Strategic CSR - Scale

Scale matters. Sure, it's nice that Patagonia cares about the environment, but time has taught us that the collective actions of smaller companies are only substantive when they alter the behavior of much larger companies. Among that subset of companies, there are none much larger and more influential than Walmart and, as the article in the url below reminds us, when Walmart acts, the whole country is affected:

 

"Walmart is taking the biggest step yet to overhaul ingredients used in America's food supply. The country's largest grocer said Wednesday that it was working to remove synthetic dyes from all its store-brand foods, including Great Value, Marketside, Freshness Guaranteed and Bettergoods. Walmart also plans to eliminate 30 other ingredients, ranging from certain artificial sweeteners to preservatives."

Whatever the motivating factor and stakeholder influence, and clearly politics is influencing this decision, when Walmart decides to do something there is a ripple effect far beyond the firm and throughout its supply chain:

"Walmart's heft makes its plans likely to trigger further changes throughout the nation's food-supply chain, from ingredient suppliers to other food makers and retailers. Great Value alone is one of the largest consumer brands in the country, with billions of dollars in sales each year."

This influence has grown larger in recent years, as consumers shift to buying more store brands to save money:

"Retailers are boosting investment in their in-house brands, with Walmart last year launching Bettergoods, a food line with trendy flavors and more natural ingredients."

The article also reveals how long it can take shifting stakeholder values to influence corporate decisions:

"For years, Walmart's customer data has shown that more shoppers want simple, natural ingredients, said Scott Morris, senior vice president for food and consumable private brands at Walmart U.S. More than 50% of Walmart shoppers now flip over a food package to look at ingredients, he said."

But, when that decision is made, especially in a company Walmart's size, we have the opportunity to make meaningful progress:

"Walmart plans to tweak more than 1,000 products across its stores gradually, in part to give ingredient suppliers time to meet its volume and cost needs, Morris said. Supplies of natural ingredients are still constrained, but growing."

Have a good weekend

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e  

Strategic CSR Simulation: http://www.strategiccsrsim.com/

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In Nod to MAHA, Walmart Ditches Dyes, Other Artificial Ingredients in Its Food Brands

By Jesse Newman and Sarah Nassauer

October 2, 2025

The Wall Street Journal

https://www.wsj.com/business/retail/walmart-ditching-dyes-other-artificial-ingredients-in-its-food-brands-d475076d

 

Strategic CSR - Secondhand

The article in the first url below makes the case that secondhand clothes no longer carry the stigma they had in the past:

"Last year, [shoppers worldwide] spent $227 billion on secondhand apparel, accounting for nearly 10% of all global spending on clothes."

As well as "a growing online ecosystem for buying used, including eBay, ThredUp, Poshmark and other sites where customers can directly sell and purchase items," more mainstream retail brands are also beginning to incorporate "online resale offerings" into their range of clothes offered (such as "outdoor apparel maker Patagonia Inc and sneaker seller AllBirds Inc"). Such innovations are fueling the trend, which is anticipated to grow:

"Global secondhand fashion sales, which rose 15% in 2024 from the previous year, are projected to surpass $250 billion in 2025 and then exceed $300 billion in 2027."

Part of this trend reflects a rejection, by some, of the fast fashion business model, as noted in the article in the second url below, which also contains a visualization of the massive amounts of waste the industry produces (see also Strategic CSR – Slow(er) fashion):

"The U.S. throws away up to 11.3 million tons of textile waste each year – around 2,150 pieces of clothing each second."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e  

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Why Buying Thrift Clothes Is Getting More Appealing

By Zahra Hirji

March 19, 2025

Bloomberg

https://www.bloomberg.com/news/articles/2025-03-19/why-more-people-are-buying-thrifted-clothes

The Global Glut of Clothing Is an Environmental Crisis

By Rachael Dottle and Jackie Gu

Febaru 23, 2022

Bloomberg

https://www.bloomberg.com/graphics/2022-fashion-industry-environmental-impact/

 

Strategic CSR - Patagonia

The article in the url below provides some details on the opaque organizing structure that Yvon Chouinard created for Patagonia when he relinquished control of the company, in 2022 (different, but no doubt related, to its decision to restructure as a Benefit Corporation, in 2021; see Strategic CSR – Patagonia). As Chouinard announced at the time (somewhat inaccurately, but still worth reading), "Earth is now our only shareholder." I noted the decision when it became public, but did not understand anything about the scale and potential impact of the decision – something Patagonia deliberately does not advertise and, as illustrated in Chouinard's original statement, left vague:

"Here's how it works: 100% of the company's voting stock transfers to the Patagonia Purpose Trust, created to protect the company's values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis."

