Responsible Purchasing Practices
We work with our supply chain partners to uphold business practices that support critical social and environmental standards.
Why
A brand’s purchasing practices can have serious implications on a supplier’s workforce and workplace conditions. Purchasing practices is how we describe working with a factory over the life cycle of a product. It can include everything from designing and developing products to placing orders to forecasting and negotiating costs. When done poorly or not enforced, our suppliers’ factories can be put in compromising situations—forcing them to underpay workers, impose excessive hours and unsafe working conditions, conduct layoffs or employ unauthorized subcontractors—just to meet buyer demands. For example, if we told a supplier we wanted to make 200,000 jackets but later changed our minds to only 100,000, they’d be left with excess fabric, less revenue than anticipated and insufficient work for employees they’d hired. These types of decisions affect all parties involved and emphasize the importance of responsible practices.
Responsible Purchasing Practices are a company's commitment to establishing and implementing policies that consider the needs of both the brand and supplier to create a fair and mutually beneficial partnership. Examples of Responsible Purchasing Practices include clearly defining and adhering to agreed-upon order quantities, payment and terms; providing the supplier with enough lead time and technical details to create the product; and the brand and supplier taking on the shared duty of social and environmental responsibility.
Ethical purchasing is at the heart of social responsibility and any worker well-being or environmental impact programs brands may have. Our purchasing practices can help or hinder our suppliers’ ability to uphold business practices that support critical social and environmental standards. It’s an underdiscussed topic among brands, especially in the apparel industry. That’s why we believe these conversations must go beyond the factory and be more widely shared, so Responsible Purchasing Practices become the norm rather than the exception.
Where We Are
The work of establishing and maintaining Responsible Purchasing Practices goes beyond a single department. It's a company-wide initiative that requires commitment from the CEO, executives and teams across the organization: planning/forecasting, design, development, sourcing, production, materials, finance, and social and environmental impact.
At Patagonia, this work has been front and center in conversations with our leadership team as well as at weekly supplier evaluation meetings, which we started 10 years ago. At these sessions, we discuss specific issues from pre-existing suppliers and carefully vet potential new suppliers. We also formed a Responsible Purchasing Practices taskforce, with representatives from various departments, to examine specific gaps in our ethical purchasing practices and assess what could be improved.
As a founding and accredited member of the Fair Labor Association (FLA), an international organization promoting workers’ rights, Patagonia’s Responsible Purchasing Practices program is also audited and evaluated by an objective third party. The FLA holds us accountable to their principles and monitors our progress annually.
Our commitment to Responsible Purchasing Practices extends outside our brand, playing an active role in industry discussions to help motivate more brands to implement these practices.
With the impacts of the COVID-19 pandemic and understanding the importance of objective evaluations, we have also moved from an internal supplier feedback program to a strategic partnership with the Better Buying Institute (BBI). BBI was launched in 2019 to promote responsible purchasing practices and give suppliers an opportunity to grade brand performance. We use the BBI feedback results from both our finished goods and materials suppliers to identify and communicate gaps in Responsible Purchasing Practices to our teams, then work to address them.
What’s Next
Responsible Purchasing Practices requires continual improvements. Using the reports from the BBI and FLA, as well as constant open dialogue with our suppliers, we’re working to improve individual Responsible Purchasing Practices targets, like narrowing the gap between forecasted and actual orders.
After the pandemic disrupted our regular taskforce meetings, we’re also restarting those sessions to keep communication open between our internal teams and factory partners. And to ensure all our employees are aligned on our commitments and current practices, we will roll out refreshed internal training, prepared with BBI, and continue working with the FLA, BBI and the larger industry to increase awareness on Responsible Purchasing Practices.
