Photo Credit: New York Times
Patagonia’s founder, Yvon Chouinard, stated that he would donate all of the company’s profits to the battle against climate change. According to the declaration, the Chouinard family would not profit from the enterprise. Instead, Patagonia’s profits would be donated to groups and causes working to safeguard biodiversity, land, and the environment.
Patagonia was formed 50 years ago by the Chouinard family and has subsequently sold clothing to various merchants. According to the New York Times, the brand is worth $3 billion.
According to the corporate statement, normal activities will continue, and employee wages will remain unchanged. The funds that were not reinvested and a portion of the maintenance and other operational expenditures would be distributed to partner groups and businesses. Patagonia, for example, established two cause-oriented nonprofit organizations and trusts, the Holdfast Collective and the Patagonia Purpose Trust.
Patagonia Purpose Trust holds all of the company’s voting shares, accounting for 2% of total equity, while Holdfast Collective controls 98% of the non-voting stock.
A better version of capitalism
Patagonia published a message on its website in which it stated that it is past time for society and industry to reinvent capitalism:
“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. One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.”
Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.
Truth be told, there were no good options available. So, we created our own.”
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With everything in place, Patagonia intends to earn and contribute more than $100 million every year. And the amount will change depending on the company’s profitability as well as customer’s purchasing patterns.
Patagonia produces a wide range of items, including outdoor gear for activities such as fishing, climbing, and camping. Other outdoor gear, as well as food and drinks made from sustainable sources, are available from the brand.
The company will be competitive
Patagonia CEO Ryan Gellert stated that the company’s aim could only be attained if it continued to behave in the same manner as before and its revenue-generating machinery continued to operate, potentially more aggressively than before.
“I think what people fail to understand about Patagonia, both the past and today and the future, is that we are unapologetically a for-profit business,” Gellert added.
“We are extremely competitive. The Chouinards are extremely competitive about the business. We focus on making high-quality products, standing behind that product for the usable life of it. We compete with every other company in our space, aggressively. I don’t think we have lost that instinct.”
Gellert claimed that the family deliberated for years before making the proclamation. He said that, while the owners intended to commit the firm to a humanitarian purpose totally, there was also an emphasis on creating a system that would retain and maybe strengthen Patagonia’s financial status.
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According to Gellert, Patagonia pays its taxes and will continue to do so despite the newly imposed arrangement.
“We are a company that very much believes in that. We are a company that has avoided complex structures both in the U.S. and globally to sidestep taxes. We are actually one of the few companies that have lobbied consistently and publicly for higher taxes, particularly in support of climate legislation,” Gellert further said.
As the globe attempts to fight the impacts of the climate crisis, Patagonia is one of the few corporations to take the early steps toward reforming capitalism. The company’s website has been revamped with the statement, “Earth is now our only shareholder.”
Source: CNBC