Right, as clear as mud, which brings us back to the article that is the focus of today's newsletter, which is the first somewhat detailed analysis of how things have been working out, ever since:

"Patagonia, the outdoor apparel brand, is funneling its profits to an array of groups working on everything from dam removal to voter registration. In total, a network of nonprofit organizations linked to the company has distributed more than $71 million since September 2022."

And from, moving forward:

"Patagonia paid an initial $50 million dividend to Holdfast in 2022. It made another payment to Holdfast last year. … Each year going forward, Patagonia will transfer all the profits it does not reinvest in the company to Holdfast."

Given the amount of money that is being distributed, along with the ideological nature of the causes, Hodfast's activity is beginning to attract some attention:

"Holdfast Collective created and manages five nonprofit groups — Holdfast Trust, Chalten Trust, Sojourner Trust, Wilder Trust and Tail Wind Trust. They are registered under a section of the tax code, 501(c)(4), that allows them to make unlimited political donations, provided their primary purpose is social welfare. The nonprofit groups, which pay management fees to Holdfast Collective, hold 98 percent of Patagonia's nonvoting shares. The shares are valued at $1.7 billion but will not be sold."

One of the founding principles of the structure is that it has to distribute all the money it receives from Patagonia, every year, and does not try and carry over any funds. This means they are able to distribute broadly to other organizations deemed sympathetic to the causes Chouinard cares about, even if they don't directly work to sustain the environment:

"And there was a slew of political contributions last cycle, including $100,000 each to Senate Majority PAC and House Majority PAC, which work to elect Democrats to Congress, as well as smaller gifts to groups such as the Black Voters Matter Fund, the Center for American Progress Action Fund and the Georgia Investor Action Fund."

There are lots more details about Holdfast's activities in the article, but I primarily enjoyed learning more about how it came about, and the selfless act by Chouinard to protect what he and his wife had created, for the foreseeable future:

"Because the Chouinards did not sell the company and retain the proceeds or leave the company to their children, they did not face a significant tax bill. And because they donated the shares to 501(c)(4) organizations, they did not receive a substantial tax write off. Instead, the family paid about $17.5 million in taxes to facilitate the transaction in 2022."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e  

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

At Patagonia, Profits Fund Preservation

By David Gelles and Kenneth P. Vogel

February 12, 2024

The New York Times

Late Edition – Final

B1, B2

https://www.nytimes.com/2024/01/30/climate/patagonia-holdfast-philanthropy.html

 

Strategic CSR - Sweatshops

Ever since we have had greater awareness of the global supply chain, and the low wages that drive it (and underpin the cheap prices we pay in the West for much of our clothing), there has been pressure on fashion firms to pay their contracted workers more. An important point along the way was the Nike sweatshop scandal of the 1990s, but nothing much has changed since, as noted in the article in the url below. What never ceases to amaze me, however, is the scale of the operation required to sustain the mass market fast fashion industry:

"In Bangladesh, the nearly 600,000 people making clothes for Swedish giant H&M—one of the biggest retailers in this space to start talking about paying living wages—earned an average of $119 a month in the first half of 2023, excluding overtime, the latest available data shows. That is well below the $194 living-wage figure for the suburbs of Dhaka, the capital, where clothing factories are clustered, according to the Global Living Wage Coalition, a research and advocacy group whose benchmarks are widely used in the industry."

The implications of these pay levels?

"At those income levels, workers say they have no savings. Often, they borrow from relatives to cover medical expenses or meet unforeseen emergencies. Some months, they even buy food on credit. Frustration over low wages boiled over in October when workers in Bangladesh set factories ablaze and smashed machines in protest."

The article makes the case that firms would like to change that, but are not sure how best to do that:

"[Western fashion companies] generally don't own the factories where their products are made and don't determine pay for workers. They say they don't want to go down the road of imposing specific wage levels on supplier factories. Instead, they have tried other solutions. H&M, for instance, brought Swedish study circles to Bangladesh to train workers in negotiation, experimented with model factories and pushed for more transparent pay structures for workers."

What is required, argue advocates, is exactly the coercive methods the companies are saying they want to avoid:

"What will work … is setting a higher wage level supplier factories must meet and a clear schedule for phasing in those higher wages."

The companies instead advocate for self-sufficiency:

"H&M said it agrees wages are too low in many sourcing markets, but that setting wage levels for suppliers is a 'shortsighted tactic that undermines the role of workers, unions, employers' organizations and governments.' They, and others like Zara-owner Inditex, stress the importance of workers negotiating higher pay for themselves via collective-bargaining agreements, where labor unions hammer out higher wages with employers."

