Arushi Sakhuja
“Earth is now our only shareholder. If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have. This is what we can do” said Yvon Chouinard, Founder of Patagonia, a sports apparel brand.
Patagonia has been making headlines after the founder, Yvon Chouinard announced that the company (worth $3 Billion) is being donated to fight climate change. In the announcement, Chouinard shared, “Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it,” and we agree. He further said, “While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact.”
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Patagonia’s social initiatives
Apparel workers are among the lowest-paid employees in the world with low social standards that can lead to unsafe working conditions, long hours, low pay, and job discrimination for the workers who are predominantly women. It is a well-known fact that the continual demand for fast fashion furthers the problem at hand. But one brand that has been striving tirelessly over the years to build a robust social-responsibility program is Patagonia.
The programme analyzes and manages the impact the business has on the workers and communities, with an aim to create positive benefits for the lives of the workers. Unlike most clothing companies, Patagonia does not make their own products, rather they design, test, market and sell Patagonia gear.
The company uses materials that caused less harm to the environment and gave away 1% of sales each year to become a certified B Corp and a California-benefit corporation. More recently, in 2018, the company changed its purpose to – ‘We’re in business to save our home planet.’
Further, the company has a self-imposed 1% Earth tax for the Planet, which provides support to environmental nonprofits working to defend air, land and water resources around the globe.
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How will the newly donated company operate?
Patagonia’s stock will now be owned by a climate-focused trust and a group of nonprofit organizations called the Patagonia Purpose Trust and the Holdfast collective (a nonprofit dedicated to fighting the environmental crisis and defending nature). The Holdfast Collective will use the donations to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible. Funding for the Collective will come from Patagonia: “Each year, excess profits—money we make after reinvesting in the business will be distributed as a dividend to the Collective to be used for its work,” the company shared.
The Patagonia Purpose Trust will get all the voting stock, which is 2% of the total while the Holdfast Collective will own the remaining 98% of non-voting stock of Patagonia.The company is expecting to donate $100 million a year, depending on the health of the business.
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“It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started. If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part,” concludes Yvon Chouinard.
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