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Category: Business Ethics

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Ethically Environmental: Patagonia’s Priority…The Planet

We don’t see many examples of companies taking a stand for their values, let alone the environment. Most companies are driven solely by profits rather than values. The way that company leaders view values and profits is usually that they belong in two different worlds –

Patagonia Founder, Yvon Chouinard

profits are the important and valuable aspect of business, while values are something that can be swept under the rug. But every once in a while, a company shines through the darkness of corporate hedonism and exemplifies honest values over profit mentality for the sake of humanity.

This past Wednesday, that values and ethically driven company shined it’s light upon the world. That afternoon word spread that the founder of Patagonia, Yvon Chouinard, had decided to give up his $3 billion outdoor retail company… and not for a reason most people would think. Chouinard gave the outdoor apparel company away in order to help combat climate change. His announcement came via an open letter on the company’s website.

 

He announced that rather than selling the company or taking it public, the company is “going purpose” rather than “going profit,” by making Earth it’s one and only shareholder. 

The overview of the “sale” includes the following:

  • The company’s voting shares—2% of the company—went to the Patagonia Purpose Trust, a trust that is overseen by family and advisors that make important company decisions.
  • The other 98% went to the Holdfast Collective, a nonprofit that will distribute all profits—about $100 million annually—to environmental causes

“It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder. I am dead serious about saving this planet.” -Yvon Chouinard, Founder of Patagonia

 

His decision to choose the planet over profits, has sparked conversations and debates around  the world—from consumers scrambling to support the company’s cause to leaders and executives mulling over the idea of following in Chouinard’s footsteps.

It’s no lie that great companies—especially environmentally and socially responsible ones–are loved and respected for their values and the commitments they make to their communities, customers, and employees. The products they produce are great, but they have never put shareholder wealth at the top of the list.

Yvon Chouinard is a legendary rock climber, avid surfer, nature lover, blacksmith, and falconer extraordinaire. He has lived out of his car selling camping gear he made himself to get by, so he could continue to do the thing he loves to do—be in nature.

The birth of Patagonia came when he started selling rugby shirts after a trip to Scotland, where they proved to be extremely durable climbing shirts. The company was built in 1973 for the passionate climbers and outdoor enthusiasts everywhere that wanted products that were long lasting, durable, and environmentally friendly. Along with the launch, the company’s first catalog featured a leave-no-trace, responsible climbing manifesto.

Over the years Chouinard and the Patagonia brand have made it their mission to sell consumers durable clothing with a free fix guarantee to ensure that they never over produced apparel, or created an overconsumption trend with their consumers. They have continuously worked to make the world a better place by supporting social and environmental causes all over the world, as well as educating their employees and customers, and taking steps to reduce their carbon footprint. They are the poster child of socially sustainable business. There are numerous examples of how Patagonia has put purpose before profits when the issues are not impacting their company.

Patagonia

Patagonia sells out of “Vote the Assholes Out” Shorts

  • The company donates 1% of its sales (a self-imposed Earth tax) to the preservation and restoration of the natural environment, with over $140 million donated since 1985.
  • Chouinard and Craig Matthews, owner of Blue Ribbon Files, created the 1% for the Planet non-profit corporation made up of an alliance of businesses to encourage others to contribute to protecting the natural environment and pave the way for more corporate responsibility.
  • They offer an Iron Clad guarantee, that guarantees their customers replacement, refund, or repair if the clothing is damaged or doesn’t live up to their satisfaction.
  • Patagonia also has a hub that keeps gear in play, called Worn Wear, where they sell used Patagonia gear, offer trade-in credits for items that customers no longer use, provide DIY repair and care tips, and recycle items at the end of their useful lives. They believe that one of the best things they can do for the planet is cutting down on consumption and getting more use out of products that people currently own.
  • They have a venture fund that invests in start-ups that work on environmental issues, called Tin Shed Ventures, since 2013 they have provided over $20 million to 12 companies working for the social and environmental good of the planet.
  • They launched a food company, Patagonia Provisions, that offers organic and regenerative foods to help mitigate climate change.
  • They are a fierce defender of public lands, and in 2017, they sued the Trump
  •  Administration in an effort to protect the Bear Ears National Monument.
  • To ensure the sustainability and recyclability of their clothing, they permanently transitioned away from adding permanent branding or logos to their gear, since the additional non-removable logo reduces the garment’s life span by a lot.
  • Patagonia released a documentary called “DamNation,” that aims to mobilize support the removal of dams, especially those that are deemed harmful and obsolete on order to revive wild fish populations.
  • In 1996, after a group of employees were arrested for protesting against logging, they established a bail policy. This policy helps any employees who is arrested while peacefully protesting provided they take an optional nonviolent civil disobedience training.
  • The provide an Environmental Internship Program that allows employees to take a two month paid leave to work for any environmental group of their choosing.
  • They have never been keen on Black Friday. In 2011, they took out an ad in the New York Times urging people not to purchase their clothing for Black Friday to bring attention to the company’s Common Threads Initiative. And in 2016, they donated 100% of all Black Friday sales to grassroots organizations.
  • This past year, Patagonia donated $1 million to Black Voters Matter and the New Georgia Project to fight restrictive voting laws in Georgia.
  • They launched We The Power, a campaign and documentary film that shines a light on the citizen-led renewable community energy movement happening across Europe. They also became the first commercial customer in California to commit to purchasing 100% renewable energy.

 

This is only the tip of the iceberg when it comes to the causes that Chouinard and Patagonia are committed to. Their website, part clothing store and part educational toolbox, boasts the support of even more of their activism initiatives. Whether or not you agree with their stand, it’s admirable, and honestly astounding that they take such a strong stand for issues aligned with their values especially when they aren’t directly tied to their financial model.

“Environmentalist David Brower was once asked, ‘Why are you conservationists always against things?’ He replied, ‘If you are against something, you are always for something. If you are against a dam, you are for a river.’ I’m also a lover of wild rivers. That’s why our company has been involved in trying to take out obsolete and damaging dams since 1993.” -Yvon Chouinard, Founder/Owner Patagonia

This year Patagonia was named one of the most reputable companies for things like product quality, trust, citizenship, and ethics. The have made their purpose clear and it’s one that extends beyond profits. Patagonia stands for something that people understand and are a very loved purpose-led organization.

We can only hope that Chouinard’s example propels other leaders to become positive influences and light the way for others to assume corporate responsibility and honor company values more than company profits. Because a value driven company always acts in tandem with its mission. And Patagonia has been a leading example in embodying their mission: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.

Note: This article was written for SUNTEX by guest writer, Kari Norvell. Please reach out to SUNTEX directly if you have any questions regarding this article, or the blog post content.

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