The problem is whether the infrastructure for such agency exists (let alone the training to know how best to self-advocate):

"… in many of the places Western brands buy from, such as China, Vietnam and Bangladesh, independent unions are either banned or repressed. A review of Inditex disclosures shows just 3% of its supplier factories in Asia have collective-bargaining agreements."

The key barrier to progress, of course, is whether the higher costs that lead to higher prices will be supported by customers in the West. In other words, are they willing to pay more for their clothes, so that the workers who made them can be paid something close to what Western consumers say they want them to be paid?

"Part of the problem is low wages are core to fast fashion. It is no coincidence that Bangladesh, the world's second-largest exporter of clothes, is also the place where workers who make clothes earn among the lowest wages of industrial workers anywhere. To sell shorts and shirts cheaply—and increasingly, compete with so-called ultrafast fashion brands like China-founded Shein, known for their rock-bottom prices—clothing giants pressure their suppliers to keep costs down."

The key point:

"Insisting on higher wages would mean paying more for the clothes and potentially putting themselves at a competitive disadvantage if other companies aren't making similar moves."

Which is another way of saying that the companies do not have faith their consumers are willing to pay (even slightly) higher prices to support the working conditions they say they want for these workers:

"German shoemaker Puma said in its 2022 annual report that its factories in Pakistan and Bangladesh—accounting for roughly an eighth of its total products—don't pay a living wage. Even California-based Patagonia, known for its progressive ethos, says that of the 29 factories it bought clothing from, only 10 paid a living wage in 2022."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Fashion Firms Still Wrestle with How to Pay Workers a Living Wage

By Jon Emont

January 4, 2024

The Wall Street Journal

Late Edition – Final

B2

https://www.wsj.com/business/big-fashion-still-hasnt-figured-out-how-to-pay-a-living-wage-3675153f

 

Strategic CSR - Patagonia

Whenever I get down about the prospects for the planet (or, at least, human life on the planet), there is always Patagonia to amaze with their commitment to sustainability (in a very practical sense). As the article in the url below demonstrates, Patagonia continues to push the boundaries in terms of what is possible, in an industry that is known for its excessive levels of waste:

"Starting next year, Patagonia's wetsuits won't just be recycled — they'll be reincarnated. At the company's 'Wetsuit Forge' repair and design center, located a few blocks from the beach in Ventura, California, a first-of-its-kind wetsuit is draped over a table. The suit looks and feels like any other, but it's made in part from used Patagonia wetsuits broken down at a molecular level. It too will be melted down at the end of its life and reborn into a new, lower-carbon wetsuit."

This sounds like not such a big deal, given that lots of items are recycled. But, if you read the detail of the article, what Patagonia has achieved seems (to me, at least) to be both an impressive achievement, and a step forward for the industry, as a whole:

"The prototype is the product of a years-long initiative by Patagonia to eliminate much of the waste that accumulates when a surfer buys a new wetsuit. While the outdoor apparel retailer guarantees a lifetime of repairs for wear and tear, eventually the day comes when the racks of old wetsuits awaiting mending in Ventura can no longer be stitched back together. Some are recycled into yoga mats or tote bags, but inevitably, they all end up buried in landfills. Just how many old Patagonia wetsuits end up as part of $500 reincarnated versions depends on the volume of discarded wetsuits the company collects. But the strategy is ushering in a potentially repeating cycle that would yield the ultimate, immortal wetsuit."

Specifically, the key appears to be one element of the wetsuit, carbon black:

"Despite surfing's one-with-nature vibe, most wetsuits are the sartorial equivalent of an oil spill. They're made from neoprene, a petroleum-based synthetic rubber. (Many wetsuits sold in California even carry a state warning that they can expose you to chemicals known to cause cancer.) Patagonia is collecting end-of-life wetsuits for a partner that vaporizes them to reclaim what's known as carbon black, a key ingredient in neoprene and in the natural rubber Patagonia uses. It's the petroleum-derived element that gives wetsuits their strength and jet-black color. Whether carbon black can be infinitely recovered remains to be scientifically validated, but reusing it keeps old wetsuits out of landfills. The reclaimed material also avoids carbon dioxide emissions from the production of virgin carbon black, a ubiquitous ingredient in tires, plastics, inks and electronics. The material's $19.3 billion market, which is expected to grow 66% by 2032, emits as much as 79 million metric tons of CO2 annually from the combustion of tar oil and other petroleum feedstocks."

