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UNIVERSIDAD ESAN

MAESTRÍA EN ADMINISTRACIÓN
A TIEMPO PARCIAL – 58 – LIMA – 2015-1 GRUPO 3
COURSE

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SUSTAINABILITY AND COMPETITIVE ADVANTAGE.
RETHINKING VALUE CREATION

INSTRUCTOR

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PAOLO TATICCHI, PHD

INDIVIDUAL REPORT

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CASE OF PATAGONIA INC.

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This report has been prepared for:

MIGUEL ANGEL RENTERIA CORONEL

1308897

Lima – 2016

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Report Contents About Environmental and Social Responsibility How do you assess Patagonia’s approach to sustainability? Is sustainability embedded in value-creation processes? Is sustainability contributing to build a competitive advantage? What is your evaluation of the sustainability reporting offered by Patagonia? Conclusion 3 4 5 6 7 8 P á g i n a 2 | 11 .

water. a global leader in sustainable apparel and teams from about 30 companies gathered in a workshop to assess their operations. are the most urgent concerns that the company Patagonia must address nowadays. meanwhile. Equal Opportunity. developing ways to harness our own different technologies to contribute to the environment is a major challenge. Global environmental problems. research & Development. economic: profit. Patagonia.) Learn more or access the program’s resources at http://www. use and care and finally the end-of-life of the product. cost savings. Social: Standard of Living. About Patagonia Inc. land.patagonia.About Environmental and Social Responsibility Patagonia and Social Responsibility in the Supply Chain About Patagonia Inc. Patagonia. environmental (Natural Resource Use Environmental Management pollution prevention (air. environmental and social imperatives. whether customers. waste). The company Patagonia. Patagonia recognizes that social responsibility is clearer to help achieve a sustainable world and society through technological innovation. From this point of view. packaging. shareholders and investors or others. Moreover. is an American clothing company founded by Yvon Chouinard in 1973. Patagonia is determined to fulfill its social responsibility of the company with respect to its various stakeholders. Inc.htm P á g i n a 3 | 11 . distribution. business partners. The assessment measured environmental impact throughout the supply chain. assessing the company from the design of a product. economic growth. Inc. The three spheres of sustainability. Sustainability Initiative A balance of economic. community. education. strives to create products and services that contribute to the preservation of the global environment.com/environmentalism. As a company in the manufacturing sector. It is essential to Patagonia continued commitment to remain a key player in global society and an example of efficient production. integration social and environmental concerns in their business operations and interactions with their stakeholders. manufacturing. To this end. believes that CSR initiatives are synonymous of good management and joint work with stakeholders to promote programs for the realization of sustainable growth for society.

which also means business expansion.How do you assess Patagonia’s approach to sustainability? Patagonia and Social Responsibility in the Supply Chain September 2014. Currently. innovative dyeing processes reduce 84% water-usage. Review: Its scope has been complete and has worked for all parties.pdf P á g i n a 4 | 11 . which makes that more than 5% of the used energy is generated on site. Since the business of manufacturing garments was considered a dirty business due to the excessive amount of water use and pollution. such garments which use with organic cotton.static/Sites-patagonia-us-Site/LibrarySites-PatagoniaShared/en_US/PDF-US/bcorp_annual_report_2014.com/on/demandware. It helps the global movement of entrepreneurs through business by solving social and environmental issues. 80 points are the minimum needed score to achieve certification out of 200. they understood that all parameters can change without taking into profitability. Community: 100% of suppliers were made transparent on websites and 40% of women are in management positions. It managed to reach high standards necessary to address social and environmental problems through programs and campaigns. It has invested 20 million to make 8 new projects. its providers got BlueSign standards (applied to advanced clothing production). The board includes independent members who represent the interests of the community. Learn more B Impact Assessment Score: at http://www. they receive or have received more than 650 investment applications. The company also extended the health benefits to part-time. achieving a good reputation. well performance and evaluation of supply chains and labor culture. Finally. 75% of their materials care about the environment. retail and warehouse staff. They count with LEED certification. B Impact Assessment (Audit Ventura Head). They have organic and recycled materials and also.patagonia. It increased its score from 107-116. 30% energy-consumption and 25% less CO2 emissions.

scu.Is sustainability embedded in value-creation processes? Patagonia and Social Responsibility in the Supply Chain Value Creation Processes for the Environment: It has reduced CO2 emissions by 25% through Dyeing processes. retail and warehouse staff. Value Creation Processes for Employees: medical benefits are granted for part-time. This spring. Besides. access to customers of their production processes will generate brand loyalty. and designed to last a long time. 50% of fulltime employees participate in external professional development. More than 25% of employees took time off for community service. 75% of the materials used care about the environment. In 1993. 1% of sales are donated to environmental NGOs. In 1994. people get top products and customers do not take into account whether companies are transparent or sustainable. More than 40% of the frontline management is women or from ethnic minorities. Learn more B Impact Assessment Score: at https://legacy. versatile. Processes Value Creation Society: 100% of its suppliers are transparent through websites. repair and reuse. Value Creation Processes for Customers: When generating value generation processes. Employees volunteer a total of 10. Value Creation Processes Supplier: They only accept suppliers which provide 100% organic cotton. Patagonia is still making the preservation of resources — natural and human — a priority. the company converted to organic cotton. re-imagine.424 hours on behalf of the company. Patagonia protects the environment through its clothing designs. a fabric woven from recycled soda bottles. Customers are aware of the production supply chains and NGOs also start feeling more attracted to that kind of company. It presents the initiative to recycle. fortunately. Many garments are made from Synchilla. even though it represented providers an increase in the price for organic cotton. They also offer repair the products at a fair price. Its processes are focused on providing highly durable products. promoting the “Buy less” campaign. reduce.edu/ethics/publications/iie/v8n1/synchilla. It also covers 80% of the coverage of health insurance premiums to full-time employees. They also have organic and recycled materials. (Repair: Publish information with solutions to clothing problems such as: removing stains from its pieces). sales increased by 25%. which are simple. the company changed its production process: They decided to use organic cotton. they pioneered in recycling plastic: it was the first company to produce fleece out of recycled plastic bottles.html P á g i n a 5 | 11 .

