by making top quality garments which last a lifetime.

7. Educate your customers

Our vision is to turn our customers into activists. To have them care about the environment as much as we do. Ways we do this is by encouraging them to think about consumerism and to think about what is left behind in the supply chain post purchase.

We caused a scene a few years ago posting a bold one-page advertisement in the New York Times on the day of the largest retail sale with an image of one of our jackets and headline saying “Don’t Buy This Jacket” and also including the reasons why.

People need to realise that when they buy a product, they’re creating an impact on the planet at every step of that product’s production process – on farms, in mills and factories, with shipping and distribution, and more. Therefore want to encourage our customers to ask themselves whether they really need one of our garments before they make a purchase decision. It is also why we commit to making durable products that last a lifetime and guarantee our products for life.

Have your support network behind you. Photo: enterollc.com.

8. Support and stay connected with your drivers of your motivation

Never get too far removed from your source of inspiration, your raison d’etre. For us, it’s grassroots activists. They are so passionate and inspire us to use business as an agent for change.

We give 1% of our global sales to fund grassroots activists who take radical and strategic steps to protect habitat, oceans and waterways, wilderness and biodiversity. Giving this from our sales rather than profit means we are committed to giving no matter how strongly we perform.

Last year, we gave $US6.6 million to 770 environmental groups around the world. This is our niche and our driver in everything we do: supporting people on the front lines of the environmental crisis.

9. Turn blue sky thinking into action

We all love big, innovative, game-changing ideas however we need to commit and walk the talk. The threat of climate change and environmental degradation is not new however governments and businesses have been slow to act. It’s time to go beyond talking about what we could do and take action.

10. Share what you’ve learnt for change on a greater scale

For years, we’ve made enormous investments in our own supply chain for the benefit of the planet, and then worked proactively to share the benefits of those investments with other businesses in order to amplify and accelerate positive change in the biggest way possible.

Of course, there is also a business incentive to developing new markets, however participation by more companies lowers the price of materials and allows for greater scale.

We are seeing this starting to take place with our $20 Million & Change [Patagonia’s venture fund]. We are starting to have this coalition of companies that are all thinking, “How can we work together?” We all have the same issues—transportation, packaging, manufacturing, use of water, use of energy. These things are very basic. We can solve them. It’s only by a failure of imagination that we don’t. Business can be an agent for change.