Complicated (and impressive) stuff.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Patagonia Is Cracking the Code on Endlessly Recylable Wetsuits

By Todd Woody

May 2, 2024

Bloomberg

https://www.bloomberg.com/news/features/2024-05-02/patagonia-is-cracking-the-code-on-endlessly-recyclable-wetsuits

 

Strategic CSR - Davos

In general, I find that content generated at Davos should be taken with a handful of skepticism – there is a lot of virtue signaling going on, along with the need to be seen in the right place at the right time. The article in the url below, suggesting that the leaders of the world are now suddenly serious about climate change, appears to be more of the same:

"Instead of just responding to the business effects of climate change, leaders at this year's World Economic Forum are discussing creating a proactive positive impact."

Apparently, the key to this sudden realization of the need to act is regeneration, "rethinking and reinventing everything from business models to supply chains, as opposed to tweaking around the edges to mitigate, instead of prevent, risk." The idea that "regeneration" is just now occurring to the global discussion on climate change is laughable, since it has been around for many years. But, beyond the superficiality of the article, there are two points that stood out to me.

First, is the Pew opinion poll showing that individual Americans are more than ready to blame others (corporations, in particular) for climate change, but only 27% see the solution in individual behavior. They don't understand that the two things are the same, since we are all stakeholders and companies merely reflect the collective interests of all stakeholders, as they interact within the boundaries of what we call the corporation.

Second, I have always disliked the concept of "resilience." It is dangerous because it assumes we need to take the status quo as a given, and work from there. While there is obviously an empirical reality to this, accepting resilience without question avoids diagnosing the core problem and identifying why we are in the mess we are in. And, if we do not understand the cause of the problem, we are highly unlikely to solve it. Linking what Patagonia has done with regeneration to the 'excuse' of resilience is a disservice to the pioneering innovation of Yvon Chouinard (and, again, only ensures we continue to bury our heads in the sand):

"Of course, even getting companies to the stage of resilience – never mind regeneration – is a challenge. … Still, the appetite for change is there – and seems to only be growing. That's not least of all, say some leaders, because there's no good alternative."

Key takeaway – expect nothing to change.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Davos 2024: The future of sustainable business is 'regeneration'

By Amanda Ruggeri

January 19, 2024

BBC

https://www.bbc.com/worklife/article/20240119-davos-2024-the-future-of-sustainable-business-is-regeneration

 

Strategic CSR - Patagonia

A quick test: Who can name the CEO of Patagonia? I couldn't and I'd be surprised if many of you can, which says something (* answer is below). This realization struck me as I was reading the interview/profile of the CEO of Patagonia in the article in the url below, which I found to be interesting but largely not very surprising. True to form, he acknowledged that Patagonia is still carbon positive, even while reminding everyone that it is closer to carbon neutral than most:

"Mr. Gellert, who arrived at Patagonia in 2014 and became its CEO in 2020, helped to create the new business plan and is now responsible for executing it. 'I'm very clear-eyed that we still take more from the planet than we restore,' he says. 'But I like to think that we are offering a model of a different way of doing business.'"

The interview got interesting, in my opinion, in the last couple of paragraphs, when Gellert started discussing the trade-offs involved in his drive to make Patagonia more sustainable. These compromises are the complicated parts of what it will take to implement meaningful change – compromises that are largely ignored in the idealistic mainstream discussions around climate change:

"Mr. Gellert concedes that it is awkward to both prize the planet and produce unnecessary consumer goods. … He has expanded the company's repair and resale services to keep more of its gear out of landfills, but he notes that pursuing sustainability in anoraks and hiking pants is often harder than it looks."

More specifically:

"Is it better to waterproof products with palm oil instead of toxic chemicals when palm oil plantations tend to compromise tropical forests? Is it helpful to recycle plastic bottles into fleece if these fibers are more likely to shed microplastic particles that can end up polluting the seas?"

This is the detail of sustainability that often gets lost, but is essential if we are ever to make substantive progress. The goal is to move away from black and white decisions framed in terms of good and bad, and delve into the shades of grey that are based around relative degrees of harm. There is nothing easy about these decisions and, done properly, the implications are endless:

"Gaming out these trade-offs is 'never-ending,' says Mr. Gellert. Sustainability, he explains, isn't simply a goal that a company can achieve and then move on to other things: 'This is the work, forever and all time.'"

