Patagonia Billionaire Transfers Ownership of Retailer to Climate Change Efforts

It’s not enough to give a 1% profit every year and push others to do the same to save the earth that Patagonia Adventure customers consider their playground.

In the year Fifty years after it was founded in 1973, billionaire Yvonne Chouinard and his family are handing over $3 billion of the privately held outdoor clothing retailer to two entities that will shift profits to fighting climate change and conserving virgin land. Rock Global-turned-executive said in a letter Wednesday.

Chouinard, his wife and two grown children transferred their ownership to maintain the company’s independence and ensure that all of its profits—about $100 million a year—are used as intended. Going forward, all voting stock, about 2% of the total, is now controlled by the Patagonia Purpose Trust, with the remaining 98% under the Holdfast Collective.

Chouinard said he has worked on other ways to raise capital and profits to steer his management team and employees more toward environmental and resource-saving initiatives, such as a public stock offering or an outright sale of the company. But he says these alternatives cannot guarantee the survival of Patagonia’s values. Thanks to Wall Street investors, SPX said going public was never an option.
Unrelenting pressures to create short-term gains sometimes result in long-term liability. In fact, “Reimagining Capitalism” heralds the transformation of the company.

From the archives (June 2020): Patagonia joins North Face, REI over misinformation and hate speech on Facebook forum.

The new structure is unusual to say the least, but there is at least one high-profile example – Ben & Jerry’s battle with parent company Unilever ULVR;
– It reflects some similar good intentions alongside the complexities of seeing efforts survive as intended.

Still, the move sent ripples through retail and philanthropic circles.

“Yvon Chouinard inspires every company with any sense of moral conviction to rethink their relationship with the environment,” said Fred de Gombert, CEO and co-founder of Akeneo, a product information management platform that works with more than 600 brands and retailers, including Carhartt. , Forever 21 and Sephora. “We all need to learn from this that it is not enough to ‘concern’ about the environment, but companies and the people who work in them must participate as actors in environmental protection.”

Adding disturbing information

Record high weather in recent years may have swayed Chouinard’s decision.

CL00 associated with heat, drought, flooding and climate change and burning of fossil fuels;
+ 0.34%
A new report combining the efforts of the World Meteorological Organization and other climate change watchdogs said earlier this week that it is increasing faster and more rapidly than previously suggested.

The past seven years have been the warmest for Earth. Looking forward, there is a 48% chance that at least one year in the next five years average temperature will temporarily rise 1.5 degrees Celsius above the 1850-1900 average. That’s the temperature limit set at the Paris International Climate Conference, and it’s the goal that currently drives most climate change policy. But given that target, the team’s findings warn that as global warming continues, disruptions to “tipping points” in the climate system, such as major Arctic melt, cannot be ruled out.

Instead of “going for the masses” you can say “we are going for a purpose”. ‘

– Yvon Chouinard

The report warns that while global commitments to cut emissions among countries and corporations show limited awareness among leaders of the risks ahead, those plans may fail.

Original ‘Benefit Corporation’

In a letter posted on Patagonia’s website, Chouinard detailed the company’s efforts to keep its customers outdoors to this day. This includes using environmentally friendly materials, donating 1% of sales annually, and establishing the company as a B Corp and California Benefit Corporation. In fact, many viewers wonder why Patagonia is a corporate entity. In the year In 2018, the company’s mission was rewritten as “We’re in business to save our home planet,” and Patagonia is famous for offering “flex time” that encourages employees to walk and get outside while at work.

Living with climate change; Yoga enthusiasts are breaking Lululemon’s ties to coal-fired factories

But Chouinard realized that these efforts were not enough.

“We had to find a way to spend more money to fight the crisis while keeping the company’s values ​​intact,” he wrote. “To be honest, there were not good options. So we created our own. Instead of ‘going for the people’ you can say ‘we are going for a purpose’. The earth is our only stakeholder.

Sustainability-minded observers generally encouraged a significant gesture. But some wonder if the move has stopped short of forcing the fashion and apparel industry to rethink its practices.

Although this move lays out a blueprint for what other owners can do to support the environment, the apparel industry as a whole does not provide a blueprint for how to reduce environmental impact, he said. Actually, it creates virtual reality/augmented reality software intended to help consumers shop for clothes that fit.

“The best way for clothing companies to reduce their excessive carbon footprints is to reduce the waste associated with production, logistics and often their toxic effects, not to encourage more sustainable consumption,” said Sharma.

From the archives (February 2022): Patagonia, REI, North Face and others threaten to cut the major outdoor scene if it moves to Utah.

Also (March 2022): The outdoor retailer will be moving to Utah next year

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