“Earth is now our only shareholder.”
This is the statement that Patagonia put out and that they have transferred the ownership of the privately owned company (purported to be worth £3bn) to a trust and non-profit actually - but what does it mean? What have Patagonia actually done? Here's a simple explanation.
The company owner Yvon Chouinard was an avid climber and made climbing gear for his friends, eventually turning it into a small business. With a passion for nature Yvon was concerned about the damaging impact that humans were having on the earth. As Patagonia grew, he sourced materials that have a low impact on the world, gave 1% of turnover away, and eventually became a B Corp.
In 2018 they changed the company’s purpose to: “we’re in business to save our home planet”.
NEW STATUS QUO
So, in 2022 what have they done? How will this impact the retail sector and is it something that we can all follow?
This year realising that there is so much more to be done to save the planet and protect the environment Yvon and co wanted to raise significantly large amounts of money. They considered selling the company entirely or floating the company but both of these options potentially led them down a road towards capitalism at its worst. So, as Yvon puts it, “instead of ‘going public’ we’re ‘going purpose’”.
This is how they’ve done it:
In short – business-related decisions must be true to Patagonia’s purpose to “save our home planet” and the profits from these decisions all go to a non-profit dedicated to fighting the climate crisis.
Yvon closes his letter to the public with this stark warning that reminds us that there is hope, but we need to act:
“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.”
Is this the true marriage between profits and purpose? Is this the model for making sustainable business become a reality? Let us know what you think – email us at firstname.lastname@example.org.
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