* The CEO of Patagonia, since 2020, is Ryan Gellert. His predecessor was Rose Marcario.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Ryan Gellert

By Emily Bobrow

February 4-5, 2023

The Wall Street Journal

Late Edition – Final

C6

https://www.wsj.com/articles/ryan-gellert-wants-patagonia-to-be-part-of-the-environmental-solution-11675444847

 

Strategic CSR - Roe v. Wade

As you will all no doubt remember, the U.S. Supreme Court was busy over the summer, in particular overturning Roe v. Wade – the 1973 decision that had allowed abortion to be legal across the whole country. This newsletter is not about that, as I am sure you all have firmly set views on the topic; instead, this newsletter is about the article in the url below that reports Patagonia's reaction to the decision. Understandably, it was emotional and demonstrates the firm's progressive views and its support for its employees (e.g., see also Strategic CSR – Patagonia):

"Outdoor clothing brand Patagonia said on Friday that it would post bail for any employees arrested at abortion protests. The company will provide 'training and bail for those who peacefully protest for reproductive justice,' it said on LinkedIn. The perk applies to both full-time and part-time workers, Patagonia said."

Apparently (and quite surprisingly, I think), this is not a new thing for the firm:

"The company offers protest training and has a policy of bailing out employees arrested at peaceful protests, according to Bloomberg."

What I was wondering as I read through the article is how this response would be received by the CSR community. My guess is it would largely be welcomed (and I certainly liked it), but that then made me wonder whether it is always ok for companies to encourage behavior that gets people arrested. The company softens it a bit by adding the "peaceful protest" qualifier but, after all, they are anticipating employees will be arrested, which is the only reason they would need bail. Specifically, I wondered what I would think if I saw a headline saying that Exxon was willing to bail out any employees caught protesting against a UN COP conference? Or, what if Black Rifle Coffee Company had offered to pay the court costs of any of its employees caught at the January 6 insurrection?

As long as my reaction would have been the same (i.e., similarly supportive), then I am being consistent in my views. But, if I liked the Patagonia response, but would have objected to a similar policy by Exxon or BRCC, then I am being hypocritical. Values are values, and it is hard to argue that one person's values are any less valid than someone else's. I might disagree with them and think the world would be much better off if everyone shared my values, but that is not how life works. And, this decision by the Supreme Court seems like a good issue on which to make the point.

If we want businesses to be values-based, then we have to recognize there will be some that advocate for causes with which we disagree. The battle comes in trying to 'win' the day on the issues about which we care the most. If we lose those arguments, it is not because the other side is 'evil,' it is because we disagree about something fundamental (however ill-informed you think the other side's position is).

So, my sense is that we should only be happy to see Patagonia inciting its employees to act lawlessly, if we are perfectly ok with Exxon, or BRCC, or Chick-fil-A, or whomever else doing the same. If acting based on our values and principles is objectively a good thing, then that applies to all the values and principles, not just the ones we support. In terms of strategic CSR, being "socially responsible" does not mean only firms doing things that we think are acceptable; it means creating value for the firm's stakeholders, according to their values and perceived self-interest (see Strategic CSR – Self-interest), even if that looks like something we oppose. In other words, just because we don't like something does not mean it is not socially responsible.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Patagonia will post bail for any employees arrested at abortion protests

By Tim Levin

June 24, 2022

Business Insider

https://www.businessinsider.com/roe-v-wade-abortion-patagonia-protest-bail-out-2022-6

 

Strategic CSR - BRCC

Following on from Tuesday's newsletter, the article in the url below announces the public listing of Black Rifle Coffee Company (BRCC). If you are unfamiliar with BRCC, I wrote about it earlier this year (see Strategic CSR – Black Rifle Coffee):

"The article in the url below profiles Black Rifle Coffee – a roasting company in Salt Lake City that, I would argue, is just as good an example of strategic CSR in action as Patagonia. … While enacting a very different set of values to Patagonia and, as a result, appealing to a completely different part of the population, the point is that Black Rifle stands for something and that thing is highly valued by a specific market segment."

In the article featured in today's newsletter, the company is announcing its listing via a merger with a special-purpose acquisition company (SPAC):

"Black Rifle Coffee Co. is going public by combining with a special-purpose acquisition company in a merger that values the coffee seller focused on military veterans at about $1.7 billion, the companies said. Known for its pricier coffee and firearms-themed products such as its AK-47 Espresso Blend, Black Rifle is combining with the SPAC SilverBox Engaged Merger Corp. I. Black Rifle also sells branded apparel and produces digital content to promote its products to veterans and first responders."

While SPACs have a spotty track record and are often associated with dubious business propositions, what is interesting about this announcement is that the merger is positioning BRCC as a social enterprise:

"Founded by former Green Beret Evan Hafer in 2014, Black Rifle has capitalized on consumers' desire to shop at brands that support social causes. Mr. Hafer vowed in 2017 to hire 10,000 veterans after Starbucks Corp. promised to hire 10,000 refugees following then President Donald Trump's executive order barring more refugees from entering the country."

