THE 2025 PATAGONIA WORK IN PROGRESS REPORT: THE STRUGGLE OF ETHICAL BRAND INSIDE CAPITALISTIC SOCIETIES

AUTHOR: Wood, T.E.

1.0 Introduction 

The fashion industry takes second place under the world’s most polluting industries in the world, right behind the oil industry (Mohr, et al. 2022). The damage exponentially grew due to the creation of fast-fashion business models which follow trend culture which fosters overconsumption, short product life cycles, and detrimental impacts to the environment and society through labour exploitation and irreversible pollution (Rehman, 2023). The impacts of the fashion industry have slowly entered the public sphere where activists and environmentalists call for fashion industry reform (Rehman, 2023). Some companies address these voices and concerns not through radical change in business operations, but rather with the false bandaid of greenwashing. While this may deceive some people, many are aware of the false claims and become skeptical and lack trust around sustainability claims in the fashion industry (Rehman, 2023). However, some companies have made a genuine effort towards changing the industry by carving a niche of ethical and sustainable business models, despite the capitalistic pressures against it. Therefore, the second half of this report analyses Patagonia and its release of the ‘2025 Work in Progress Report’ which showcases that even sustainable business models devoted to ethical behaviour, cannot be one-hundred-percent ethical under capitalism.

2.0 Understanding Business Ethics 

2.1 Blending Business and Ethics 

In order to understand the challenges of blending business and ethics, it is imperative to analyse the system in which it operates. Ardley and May (2020) highlight how inequality and overconsumption are the main problems of capitalism since it encourages labor exploitation and environmental destruction. On a more pessimistic note, Xueqin (2025) goes as far as saying capitalism has brainwashed and enslaved society (Predictive History, 2025). However, Bodislav and Georgescu (2025) highlight a complete eradication of capitalism would result in economic downfall and decreased quality of living. Still, these academics recognise capitalism's consequences, arguing a balance is necessary, one where ethical consumption and sustainable practices are implemented (Bodislav and Georgescu, 2025). John, et al. (2023) even conceptualises this through a continuum between sustainable capitalism (SC) and neo-capitalist paradigms. It is through sustainable capitalism mechanisms, where business models can blend performance expectations with sustainable development goals (SDGs) (John, et al. (2023). Yet, SC is limited by monopolistic corporations who defend their position and companies using greenwashing tactics only to soothe reputational issues. Moreso, John, et al. (2023) argues sustainable capitalism does not persist when profitability is threatened, as companies will not sacrifice survival for sustainability and ethics. Overall, the outlook is bleak towards transitioning away from capitalism, as it requires massive global reform and such reform would be resisted by the elite wealth class of the Global North, as these individuals benefit from such a system. Therefore, it is crucial to address and incorporate ethics through a realistic and critical lens.

2.2 The Normative Ethical Theories 

Melé (2024) argues combining ethical and business theories is problematic due to managerial confusion, as the current environment of normative ethical theories (NET) are limited by multiplicity, fragmentation and reductionism. Academics hold conflicting views around incorporating NET into business decision-making (BDM). Some scholars argue NET is a tool in BDM for moral understanding, whereas others think BDM has an essence of ethics, but mainly, it should only be understood from a political philosophy (Shaw, 1996; Moriarty, 2005). Contrarily, others reject ethics in business entirely as it ‘does not meet the needs of real business people’ (Stark, 1993). While this debate showcases the disconnect between ethical and business theories, it simultaneously highlights the pluralistic aspects (Melé, 2024). However, this approach is critiqued since it allows managers to pursue egoistics goals by solely matching NET to any given context. Alternatively, pragmatic approaches are used in BDM to practically address the situation at hand, but the limitations are vagueness, usefulness, and impreciseness (Melé, 2024). However, Bonde and Firenze (2013) conclude that NET and BDM can be effectively combined, as understanding both the advantages and disadvantages of NET provide an opportunity for managers to make the ‘best’ decision. Furthermore, all three NET frameworks (teleontological, deontological, and virtue) produce similar results, highlighting how these frameworks are mutually inclusive and offer different perspectives to the same conclusion (Bonde and Firenze, 2013). This supports the final argument of Melé (2024) that business and ethics should go together and is likely possible when business possesses an ethical core.

