Working With Factories
Patagonia engages in a range of due diligence activities to promote fair labor practices and ensure good working conditions in our factories.
Below are a few of the key tools we use:
Supplier Workplace Code of Conduct
- The cornerstone of our Social and Environmental Responsibility program is our Supplier Workplace Code of Conduct and matching Benchmark document. Our code is based on International Labor Organization (ILO) core labor standards and requires compliance with all laws in each of the countries in which our factories operate.
- We developed this document to make our expectations clear to the factories manufacturing our products. Patagonia does not own any factories, however, we work in close partnerships with factories that are like minded and share our philosophy. At Patagonia, we continuously push ourselves to “lead an examined life” and improve social and environmental conditions. We encourage the factories that make our products to do the same.
- Our Code of Conduct applies to every level of our supply chain from farm to garment factory, including all subcontractors and sub-suppliers. It outlines our policies on the following topics:
- Law and Code Compliance
- Child Labor
- Forced Labor
- Harassment, Abuse and Disciplinary Practices
- Freedom of Association and Collective Bargaining
- Employment Relationship
- Wages and Benefits
- Overtime Wages
- Hours of Work
- Health and Safety
- Animal Welfare
- Code Communication
Fair Labor Association (FLA)
- Patagonia is a founding member of the Fair Labor Association®. Our FLA® accreditation provides our customers with an extra layer of assurance and transparency, and provides us with an objective party perspective that enables us to evaluate where we are doing well and where we need to improve.
- Our Fair Labor Association affiliation and accreditation status are at the heart of our social responsibility program. As part of our membership obligations, the FLA randomly audits a sampling of our supply chain to assess the quality of our factory-monitoring program, helping us to identify opportunities for improvement. FLA audit results are posted for public access on the FLA website.
- As an added measure of accountability and transparency to the public, the FLA also audits our Social and Environmental Responsibility (SER) program at our headquarters in Ventura, California. In this process, we must prove we are following and reporting annually our compliance with the FLA’s Principles of Fair Labor and Responsible Sourcing. During the onsite audit of our SER program, FLA assessors review our factory files, audit reports, corrective-action plans, factory and internal trainings, data analysis and activities with NGOs. We are up for re-accreditation every three years and the full reports are posted for the public to see on the FLA’s website.
The Patagonia “4-Fold” Approach To Supply Chain Decisions
- Since the mid-2000s Patagonia has implemented a system to pre-screen factories before we place orders. We call it our “4-fold” approach. This process includes screening potential new suppliers for the ability to meet our (1) sourcing, (2) quality, (3) social and (4) environmental standards. The SER supply chain team works closely with our sourcing and quality departments in deciding whether or not to place an order with a new factory. It also collaborates with those departments on sourcing decisions for factories we currently employ. The SER supply chain team has full veto power over onboarding a new factory, as do the sourcing and quality teams. This is an effective process that screens out suppliers who cannot meet our strict “4-fold” set of standards. Our 4-fold screening approach is in place for all finished-goods factories and their subcontractors. In 2011, we introduced the same process for our raw materials fabric and trim suppliers (Tier 2). The “4-fold team” meets every week to make supply chain decisions.
Monitoring Factories, Mills & Farms
- The SER staff screens all new factories for: social and environmental compliance with local laws and union contracts (when applicable), the Patagonia Supplier Workplace Code of Conduct and the more detailed Benchmark document. Where standards vary, we adopt the standard most beneficial to factory workers. We also assess the factory’s SER management systems and train factory managers in ourCode of Conduct and other program requirements.
- Pre-screening is accomplished by either SER staff or a reputable third-party monitoring firm. This step entails filling out our questionnaires and a full social audit–including payroll analysis and interviews with workers in the local language.
- Our monitoring program was vetted and approved by the FLA as part of our accreditation process. Dedicated SER field staff visit our factories regularly to assess compliance with our Code of Conduct Benchmarks, local laws and collective bargaining agreements, if there are any. The team also follows up on corrective actions from previous audits and performs capacity-building sessions and/or concentrated remediation visits for specific SER concerns.
- We track the minimum or prevailing wages of each country in which we make products and work toward a higher fair or living wage in our cost negotiations with factories. We have found that many of our factories already pay above minimum wage to some or all of their workers. We are committed to achieving a fair wage for all people who make Patagonia products. To this end, we have established a Fair Trade Certified™ program, which is another step to our commitment of achieving living wage in our factories.
- We audit 100% of our finished-goods factories (Tier 1 of the supply chain) for social and environmental concerns. This includes most subcontractors for our primary cut-and-sew facilities. We either perform a social audit ourselves, hire a third-party monitoring firm or–to reduce audit fatigue in factories–co-audit with other brands or obtain recent audit reports from a credible source on the Fair Factories Clearinghouse database (see below) or from the factory itself. Patagonia pays for all social audits we schedule directly.
- We also monitor our largest raw-material suppliers (Tier 2 of the supply chain) and employ an audit and remediation process at these facilities similar to the one we use in Tier 1 factories. (See our Working With Mills Page for more information)
- Our Chemical and Environmental Impacts Program (CEIP) governs our environmental auditing program. We developed our Chemical and Environmental Impacts Program to manage the use of chemicals and environmental impacts in our global supply chain. The program covers: chemicals, waste, water use, energy use, greenhouse gasses and other air emissions. It requires manufacturing operations to comply with the strictest international consumer products legislation, as well as local laws. It also helps us recognize suppliers who apply best practices as environmentally responsible supply chain partners. Our Chemical and Environmental Impacts Program utilizes the latest industry-wide tools–including both the Facility Environmental Module and Chemicals Management Module of the Higg Index®. This enables us to leverage the work we’ve accomplished in collaborative groups, such as the Sustainable Apparel Coalition and the Outdoor Industry Association‘s Chemicals Management Working Group.