More specifically, the merger is enabling the company to validate this claim by altering its legal status:

"As part of the deal, Black Rifle plans to reorganize as a public-benefit corporation, meaning it will have fiduciary duties both to shareholders and social good. Many startups have become PBCs, with investors increasingly giving priority to companies' missions. 'We want to do well for ourselves and do good for our community,' Joe Reece, the SPAC's executive chairman, said."

Relating back to the comparison I made back in March with Patagonia, and given that Patagonia is also a public benefit corporation (since 2012), I am struck by how different the values and guiding missions of these two companies are, but how they are equally appealing to their specific set of key stakeholders:

"Today, about half of Black Rifle's roughly 600 employees are military veterans, a total that Mr. Hafer said in an interview he expects to grow after the SPAC deal."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Black Rifle Coffee, SPAC to Merge

By Amrith Ramkumar

November 3, 2021

The Wall Street Journal

Late Edition – Final

B3

https://www.wsj.com/articles/veteran-focused-black-rifle-coffee-going-public-through-1-7-billion-spac-deal-11635847721

Strategic CSR - Black Rifle Coffee

The article in the url below profiles Black Rifle Coffee – a roasting company in Salt Lake City that, I would argue, is just as good an example of strategic CSR in action as Patagonia:

"Black Rifle Coffee Co. says its AK-47 Espresso Blend 'is here to conquer your taste buds.' Its extra-dark Murdered Out roast 'will fuel your midnight ops or your morning commute.' Another of the six-year-old company's blends promises to 'keep your freedom engine running.'"

While enacting a very different set of values to Patagonia and, as a result, appealing to a completely different part of the population, the point is that Black Rifle stands for something and that thing is highly valued by a specific market segment:

"With firearms-themed branding, unabashed support for police and the military and an irreverent founder who hasn't shied away from political debate, Black Rifle is a prime example of the way some businesses are capitalizing on politically engaged consumers' hyperpartisan shopping habits."

While we get the politicians we deserve, we also get the companies we deserve. As a result, the mix of businesses across the economy will reflect the values of the broader population. And, clearly, there is a market for some firearms with your coffee:

"Salt Lake City-based Black Rifle said its revenue nearly doubled in 2020 to $163 million, 70% of it from e-commerce. In 2015, its revenue was $1 million. The company said it is profitable but didn't provide further details. Of its 450 current employees, 55% are military veterans."

The point is value creation – meeting the needs and demands of your key stakeholders, rather than striving to implement a particular set of objectively-defined values:

"Justin Cheung buys Black Rifle's Silencer Smooth blend because he prefers a light roast—and because the company's message resonates with him, including its promise a few years ago to hire a huge number of veterans. 'I do feel better about my purchase knowing that they stand for things I believe in,' said Mr. Cheung, a Southern California-based wine buyer who describes himself as a constitutional conservative."

I can imagine an environmental activist saying exactly the same thing about shopping at Patagonia – while the values are different, the fact that stakeholders are loyal to a company that meets those values is what is important:

"Big American firms historically sought to stay above the partisan fray, an approach summarized by basketball legend Michael Jordan, who famously proclaimed: 'Republicans buy sneakers too.' Now more consumers want CEOs to take a stand. In 2019, 60% of American consumers would make a decision about whether to buy or boycott a company's product based on its stand on societal issues, according to a survey by public-relations firm Edelman—up from 47% in 2017."

As any effective strategist understands, the key to differentiation is market segmentation:

"Tom Davin, the former CEO of Panda Restaurant Group Inc. who was brought on as Black Rifle's co-CEO in 2019, said the company is targeting a specific segment of the population: military members and their families, first responders, sportsmen and gun enthusiasts. 'We're not going for the entire coffee market,' he said."

Rather than something to shy away from, I would like to see more companies adopt a defined set of values and work to enact them, genuinely. Then, the marketplace will decide which companies succeed and which fail. A company can only be socially responsible if it is meeting the needs of that society – what the people who live there actually want. The flipside of that is those companies that judge the societal mood incorrectly, or embrace values that go out of fashion, will quickly find themselves on the wrong side of history, and out of business. Whether we agree with the outcome is different from being able to understand the process by which value is created.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Coffee with a Shot of Politics

By Zusha Elinson

March 13-14, 2021

The Wall Street Journal

Late Edition – Final

B1

https://www.wsj.com/articles/black-rifle-coffee-seeks-like-minded-aficionados-11615550401

 

Strategic CSR - Patagonia

As the article in the url below reminds us, you have to love Yvon Chouinard:

"Patagonia's founder, Yvon Chouinard, isn't afraid to get political. The outdoor clothing and gear company has a long history of environmental activism, but as the world falls deeper and deeper into a harmful climate crisis, Chouinard feels it's imperative to call out climate deniers who hold positions of power. Bluntly."