2.3 Understanding Stakeholder Theory 

Despite challenges, it seems that Freeman’s (1984) stakeholder theory (ST) may provide the framework for developing this ‘ethical core’ (Melé, 2024). In context to ethics, Friedman (1970) argues focusing on stakeholder groups besides shareholders will decrease wealth. Especially given the volatility of modern markets, as any potential inefficiency, like time necessary to include stakeholders into the BDM processes, presents financial disadvantages. Even if it attempts to reduce ‘oppressive and unaccountable private dictatorships’ (Moriarty, 2021). Furthermore,  Friedman’s (1970) perspective emphasises shareholder ownership, but this presents a conflict of interest due the potentiality of egoistic pursuits. Alternatively, Freeman (1994) claims the normative core of ST aims to create wealth while limiting trade-offs between groups. Plus, lacking strong ethical foundations may create legal penalties, regulatory fines, and reputational damage, all lessening the revenue left for shareholders (Reynolds, 2024). Moreso, stakeholders are more informed around environmental and social concerns through technology, meaning it becomes crucial for companies to consider a wider group of stakeholders in BDM (John, et al. 2023). However, Moriarty (2021) challenges this, as it is difficult to clearly identify who are the stakeholder groups, which ones should be considered, and how the interests can specifically be balanced. Still, many academics agree ST rivals the work of Friedman (1970) due to conflicting arguments of how residual income should be divided, but Freeman et al. (2010) argues ST is less of a theory and more a body of research or mindset which prioritises stakeholders, diminishing the rivalry argument. (Moriarty, 2021). Therefore, a new perspective is necessary, one which does not show ST threatening wealth accumulation. Instead, the two exist in a symbiotic relationship.

2.4 Ethics of Leadership and Culture 

Leadership managing culture is argued the most effective strategy for embedding ethics in corporations, as it addresses shared mindsets within organisations (Martínez, et al. 2020). In order to increase ethical BDM in firms, molding the culture is crucial. The essential role of leadership is leading by example through integrity and accountability (Reynolds, 2024). Martínez et al. (2020) highlights failure to implement ethical values in firms stemmed from leaders whose actions did not match vocal efforts. Additionally, Kotter (1996) showcases the difficulties and nuances of changing organisational culture, as there are eight steps leaders must take before seeing cultural feedback and changes in behaviour. Due to its complexities, greenwashing is brought under a new light, as it is easier than tackling a culture against ethical practices. Therefore, questioning business models (BM) is essential. For instance, sustainable businesses tend to have ethics and sustainability already embedded into the culture since conception, whereas fast-moving-consumer-good (FMCG) BM reject these values (). Thus, implementing change in these industries may be virtually impossible. Due to these difficulties, this report focuses on brands who initially had sustainability and ethics embedded into the culture. Furthermore, addressing how these values are maintained as the company scales, especially under the pressures of capitalism and volatile market environments. Martínez et al. (2020) highlights how ethical culture is valid through conceivable values both inside and outside the company. Therefore, this report analyses Patagonia since its sustainable position is known world-wide and internal stakeholders are chosen based on these values (John, et al. 2023).

3.0 Analysis of Patagonia

3.1 The Work in Progress Report 

Patagonia released its ‘Work in Progress Report’ in 2025, promoting radical stakeholder transparency, as private companies are not required to produce such reports (Pinnock, 2026). Even though Patagonia is a leader within the sustainability industry, the report showcases the reality of Patagonia not being sustainable (Patagonia, 2025). Still, Wilking (2025) labels this not as greenwashing, but instead environmental reverence being blown out of proportion due top-tier communication and marketing. However, in terms of transparency, action, and values, Patagonia is still performing better than its competitors (Wilkins, 2025). The deontological approach argues Patagonia is ethical as the values showcase duties towards bettering the planet (Patagonia, 2025). However, the teleontological approach sheds light on whether these internal intentions and duties translate into the realm of outcomes. Patagonia used a utilitarian approach majorly in environmental conservation initiatives, fighting for migrant worker rights in the supply chain, and encouraging circular economies (Patagonia, 2025; John, et al. 2023). However, Patagonia does not exist without egoism. Remarkably, wealth accumulation is balanced alongside utilitarian values, as Patagonia argues finances work as an immobilizing tool to initiate positive change (Patagonia, 2025). But disagreements still persist as polyester is the main product ingredient and fair practices toward garment workers are questioned, both in an attempt to increase wealth (Heugten, 2023, Modaes, 2025). Overall, NET analysis proves that an effort towards sustainable capitalism still contributes to the detrimental effect on the environment (John, et al 2023; War on Want, 2023). 

