Patagonia to eliminate discount unless Australian wholesalers reduce footprint

Sustainable outdoor clothing company, Patagonia, is eliminating all order discounts for its Australian wholesale partners unless they take steps to minimize their carbon footprint, in an effort to inspire other shops to do more to combat climate change.

The $1 billion-plus-a-year company, which offers a range of upscale outdoor goods, stated that it will begin implementing the new policy. The shop offers clothes locally through a few company-owned stores and outlets, but wholesale partners such as The Iconic, MacPac, and General Pants also sell a substantial quantity.

When buying products directly from the manufacturer, wholesalers often receive discounts of up to 50%.

Dane O’Shanassy, Patagonia’s local managing director, said that all existing discounts for wholesale partners would be phased out in the next 12 to 18 months if they don’t take steps to reduce their carbon footprint. They’ve advised some of their accounts that if they don’t step up, they’ll wind these discounts down over the next one or two years.

Wholesalers who take steps to decrease their carbon footprint or make donations to grass-roots environmental initiatives will now be eligible for discounts. Any company that achieves carbon neutrality becomes a recognized B Corp, or joins the 1 Percent for the Planet Pledge will be eligible for bigger discounts.

Mr. O’Shanassy explained that for most firms, discounts are simply what you provide your consumers to keep the big purchases coming in, but that kind of deal goes against their ‘don’t buy it if you don’t need it’ mantra. They wanted to put a true twist on the idea of volume for profit. That, they believe, contradicts what it means to be a responsible business.

The move is a rare example of a company adopting climate action in relation to ‘scope three’ emissions, which are concerned with the sustainability and carbon emissions of entities with whom the company conducts business but does not have control, such as wholesalers and suppliers.

Mr. O’Shanassy said Patagonia’s scope three emissions were “enormous” and one of the primary reasons the firm has not yet achieved carbon neutrality, but he’s hopeful that initiatives like these will not only have an influence on his company but will also change the perspectives of others. It will take a village to make a difference. And he is hoping that this program will motivate not only other dealers but also other brands to examine how they’re doing business.