Earlier this month, Yvon Chouinard founder of US retailer Patagonia donated his company to a charitable trust. The unique ownership model will see 98% of the company and non-voting stock transferred to The Holdfast Collective, and the remaining 2% of the company retained by the Chouinard family in a new ‘Patagonia Purpose Trust’. The Holdfast Collective will reinvest all of the annual profits not reinvested back in the company into efforts to fight climate change. The trust will hold the voting stock and will be used by the family to create legal structure which ensures Patagonia’s values live on. It is estimated that Patagonia will generate and donate $100 million annually to sustainability and environmental initiatives.
Patagonia has long supported environmental activism and has been innovative in doing so:
US footwear brand Toms:
Japanese car manufacturer Toyota
These are just a few examples of the innovative ways in which companies of all sectors are seeking to become more sustainable. See also: Toy manufacturer LEGO’s commitment
With increasing government measures in place, including different tax rates, companies benefit from being ahead of the curve. For example, in California, all taxi serves must be fully electric by 2030 under a new mandate. In response taxi provider Uber has committed $800 million to help drivers transition to fully electric vehicles by 2025.
A recent Shelton Group study revealed that 90% of millennials would choose environmentally friendly businesses over non-sustainable counterparts. As it stands, millennials are the largest consumer demographic. By committing to sustainable practices, companies can cultivate a better brand image and build an affinity with their target customer.
By axing packaging, companies save money on manufacturing. By reducing energy usage in the office, utility bills will be lower and therefore will be an overall reduction in the long-term. Although there may be short-term costs in innovating and investing in new materials or business practices, consumers are willing to pay more for their goods where they know the company has committed to sustainability.
Talking points: Do you think any companies will follow Patagonia’s approach or is the Chouinard family a one-off?
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