 

How blunt exactly?

 

"In addition to providing election resources and encouraging people to vote for climate leaders, Chouinard is also making Patagonia's political stance crystal clear with the slogan, 'Vote The Assholes Out.'" 

And they are integrating the slogan into their product design. Specifically, they are adding it to some of their apparel labels:

The tags were only added to a specific line of clothing, which itself is part of the message:

"'They were added to our 2020 Men's and Women's Regenerative Organic Stand-Up Shorts because we have been standing up to climate deniers for almost as long as we've been making those shorts,' [Patagonia spokesperson Corley] Kenna wrote."

Patagonia has long promoted good democracy practices – not only encouraging its employees to surf, but also to vote (e.g., see Strategic CSR – Patagonia). Given the firm's political battles over the past 4 years or so, it is perhaps not surprising that Chouinard has had enough and is no longer just telling people to vote, but telling them which way they should vote.

Have a good weekend

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Yes, Patagonia's viral 'Vote the Assholes Out' tags are real. But the slogan isn't new

By Nicole Gallucci

September 15, 2020

Mashable

https://mashable.com/article/patagonia-vote-the-assholes-out-tag/

Strategic CSR - McDonald's (I)

The article in the url below demonstrates the range of issues facing a company as it tries to create value for its diverse set of stakeholders. This is true even for a firm as large and complex as McDonald's ("Every day McDonald's serves 69m customers, more than the population of Britain or France"), which wouldn't normally spring to mind as the epitome of a socially responsible organization. The article profiles the career of Bob Langert, who converted a short-term assignment in the firm in 1988 (dealing with a spat over polystyrene packaging) into a 25 year career as McDonald's CSR officer:

 

"It was a Herculean task. … Apart from litter, he had to deal with animal welfare, environmental destruction, obesity and worker's rights."

 

The opportunities, however, when a company the size of McDonald's decides to make a change in operating practices, are massive:

 

"McDonald's [often] took action even when there was little sign of public concern. Shaving one inch off the napkins saved 3m lbs of paper annually, for example, but few consumers noticed."

 

Another example is the firm's supply chain for eggs:

 

"In the late 1990s, after complaints from campaign groups about the living conditions of hens, Mr Langert visited an egg facility to find the conditions were indeed terrible. In August 2000 the firm said it would buy eggs only from suppliers that gave hens 72 square inches of space, compared with an industry average of 48 square inches. Suppliers resisted so strongly that McDonald's had to find new sources for its eggs. But those who complied found that the mortality rates of hens decreased and egg-laying rates increased, offsetting the extra costs."

 

The list of issues were endless:

 

"Human working conditions also caused the company trouble. … Another issue was the use of 'trans fats' to cook the restaurant fries, which were deemed to increase the risk of heart disease; it took six years for the chain to phase out the practice. But the company has also added more salads and healthy options."

 

Even if critics continue to campaign against McDonald's and hold it up as the anti-CSR company, it is clear from the article that the potential to change the world lies with these large organizations, much more than the Patagonias or NGOs of this world:

 

"Was all the effort worth it? It seems like that many of the people who care a lot about these issues would never eat a fast-food burger in the first place. But Mr Langert did more than most to reduce environmental waste and animal cruelty."

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Do you want ethics with that?

February 9, 2019

The Economist

Late Edition – Final

55

https://www.economist.com/business/2019/02/07/a-25-year-battle-to-improve-the-image-of-mcdonalds

 

Strategic CSR - Patagonia

Leave it to Patagonia to fight the good fight. I love the fact that this firm is run more like a social activist organization than a for-profit corporation:

 

"Outdoor clothing company Patagonia Inc. has committed the $10 million it saved from federal tax cuts championed by President Donald Trump to nonprofit groups who work on conservation and climate issues."

 

And the justification demonstrates the firm's commitment to the greater good. According to the firm's CEO, Rose Marcario:

 

"'Taxes protect the most vulnerable in our society, our public lands and other life-giving resources,' she wrote. 'In spite of this, the Trump administration initiated a corporate tax cut, threatening these services at the expense of our planet.'"

 

Patagonia is the ultimate anti-profit firm that seems to make money in spite of itself:

 

"Patagonia has linked its brand with conservation, such as its 2011 Black Friday advertisement telling consumers not to engage in empty consumption by purchasing its jackets. In 2017, it launched a program called 'Worn Wear,' which allows customers to pay for repairs to old items or trade them in for store credit."

