When Nau, an outdoor clothing start-up from Portland, Ore., launched in 2005, word on the street had it that the company would push socially responsible business to new heights. Nau’s vision featured sustainable fabrics, an energy-saving retail plan, and outsized corporate philanthropy. Its leadership was an all-star team plucked from Patagonia and Nike. And its fans in the press practically swooned, with outlets ranging from Fast Company to Sustainable Industries to Treehugger calling Nau...

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