3.2 The Values in Conflict 

In the context of conflicting values between utilitarian and egoistic approaches, it is essential to address ongoing or potential harms. Largely, Heugten (2023) highlights garment worker exploitation in supplier factories, contradicting Patagonia’s claims in its report. Patagonia seemingly uses the same suppliers as fast-fashion brands, but argue behaviour is warranted due to expertise in designing, testing, marketing, and selling, rather than manufacturing (Heugten, 2023). Therefore, product outsourcing is justified then, as foreign suppliers possess these ‘strengths and capabilities’ (Patagonia, 2025). This aligns with arguments from Rehman (2023) as companies outsource production to alleviate the employer responsibility. Yet, systematically these suppliers are defenseless because exploitation of the Global North has made it impossible to implement systemic change (Rehman, 2023). Despite its utilitarian values, Patagonia benefits from low labour costs of globalisation, highlighting its egoist approach which ultimately harms the supplier countries. Alternatively, Heugten (2023) argues the new ownership model is laced with egoistic sentiments, as selling the company outright gives away voting shares entirely and requires around 700 million dollars to be paid in taxes. This harms the government as less can be spent towards public welfare initiatives. Yet, many question how America tax dollars are spent, especially towards welfare (Campbell, 2025). Still, selling the company to an egoistic leader who values shareholder primacy over environmental conservation, will damage the culture embedded in Patagonia as well as eliminate the utilitarian initiatives (Moriarty, 2021). Therefore, Patagonia frames the ownership model as maintaining the original values through voting shares and giving back to the community and environment, rather than egoistic interests (Heugten, 2023). 

3.3 The Stakeholder Perspective 

The conflicting approaches of utilitarianism and egoism, showcase how complex BDM is, especially in relation to balancing stakeholders’ interests. The Salience Model (Mitchell, et al. 1997) provides ease in determining stakeholder group (SHG) importance, but Tashman and Raelin (2013) argue its flaws arise from managerial capability. In practicality, managers view shareholder interests (SHI) as mutually exclusive, justifying tradeoffs and showcasing how managerial cognitive capabilities towards creative problem-solving may be limited, whereas opportunistic managers may instead rationalise SHG neglect (Tashman and Raelin, 2013). Patagonia possesses intangible resources through brand messaging and positioning, compared to foreign suppliers’ tangible resources (Raha, et al 2021). Suppliers face weak governance systematically created by Global North through imperialism and wealth extraction, creating competition and replaceability, aiding in labour exploitation (Rehman, 2023). Patagonia’s best interest is considering this SHG due to potential reputation issues as its code of conduct and company values are against labour exploitation (Patagonia, 2025). Alternatively, despite sustainability insights in the ‘Work in Progress’ report, Patagonia considers the Earth a SHG. This report argues the Earth is a definitive stakeholder as its voice of legitimacy, urgency, and power is heard through global warming, natural disasters, resource depletion, and death of entire ecosystems. Still, Tashman and Raelin (2013) argue power is determined by whether SHGs are aware of critical resource control and ability to withhold them. Here, Earth’s powerlessness categorises it as a dependent stakeholder. It is argued however, corporations should consider the Earth as definitive since capitalism and wealth accumulation cannot exist when the world is devoid of its resources. Unlike other fashion brands, it seems Patagonia makes genuine efforts to avoid neglecting this SHG as Patagonia uses its brand to spread environmental awareness.

3.4 Addressing the Social Responsibility 

Commonly, Friemand (1970) argued against Carroll’s (1991) CSR pyramid due to decreased profits and duty towards shareholders, yet he further argued CSR allowed private citizens/business-people to participate in the government sector without barriers, undermining the democratic system (Hess, 2025). However, Moriarty (2021) disagrees as governance participation showcases community and collective BDM. Patagonia utilises this through lobbying against government bills which produce environmental and community harm  (Patagonia, 2025). It is argued American politics is infiltrated with egoistic, neo-capitalists who lobby for profit maximization at the expense of the environment, therefore, it is crucial the opposing voices are heard in the political sphere (Moore, et al. 2024).  Similarly, it is apparent businesses use power and knowledge for egoistic pursuits through tax invasion and loopholes (DeVito and Grossetti, 2024). Patagonia’s decision to split its ownership into Holdfast Collective and Patagonia Purpose Trust, showcases even ethical companies seek tax avoidance under a veil of environmental conservation integrity (Patagonia, 2025). This showcases a grey area between CSR’s legal and ethical realm. However, Carroll (2016) adjusted his argument so instead of ethics being separate from other categories in the pyramid, it permeates all the levels (Melé, 2024). Again, this showcases the importance of embedding ethical culture into businesses, as it allows ethical behaviour to transcend into all departments, creating an entire ethical identity. While no business is perfect, Patagonia is doing well when it comes to CSR as no level is disregarded. Additionally, an ethical essence is present within each one, highlighting prominent ethical culture.

