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Patagonia: A Model for Long-Term Wealth Creation
BUS 3306-01 Business and Society - AY2025-T4
Written Assignment Unit 3
Instructor: Usha Palaniswamy
April 30, 2025
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Patagonia: A Model for Long-Term Wealth Creation
Nature of the Business
One prominent example of a company successfully embedding long-term wealth creation
through the preservation and expansion of human, social, and natural capital is Patagonia. This
well-known outdoor clothing and gear company specializes in products for activities such as
climbing, skiing, and surfing. Founded in 1973, Patagonia is recognized for its commitment to
environmental sustainability and social responsibility, making it a leader in corporate
responsibility within the apparel industry.
Long-Term Challenges
Patagonia faces significant challenges related to environmental degradation, resource
scarcity, and labor practices. The apparel industry is notorious for its substantial environmental
impact, including water pollution and high carbon emissions. Additionally, ensuring fair labor
practices across a global supply chain is a complex issue. As consumer awareness of these
challenges grows, companies like Patagonia must continuously adapt and innovate to maintain
their ethical standards and reputation.
Embedding Long-Term Wealth Creation
Through several key strategies, Patagonia has effectively embedded long-term wealth
creation into its operations. First, the company is dedicated to using sustainable materials and
practices. It uses organic cotton, recycled polyester, and other eco-friendly materials in its
products. This commitment helps preserve natural capital by reducing the environmental impact
of production. Furthermore, Patagonia supports initiatives to protect natural habitats by donating
1% of sales to environmental organizations through its "1% for the Planet" program. This not
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only enhances the company's image but also attracts environmentally conscious consumers
(Patagonia, 2023).
Another critical aspect of Patagonia's approach is its emphasis on transparency and fair
labor practices. The company actively works to ensure safe working conditions and fair wages
for all workers in its supply chain. By investing in social capital, Patagonia improves the lives of
workers, which builds trust with consumers who value ethical practices. This commitment
fosters customer loyalty and can lead to increased sales over time. Additionally, Patagonia
encourages customers to repair their gear instead of discarding it. The company offers repair
services and has launched the "Worn Wear" program, which promotes the resale of used
clothing. This initiative not only reduces waste but also fosters a culture of sustainability among
consumers, extending the life cycle of products and encouraging responsible consumption
(Patagonia, 2023).
Lastly, Patagonia takes an active role in advocating for environmental issues. The
company engages in campaigns to protect public lands and combat climate change. By aligning
its brand with social and environmental causes, Patagonia enhances its reputation and
strengthens customer loyalty. This advocacy not only helps the planet but also positions
Patagonia as a leader in the industry, contributing to long-term financial success (Patagonia,
2023).
In conclusion, Patagonia exemplifies how a company can effectively integrate long-term
wealth creation into its business model. Through its commitment to environmental sustainability,
ethical labor practices, and consumer engagement, Patagonia drives profitability and contributes
positively to society and the planet. This comprehensive approach ensures that Patagonia
remains a resilient and respected leader in the outdoor apparel industry.
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Word Count: 487
References
Patagonia. (2023). Our environmental & social initiatives. Retrieved from
https://www.patagonia.com/our-footprint/