they in the dyeing audit the factories they work with and as a process. they have been able to reduced the energy consumption by over 25% and they also got that 5% of the energy is produced onsite. environmental criteria. B IMPACT ASSESSMENT less emnciones http://bimpactassessment. P á g i n a 6 | 11 STAGE 5: Creating Next Practice Platforms They were able to identify how renewable and non-renewable recources affect their business model. is innovative STAGE 3: Designing Sustainable Products and Services STAGE 4: Developing New Business Models The company was able to identify what its customers want and in that way they develop processes in charge of meeting their customers neeeds. Finally. is suppliers offer organic associated with other cotton. ability to certification redesign their (http://www. they deliver cleaner products. they have reduced considerably the use of water in comparison to the traditional methods which water this resource. Furthermore. according to the the company anticipates bluesign standard. among others and they various jointly create the Sustainable Apparel processes the Coalition which was in charge of creating an most harmful index to measure the business supply chain materials to the sustainability criteria. has developed companies to buy organic sources of raw cotton.usgbc. it has health and environmental code of colors safety standards and it also has a Social are blue gray and Responsibility of Raw Materials for which they black. It does not only become sustainable by changing its processes. since 1985. As a result. Regularly. have changed their materials such as technology so your clothes last organic materials. meets high evaluation of the life starndares: bluesign. during garment production (specifically for the dyeing process). Nowadays. they know They have how to pick their partners as in the case of identified their Adidas and Wallmart.org/certoperations to produce guide). mendiante a Besides. By changing their processes and adjusting their premises. Therefore. so have remarkable fact they audited 90% of the classified factories they were working on in 2010.net/. presents problems means have been environmental. new technologies were developed . carbon management and Patagonia. social responsibility and damaging of all. The company has also environment. its suppliers help them set and meet rigorous standards of social.Is sustainability contributing to build a competitive advantage? Patagonia and Social Responsibility in the Supply Chain SATGE 1 : Viewing Compliance as Opportunity STAGE 2: Making Value Chains Sustainable They have increased efficiency in the value chain. recycles old clothes to create other garments. but when helping other partners and suppliers change theirs. They also identified the serious environmental impact produced by using cotton in their processes and that's why they decided to work exclusively with organic cottom. and commissioned all in 1986 uses organic cotton. assured that all its partners and suppliers such as meet the same quality and environmental chemicals used standards as Patagonia does. also longer recycles its products. LEED cycle. with the must audit their factories to assess if they black the most meet the safety. Inc.

and these allow industries to use produced energy as sa byproduct.patagonia. but they also support other business to learn how to reduce their environmental impact by making the difference and revolving the way in which businesses perceive sustainability and being this one of the objectives of Patagonia: to teach their clients and other businesses on how they can help preserve the environment.com/on/demandware.static/Sites-patagonia-us-Site/LibrarySites-PatagoniaShared/en_US/PDF-US/bcorp_annual_report_2014.pdf P á g i n a 7 | 11 . In Patagonia. they realized that when creating long-lasting changes. compliance and transparency performance set for them as for other companies. Learn more B Impact Assessment Score: at http://www.environmental. not only do they improve sustainable operativity.

What is your evaluation of the sustainability reporting offered by Patagonia Patagonia and Social Responsibility in the Supply Chain P á g i n a 8 | 11 .

repair reuse. permite modest fee.000 and encourage them to that would make them pública para los próximos garments a year in make things last rather unsellable. reduce.deming.patagonia http://investors. make them aware of the without incurring reducir su dependencia de Currently. to repair warrantee what breaks and recycle what comes to the end of its useful life’ P á g i n a 9 | 11 Organisational Encoura Repurpose ge for society / sufficien environmen cy t Develop scale up solutions . Patagonia effects of their purchases damage to products la energía de la red repairs about 40.org/2016 . trying to the use of polybags market today. service center.com/releasedetail.sunpowe Source: https://hbr. re-imagine.com/ /06/companies-arechronicles/patagoniaseleaseid=610651 sustainable-businessworking-withplastic-packaging-ahttps://blog.org/ model-archetypeconsumers-tostudy-on-the2014/01/processencourage-sufficiency/ reduce-waste challenges-of-garmentthinking-at-patagonia/ delivery/ the company also Uses SunPower solar offers a repair Patagonia also asks if it is possible to panels. It presents the initiative to recycle. 25 años. Nevada than buying new. the most efficient program for their customers to “Not Buy” completely eliminate solar panels on the customers for a their jackets.Technological Maximise Material and energy efficiency Create value from waste Social Substitute with renewables and natural processes Deliver functionality rather than ownership Adopt a stewardship role Source: Source: Source: http://www. The company pledges to Product-oriented PSSLean Manufacturing ‘build useful things maintenace extended that last.cfm?r http://nancybocken.com/blog/footprintr. (manufacturing) their Reno.

the models are designed such that by creating the best quality products and promoting sustainable practices they are also creating a competitive advantage for themselves and maintaining profitability Environmental Differentiation Strategy of Patagonia: differentiation-strategy-of-patagonia at http://www.net/johannesmahlich/environmental- P á g i n a 10 | 11 . Their business and operating models are designed to support their mission that is based on doing good instead of generating profit.Conclusion Patagonia and Social Responsibility in the Supply Chain Patagonia is a unique company. However.slideshare.