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Patagonia ‘Disappointed’ not to Make Most Ethical Companies List

Patagonia — which made the World’s Most Ethical Companies list six years running before being dropped from the 2013 edition — told Environmental Leader it’s disappointed it wasn’t included and has received no response from Ethisphere about why it didn’t make the cut.

When asked why Patagonia and other companies were not included in this year’s list, an Ethisphere spokesperson said the think-tank doesn’t provide specifics — except for to the company itself — about why companies did not make the list.

Rabobank was another six-time World’s Most Ethical company before being dropped from the most recent list; Kimpton Hotels, Timberland, Costco, Best Buy and Stonyfield make the 2012 list but not the 2013 edition.

The annual list highlights companies that outperform industry peers in ethical behavior. Winning companies constantly improve their programs, says Ethisphere’s Aubrie Artiano.

“One of the reasons a company may not return is because they haven’t made an effort to improve internal programs within the last year,” Artiano says. “Industry competition also factors in — industry risk and whether or not a company is meeting the newest criteria or not. This also translates to a materially higher score versus industry peers, among those who applied.”

Artiano says any company that wants to review its WME scorecard can contact Ethisphere: “These scorecards can offer companies insight as to why they were not included in the 2013 list.” She says the scorecards will be released later this week.

Patagonia’s Jen Rapp says the company contacted Ethisphere twice and Ethisphere didn’t respond. “We were disappointed to not be included in Ethisphere’s list this year, and hope we’ll be included once again in 2014,” Rapp says.

Last year, the outdoor clothing and equipment company became the first company in California to elect to be a “benefit corporation.” The legal status affords a company’s directors legal cover to consider environmental and social benefits over financial returns. Patagonia also launched an effort to restore 15 million acres of grassland in its namesake region, and bring a new line of sustainable merino wool products to consumers.

Rapp says the company initiated or expanded more than a dozen ethical programs over the past year, from its Our Common Waters campaign to increasing its solar generation capabilities and supply chain traceability. In 2012, Patagonia’s Our Common Waters bluedesign partners — suppliers that use best practices in their energy and water use, water emissions and air emissions — increased from 33 to 50, Rapp says.

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7 thoughts on “Patagonia ‘Disappointed’ not to Make Most Ethical Companies List

  1. Of course those indizes should honour ethical standards and development of companies.

    however the 2013 rating has obviously gone wrong with the famous case of starbucks getting on the list. this companies business is based on producing trash. it has made headlines in evading taxes in the past months. i do not see how this company could be one of the most ethical companies in any case. Ethisphere should maybe have another look.

  2. I’m not sure the 2013 List does much for Ethisphere’s credibility – While it is right to always be looking for companies making constant progress, to dismiss an organization like Patagonia that provides such leadership to others just starting the journey seems a little odd.

    Keep doing what you are doing Patagonia!

  3. How is it that an organization (Ethisphere) which rates others on ethics, can get away with having little-to-no transparency and accountability of its own? It’s ludicrous that Ethisphere can publicly affect the reputation of company such as Patagonia – which clearly sets the business ethics bar higher than just about any other company – and yet, Ethisphere then won’t publicly provide any substantive and credible rationale for their removal of Patagonia. Integrity really isn’t that hard – it just means holding yourself to a standard first – and only then inviting others to share the journey. Ethisphere clearly has yet to learn this fundamental core value.

  4. Does Ethisphere offer a consulting service for a fee? From their site, it looks like they have a suite of advisory services. If that is the case, then it wouldn’t surprise me that a) they keep their scorecard secret, and b) they ding companies that to the outside eye appear quite ethical. The game is to convince companies to pay for their “service”. If you don’t pay, you can’t play (aka get on their list). I saw this dynamic in the financial services industry. Self-described “impartial” raters would publicize some sort of ranking, be vague with you on why you didn’t get higher up, then offer a service whereby you would pay for their counsel (aka, they let you see the scorecard formula) in order to get on the list next year.

  5. Patagonia is consistently outperforming many of the other companies on this years list. If they didn’t make many new changes for 2012 then maybe dropping them would at least make a little sense but they did many new things…the Ethisphere list seems to have lost some credibility at this point…

  6. To my mind, the omission of Patagonia, Rabobank, Stonyfield and Timberland seriously undermines the credibility of the process. It just does not stack up in terms of what I know about these companies versus others who have made the list.

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