In the previous post we looked at commercial fashion shows and pondered a bit about the impact of the cult of celebrity in fashion. Yet yesterday there was also an interesting announcement that pointed to an alternative to being always under the limelight.
The founder and owner of outdoor brand Patagonia, Yvon Chouinard, decided indeed to take a step back and gave the entire company to a uniquely structured trust and non-profit that will use Patagonia's profits to fight the climate crisis. The brand's website now states: "Earth is now our only shareholder."
But how does that work? Essentially Patagonia will continue to operate as a for-profit corporation based in Ventura, California, but the Chouinard family will no longer own the company nor receive any profits. The voting stock - equivalent to 2% of the overall shares - was indeed transferred to the Patagonia Purpose Trust. Overseen by members of the family and their closest advisers, the Trust will make sure the company's values will be preserved.
The other 98% of the company’s stock, its common shares, will go to a US non-profit called the Holdfast Collective, that, according to an official statement will use all the profits, and every dollar received "to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible". The Holdfast Collective is a 501(c)(4), which allows it to make unlimited political contributions and the family received no tax benefit for its donation.
A man with a passion for rock climbing, Chouinard, 83, first started making metal climbing spikes for himself and his friends, then moved onto clothing and eventually created his own outdoor clothing brand in 1973.
Chouinard has remained a free spirit, though, abhorring excessive wealth, living in modest homes and driving ordinary cars, revealing to the New York Times that he was horrified when he discovered he was listed in Forbes as a billionaire.
It must be said that, while forfeiting the ownership of the company was a unique decision, it may not come up as a total surprise: the Chouinards are among the most charitable families in the US and the company has always had a genuine interest in environmental causes and always focused on its employees' health and wellness (the company has on-site nurseries and allows employees to take afternoons off on good surf days). Besides, Patagonia started donating in the '80s 1% of the company's sales to environmental groups (the donation then turned in 2001 into the "1% for the Planet Scheme").
Patagonia was one of the earliest companies to achieve B-Corp certification, and became known for its adverts discouraging people to buy its products. The slogan "Don't Buy This Jacket" was meant to remind people how much clothes controbute to pollution, even though the brand's products are actually meant to last a lifetime, and are made using less water and the least dangerous chemistries and dyes (on top of this, the company also offers reasonably priced repairs). In more recent years, Patagonia turned more politically active as well, sueing the Trump administration to protect the Bears Ears National Monument.
Critics wonder if this plan will work out and if profits will genuinely rise now that the family is not interested in making any profits as they will not be receiving any; at the same time, with this decision Patagonia may have found new consumers especially among the younger generations who love sustainability and abhor greenwashing.
For now, Chouinard's decision not to go public, but to "go purpose" and his choice to combine a thriving business with a thriving planet remains unique, going further than Brunello Cucinelli's "humanistic capitalism" and combining environmental and social activism. Not many, or probably nobody, will follow Patagonia's example, but the brand has just taught us a lesson - stepping back may be the key to move forward towards a better future.
Comments