3.5 Addressing the Moral Responsibility 

In addition to the CSR debate, academics question whether firms can possess corporate moral responsibility (CMR). Moriarty (2021) argues firms cannot be held morally responsible since they lack human capabilities such as bodies, minds, belief, desires, emotions, consciousness and ability to pursue happiness. Therefore, BDM is done by individuals rather than the firm.  (Moriarty, 2021). However, (French, 1979) disagrees as firms act intentionally through their internal processes, contributing to events fulfillment. Still, Sepinwall and Orts (2017) argue firms practicing CMR provides shields for managers from accountability by permitting misbehaviour through concealment and legal defenses. Simultaneously, individual members cannot be blamed for misconduct due to power of conformity in organisational environment and culture (Craig, 2014). Even so, Ardley and May (2020) argue that corporations are not fixed entities, and those behind business creation can harness previous creative power to generate moral behaviour. Patagonia utilises this capability through its decade-long journey to systematically change the migrant workers' rights in Taiwan against labour brokers (Patagonia, 2025). Upon discovery through the audit system, Patagonia decided to take moral responsibility rather than disregarding the situation. It can be argued this behaviour or initiative stemmed from Patagonia’s core ethical values and culture. Specifically, the members with human morality capabilities uphold Patagonia’s values, contributing to the firm acting in unison or as a moral entity. Ultimately, this showcases that moral responsibility must not be placed in the hands of the corporation but rather the corporation is the outlet in which morality can be presented by humans alone.

4.0 Synthesis and Implementation 

John et al. (2023) highlights the challenges socially responsible corporations face in capitalistic societies, in terms of balancing profiting and ethical values. The Patagonia ‘Work in Progress’ report highlights these pressures. Patagonia’s brand prioritises environmental sustainability, through activism and circularity, however the report showcases Patagonia still impacts the world in a detrimental way. This highlights brands can have ethical intentions and actions to prove their commitment to changing the fashion industry, however its survival in capitalism means exploitation and resource extraction still persists. This report argues Patagonia excels at CSR, environmental activism, and spreading awareness around environmental concerns, but there must be improvement towards reducing emissions, graduating from polyester and virgin fabric usages, and ensuring labour exploitation practices are eradicated. Even so, most fashion companies resort to egoistic approaches through trend culture which support labour exploitation and short life cycles of clothing, showcasing how the fashion industry is the second most polluting industry in the world (Rehman, 2023). Therefore, in comparison, Patagonia opposes such business models and provides an alternative to fast-fashion brands. Patagonia signifies not the final destination for ethical and sustainable fashion companies, but instead shines a beacon of light towards a positive direction the industry should take. Furthermore, suggestions towards implementation is necessary because with it NET only encourages preaching, rather than laying the groundwork of how BDM can be informed, thoughtful, and born from good judgement. Therefore, this report suggests (1) reduce the production of high-emission products like duffels and backpack, (2) fund product development towards biodegradable and natural fabrics, and transition away from polyester, and (2) implement principled dialogue with the suppliers who have not received a living wage yet.

5.0 Conclusion 

In conclusion, the report has contributed towards the research around how ethical and sustainability can be blended with the confines of capitalistic societies, through the lens of normative ethical theories, stakeholder theory, as well as leadership and culture. Then this report  analysed Patagonia after they released a radically transparent sustainability report, which is not required from privately held companies. Here, Patagonia informs its stakeholders their business practices are not as sustainable as marketed. While some may argue this as greenwashing, this report finds Patagonia innocent through the transparency seen in the ‘Work in Progress’ report, as well as its effort towards environmental activism and conservation. In agreement with the title of the report, Patagonia still had progress to make towards reducing emissions, eliminating nonbiodegradable products, and ensuring foreign suppliers are paid livable wages. Patagonia’s report highlights how ethical businesses have a tedious job of balancing the survival needs of profitability while aiming to contribute to the common good of the planet and its communities, or in other words, upholding the utilitarian values of the firms. Finally, this report offered recommended action for Patagonia in order to address the behaviour that goes against its values. A future area of research is determined by Wilkins (2025) and whether Patagonia’s communication and marketing inflates the emotional reverence consumers give them and where is line drawn for ethical corporations. 

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