The Future of the Responsible Company: What We've Learned from Patagonia's First 50 Years
Vincent Stanley with Yvon Chouinard
208 pages, Patagonia, 2023
The Future of the Responsible Company opens with an insight from Haida leader Gerald Amos: “The most important right we have is the right to be responsible.” This upends the idea of responsibility from obligation to agency, the freedom (and motivation) to attend and respond to what we care about and concerns us. The right for everyone, and every business, to be responsible is critical to meeting the social and ecological challenges of our time.
Most of the book focuses on the elements of responsibility for business and how exercising responsibilities to employees, customers, the community, and the natural world—as well as to the balance sheet—helps build a solid business and provide meaningful work. The story we tell is Patagonia’s 50-year journey toward responsibility. But as the title promises, we close with notes toward the future, on ways we see of making a decent living, both for young people starting out and for the companies they will work for in the decades to come.
The last chapter offers a perspective on how we see our own future in light of two significant changes in our purpose and structure. In 2018, we sharpened our purpose statement from “Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis” to the more definitive “We’re in business to save our home planet.” Yvon Chouinard sparked this for two reasons: We now see ways, especially through regenerative organic agriculture, to go beyond reducing adverse impact, to give back—to human communities and the nature we’re a part of—as much or more than we take, to move the business model from extraction toward regeneration.
Aligning our structure in line with this clarification of purpose, the Chouinard family transferred its ownership in 2022 to the Patagonia Purpose Trust, which owns the shares and the Holdfast Collective, which distributes its dividends to conserving and restoring the planet’s ecosystems. This effectively makes Earth Patagonia’s sole shareholder.—Vincent Stanley and Yvon Chouinard
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“Every billionaire is a policy failure” is a bumper sticker Yvon liked well enough to put on his car. We both remember talks we had long ago on the way to visit an ailing friend about the need for Patagonia to be owned, ultimately, by a nonprofit, but that wasn’t possible until 2018. With the recent shift from private ownership to the Patagonia Purpose Trust and the Holdfast Collective, the four adult members of the Chouinard family have happily found a way to stay this side of being a policy failure.
Patagonia remains a for-profit business, but its single shareholder is now the Earth or, to be precise, the benefit of the Earth. Patagonia will continue to reinvest a significant share of its profits back into the company each year and distribute another significant share of profits as bonuses to employees. The company will continue, through its Grants Council, to give its 1 percent of sales to grassroots environmental organizations. None of this will change.
What has changed is the structure of our company, which now aligns fully with its purpose. We hope others who have done well will see that they have enough for themselves and their families and follow suit.
Foundation-owned businesses, new to the United States, have been a feature of the northern European business landscape for more than a century. More than 50 percent of the German stock market value is in companies that have foundations as majority stockholders. Ikea, Rolex, and Heineken are owned by foundations. The Carl Zeiss Foundation has owned 100 percent of Carl Zeiss AG since 1889.
Our new structure doesn’t ease the challenges we faced when we were family owned. With 97 percent of our environmental impact in the supply chain, most of it in the fabrics we use, we have much to do in the coming decades.
By the time you read this, Patagonia will have stopped, or nearly stopped, using newly drilled oil as feedstock for nylon and polyester, without sacrificing performance and durability. To forgo new oil in the making of synthetics puts to new use what is already made, for which the Earth has already literally paid a sunken cost.
The transformation of agriculture for fiber and food is as necessary as the greening of industry. By the end of the decade, we aim to switch to regenerative organic cotton and hemp for all our natural-fiber clothes, and in the process rebuild soil. For Patagonia Provisions, every new product, from the land or sea, must solve a problem in our food supply, as well as be nutritious and of superior quality. We will build awareness of small-scale farming and fishing, which needs financial, consumer, and political support.
The original customers of Chouinard Equipment were our friends, or friends of friends, who trusted their lives to the quality of our gear. We have always defined quality as durability, functionality, and as much versatility as possible. But quality in our age also means going beyond doing less harm to Mother Nature and actually returning the favor of her abundance. This means, ultimately, no pollution, no waste, no extraction in service to the pockets of the few at the expense of the many.
For the web of life to survive, we need to protect and restore vulnerable, degraded, and critically important land and water where we don’t live, where the “hand of man does not linger” or where Indigenous communities have lived lightly for millennia. In the 2020s and 2030s, Patagonia will invest in activities that advance restoration ecology (giving nature the chance to revive), reconciliation ecology (letting nature thrive where we do our work), and the rewilding of species.
The work being done in Halifax1 is a far cry from how we operate at Patagonia, but we’re paying attention to its lessons. This regenerative, circular place-based effort represents the best possibilities for business as a social sector (along with civil society and government). Whether a business is owned by an individual, a family, a joint-stock company, or the Earth, it can, if it chooses, work in concert with all sectors of society in the interests of the common good and nature.
Patagonia will work with allies to support the marginalized communities most impacted by environmental injustice. Chemical, oil, and gas plants are not built in Grosse Pointe or Marin County. They crop up where rents are cheap and voices are not heard—in Cancer Alley between Baton Rouge and New Orleans, or Chemical Alley along the Kanawha River in West Virginia, or in the neighborhoods next to the refineries of Richmond, California. In our state of California alone, people of color make up nearly 92 percent of the 1.8 million people living within a mile of oil and gas development, all at greater risk of chronic headaches, asthma, and cancer.
Nativists around the world, displaced by the global economy, displaced by institutions that failed them, have been courted by opportunist politicians with promises of restored social status and security at the expense of immigrants and minorities. We need to support a politics and an economic vision that leave no one behind.
Patagonia, in this decade and those to come, is committed to democracy. This isn’t nostalgia for what we learned in civics class but a necessity for saving ourselves and nature. The autocrats and plutocrats of the world will never work for harmony and justice that would put them out of business. As difficult as it is to identify common ground and cause, saving the home planet is the work of us all.
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On September 14, 2022, local Patagonia colleagues and many former employees and friends gathered at our Brooks School campus in Ventura. Many other colleagues and friends from Reno and around the globe joined by video link. By then, we had all survived, like our readers, nearly three years of COVID, four years of Trump, and a decade of increasingly chaotic and deadly weather. For our local employees, the memory of the Thomas wildfire was still fresh, a symbol of the uncertainty inherent in our times. That day, in the Brooks campus garden, Malinda and Yvon Chouinard, and their adult children, Claire and Fletcher, announced that they no longer owned the company, they had given it to the Earth.
Cheryl Endo, a veteran employee who has long helped the design department keep operations on track, went up to our CEO, Ryan Gellert, and said, “I’m not taking any more of your guff.” When Ryan looked puzzled, she added, pointing to a tall jacaranda nearby, “I don’t work for you anymore. I work for that tree over there.”
So should we all.