- Patagonia uses environmentally friendly materials whenever possible. These include materials derived from farms, such as organic cotton, Traceable Down, Tencell® lyocell, hemp and natural rubber. We are beginning to map supply chains to the farm level and, whenever possible, rely on certifications such as NSF Traceable Down Standard, GOTS, Organic Content Standard, and Fair Trade to assure the farms we use are meeting our standards.
- All substandard audit findings must be remediated in a timely manner. When an audit reveals problems that require in-depth analysis, our SER field staff (or a local expert consultant) discern the root cause of the problem and then decide whether or not to work long-term with the factory to solve it,. Remediating systemic problems can take time, resources and continuous monitoring.
- We view sustainable remediation as the most valuable outcome of our monitoring efforts. Thus, we spend most of our time helping factories to identify and implement impactful solutions to their biggest challenges. We often require factories to participate in specific training, education or continuous-improvement programs, which Patagonia helps pay for in part or full.
- We are proud to work with some of the most socially and environmentally responsible suppliers in the world. We recognize these factories’ high-level of performance and place them in a special category whereby they own and manage their monitoring programs. We meet regularly with these suppliers to receive updates and to share best practices and ideas to further advance our common efforts.
- SER staff evaluates factories on their performance, which helps us and them see where they stand on their journey toward corporate responsibility. Our internal scoring system rates risk and a factory’s level of SER commitment. We are also moving toward using the Sustainable Apparel Coalition’s Higg Index® as part of ourfactory performance evaluation. Our scoring and regular feedback system educates suppliers while setting brand expectations for continuous, long-term improvement of social and environmental performance.
- We exercise due diligence to prevent human trafficking and migrant labor issues within our supply chain. Our California Transparency in Supply Chains Act (SB657) disclosure speaks to how we monitor our factories for all forms of forced labor, including human trafficking and slavery. We are actively working to prevent and eliminate any instance of human trafficking in our Tier 2 supply chain, and have developed comprehensive standards for the employment of migrant workers and set remediation deadlines with our suppliers.
- We have an FLA-approved responsible factory exit policy that requires our SER, sourcing and quality teams to minimize impacts on workers when ending business with a factory. While we favor long-term relationships with our factories, should the need arise to quit a supplier, our teams work together to provide sufficient notice so as not to adversely impact the workforce within the factory.
Responsible Purchasing Practices Program
- Our Responsible Purchasing Practices Program guides us in making business decisions that minimize negative impacts on workers in our supply chain. These include refraining from disruptive acts, such as placing an order, then later, changing it dramatically; negotiating for unreasonably low prices; demanding short lead times; making late fabric deliveries and last-minute design changes. Such actions can result in excessive overtime hours for workers (beyond what our Code of Conduct or local laws allow), as well as layoffs, falsified payroll documents and/or non-payment of legal wages. We began implementing checks and balances on our own sourcing business decisions informally in the 1990s. Then in 2011, we began to develop a formal Responsible Purchasing Practices Program, as outlined in the FLA’s Principles of Fair Labor and Responsible Sourcing (Principle 8). We must meet five main requirements, and we have procedures in place with our sourcing and SER team to do so. We are committed to continuously improving our program and have expanded it beyond our sourcing department to include our supply planning and forecasting teams.
- We are a founding and fully accredited member of the Fair Labor Association®.
- We are a participant in the International Labour Organization's Better Work Program in Vietnam and Jordan.
- We also participate in other multi-stakeholder initiatives where possible. Past projects include FLA 3.0 and JO-IN.
- We are a member of the Fair Factories Clearinghouse (FFC), from which we obtain, and provide to other brands, third-party audit results of our factories. We also collaborate regularly with several brands on factory audits and other special engagements.
- A portion of our finished goods factories are Fair Trade Certified™. Fair Trade USA audits these factories, sets up a worker-management committee and monitors the premium we pay directly to workers through a bank account the workers control. How much extra we pay is determined by Fair Trade USA, which bases its calculation on what the factory pays its workers and what is considered a living wage in the area. Workers can use the money to raise their standard of living, including, if they choose, taking a cash bonus that moves them closer to a living wage.
- We are a member of the Outdoor Industry Association (OIA), and serve as chair for its Social Responsibility Working Group’s Education Task Force.
- The Footprint Chronicles® traces social and environmental impacts of our products and processes.
- We publish a complete finished goods factory list on our website.
- We publish our Code of Conduct, Code of Conduct Benchmarks and Migrant Worker Employment Standards on our website.
- Our blog, “The Cleanest Line®,” keeps our customers and others updated on current issues in supply chain social and environmental responsibility.
- Our e-commerce shopping site lists the social and environmental attributes of our products, including the names and whereabouts of factories where they were made.
- We have special web pages for our Fair Trade, migrant worker, California Transparency disclosure and Traceable Down (animal welfare) programs.
- Each year Patagonia SER and non-SER staff spend hundreds of hours sharing our work with other brands, NGOs, academics, students and customers via conferences, phone calls, industry working groups, trainings and other means. We embrace learning from our stakeholders and work to influence others to start or continue their journey toward improved environmental and social responsibility.