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Patagonia will Donate All of its Revenue to Fight Climate Change

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Photo Credit: New York Times

Patagonia’s founder, Yvon Chouinard, declared that he would donate all of the company’s profits to the effort to combat the climate problem. The statement indicates that the Chouinard family will not make money from the business. Instead, Patagonia would contribute profits to groups and causes supporting environmental initiatives, land preservation, and biodiversity.

The Chouinard family created Patagonia 50 years ago, and it has subsequently provided clothing to several merchants. According to the New York Times, the firm is worth $3 billion.

Under the firm statement, regular business activities and worker pay rates will continue. Partner groups and businesses would get the funds that weren’t reinvested or went toward maintenance and other running costs. For instance, Patagonia established the Holdfast Collective and Patagonia Purpose Trust, two charitable nonprofits.

Currently, Holdfast Collective owns 98% of the company’s non-voting stock, while Patagonia Purpose Trust has 2% of the total number of shares from the voting stock.

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To reimagine capitalism

In a letter published on its website, Patagonia said that it is past time for society and businesses to rethink capitalism:

“While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact. One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.”

Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.

Truth be told, there were no good options available. So, we created our own.”

Patagonia anticipates making and giving more than $100 million a year once everything is in place. And this number will change based on the business’s profitability as well as customer buying patterns.

Products from Patagonia include equipment for outdoor sports, including camping, fishing, and rock climbing. The brand also offers food and drinks made with sustainable components, as well as additional outdoor clothing.

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The company will still be aggressive

According to Ryan Gellert, CEO of Patagonia, the firm can only achieve its aim if it continues to behave in the same manner as previously and uses its revenue-generating equipment as aggressively as possible.

“I think what people fail to understand about Patagonia, both the past and today and the future, is that we are unapologetically a for-profit business,” said Gellert.

“We are extremely competitive. The Chouinards are extremely competitive about the business. We focus on making high-quality products, standing behind that product for the usable life of it. We compete with every other company in our space aggressively. I don’t think we have lost that instinct.”

It took the family several years to decide, according to Gellert. He continued by saying that while the owners intended to commit the business to a philanthropic purpose fully, there was also a focus on building a framework that would uphold and maybe even strengthen Patagonia’s present ideals.

According to Gellert, Patagonia pays its taxes and will keep doing so despite the recently-enacted agreement.

“We are a company that very much believes in that. We are a company that has avoided complex structures both in the U.S. and globally to sidestep taxes. We are actually one of the few companies that have lobbied consistently and publicly for higher taxes, particularly in support of climate legislation,” Gellert added.

Patagonia is one of the few businesses starting the process of rethinking capitalism as the globe struggles to combat the impacts of the climate catastrophe. The business changed the tagline on its website to read, “Earth is now our only shareholder.”

Source: CNBC

Jerry Cooper is a reporter who is based in New York. He has previously worked for several media organizations, including NY Wire.

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