 

Now, if we could just get more customers to invest in the Patagonia business model by shopping there, we might be working towards a more sustainable economy.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Patagonia Donates $10 Million Trump Tax Savings to Green Groups

By Eric Roston

November 29, 2018

Bloomberg Businessweek

https://www.bloomberg.com/news/articles/2018-11-28/patagonia-donates-10-million-trump-tax-savings-to-green-groups

 

Strategic CSR - Patagonia

It is difficult not to love Patagonia. While I was walking to work this morning, I saw this sign on the window of our local store:

 

 

The article in the url below covers the firm's recent announcement that it will close for election day this year, on November 6. Even though their purpose is clearly partisan ("In the past, Patagonia — known for its advocacy of environmental causes — has encouraged people to vote with the planet in mind"), there is also a larger issue of overall voter registration and participation:

 

"Four years ago, voter participation hit its lowest since World War II, with only 36 percent of the voting-age population making it to the polls. A 2014 Pew Research Center study found that voters were likely to miss the midterms because they were indifferent about voting, had trouble with the voting process or because of structural forces, like job or school schedules that couldn't budge."

 

This is not the first time Patagonia has taken this stance and, as before, the firm is encouraging other firms to do the same:

 

"Patagonia closed stores nationwide on Election Day 2016, as well as its headquarters and distribution and customer-service center, and gave employees paid time off. Patagonia chief executive Rose Marcario wrote that 'this year, we're doing it again,' and that other companies should join in 'because no American should have to choose between a paycheck and fulfilling his or her duty as a citizen.' … In 2016, workers at General Motors, Ford Motor Co., Square, Hearst Publishing, Casper and Thrillist were given a paid holiday, according to CNNMoney."

 

The firm is known for its radical advocacy:

 

"Environmental causes have often been a rallying cry for the company, which said it would donate all of its 2016 Black Friday sales — a whopping $10 million — to local environmental groups. The company also gives 1 percent of its annual sales goes to environmental organizations. Patagonia also joined REI, the North Face and other retailers in signing an open letter in 2017 speaking out against the United States' withdrawal from the Paris climate accord under President Trump."

 

Long may Patagonia's values-based approach to business continue.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Patagonia is giving its workers Election Day off – and says you should, too

By Rachel Siegel

The Washington Post

July 6, 2018

https://www.washingtonpost.com/news/business/wp/2018/07/06/patagonia-is-giving-its-workers-election-day-off-and-says-you-should-too/

 

Strategic CSR - Walmart, Amazon, Apple

One of the arguments I make in class is that "CSR," in essence, can be defined as 'corporations giving society what it wants.' If we think of a 'responsibility' as something for which we are held accountable, then this is the best colloquial definition of CSR that I can think of. The natural extrapolation of this logic, however, is that the most socially responsible company is not a firm like Patagonia, but a firm like Walmart.

 

Clearly, Patagonia is not giving America what it wants. If America did want what Patagonia is selling, then the company would not have the miniscule market share that it currently does. In contrast, I have seen numbers quoted that 90% of U.S. households shop at a Walmart store at least once a year. It is hard to think of any other company that receives that level of societal endorsement. As such, if you have a problem with Walmart then, at some level, you have a problem with American society since, clearly, Walmart is giving America what it wants. I understand that this is a simple statement that reflects a very complex reality, but I also think it captures the essence of how societies and economies work – we get the companies we deserve (they reflect our collective set of values), just like we get the politicians we deserve. You and I might agree that it would be great for Americans (and the World) if they wanted something different, but that is a secondary argument.

 

In classes more recently, when I have asked students 'What is the most socially responsible company?' and talked through the reasoning behind my answer, I have seen Amazon being suggested as a possible alternative. I like this answer, although given the way that most CSR advocates react to Walmart, it doesn't have the quite the same dramatic effect. Nevertheless, as Jeff Bezos continues to encroach upon every aspect of our lives, Amazon can lay greater claim to the title. Until now, though, I hadn't seen a convincing quote to support a challenge to Walmart's crown.

 

The article in the url below changes this. In the most recent All-America Economic survey, it was revealed that 2 out of every 3 Americans own an Apple product:

 

"The latest CNBC All-America Economic Survey reports that 64% of Americans now own at least one Apple product, and that the average U.S. household now owns an average of 2.6 Apple products. CNBC first asked the question back in 2012, when the numbers were 50% and 1.6 products. Even more impressive is the fact that there are very few demographics where Apple product ownership is below 50%."

 

Maybe Apple is now the most socially responsible company …

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


64% of Americans now own an Apple product, up from 50% in 2012

By Ben Lovejoy

October 10, 2017

9to5Mac

https://9to5mac.com/2017/10/10/cnbc-all-america-economic-survey/