• Lucy Faulkner

Patagonia Put Purpose Before Profit: Will Others Follow Suit?


© Illustration by INJECTION - Lin


Will Patagonia's bold new business tactics be the trigger the fashion industry needs to finally move in an environmentally friendly direction?


Patagonia is a fashion brand for the adventure-seeking, outdoor-exploring, sustainability-minded consumer. And now, with the announcement of their new business structure, we are reminded that they are the brand for the environmentally-conscious too.


Two weeks ago, Patagonia owner, Yvon Chouinard (who also boasts the accolades of renowned rock climber, philanthropist and environmental pioneer), gave away his entire company to charitable trusts in order to fight the climate crisis in a business move that is, quite genuinely, unprecedented for a fashion company.


2% of the company (the profits required to run the business) is now owned by a newly founded trust called “The Pagaonia Purpose Trust”, which will act to make decisions on behalf of the company. The remaining 98% (which is also 100% of the company’s non-voting shares) was gifted to The Holdfast Collective, a social welfare organisation working to fight the environmental crisis by helping protect nature. Aside from gains required to reinvest into the company, all profits are given to this collective to carry out their world-improving work.


© Patagonia: Yvon Chouinard - Earth is now our only shareholder


The motives for this pioneering new business strategy should be commended. When his children decided they didn’t want ownership of the company, this strategy was put in place. As such, it allows all business-related decisions to be maintained by Yvon and his company so it remains profitable, while simultaneously ensuring that the values of ethical consideration, sustainability and environmentalism are maintained and profits actually do contribute to their intended cause. This is particularly poignant, as it comes as a time when fashion brands are constantly critiqued for their lack of transparency.


Nevertheless, it’s still the fashion industry we’re talking about and, by now, we’ve all learned to take what the big businesses tell us with a pinch of salt. Is this all too good to be true?


Thankfully, it seems that even upon the closest cross-examination, Patagonia come out nearly squeaky clean: their self-imposed “Earth Tax” donates 1% of profits to grassroots environmental organisations, the majority of their products are made with recycled materials, they work alongside animal welfare charities and have even launched a campaign encouraging people not to buy their products in order to promote conscious consumption. In fact, the only reason they don’t score “Great” on Good For You (a well reputed sustainability-rating platform), seems to be lack of disclosure of their good work, rather than any evidence of the opposite.


Patagonia therefore, seems like the poster for sustainable fashion. Now, as they hold such a status, their bold brandishing of a new slogan “Earth is now our only shareholder” appears like a nod to other fashion brands to follow suit.


Of course, many fashion brands are making steps towards increased transparency and sustainability: Ganni recently announced they are B Corp certified, and they are vocal advocates of anti-greenwashing; Italian watch brand Panerai have partnered with UNESCO to undertake an ocean conservation project; in the past week Balenciaga announced the launch of a resale partnership in an attempt to encourage a more circular fashion economy.


Yet, while these brands push for progress, (too) many of their colleagues lag behind. Is it because what Patagonia has done isn’t feasible for others? The unfortunate truth is that a fundamental structural business change as major as Patagonia’s is not something that every brand can do - smaller, more niche and start-up brands, even those with sustainable values, simply don’t have the capital to do so without crumbling.


However, for companies such as LVMH and Kering, and the brands they own (the likes of Gucci, Louis Vuitton, Bottega Veneta and Dior), following in Patagonia’s footsteps is more than doable. LVMH’s combined brand revenue in 2021 was 64.2 billion euros - over 20 times the amount Patagonia gave away - and its CEO Bernard Arnault is the world’s third richest man. Clearly, the issue is not a financial incapability, but an altruism one. In 2022, it’s not enough for brands to be groundbreaking only in fashion design, they must also be in business. They must be willing to sacrifice some personal gain in favour of gain for the planet.


At the very least, the news of Patagonia’s disruptive re-strategy should incentivise other brands to think more innovatively about how they too can contribute to climate action, particularly as part of an industry that plays a large role in disrupting it. Any brand, no matter global or local, cult or mainstream, can be inspired by Patagonia to think more creatively about how they can make environmental and sustainable decisions, across all elements of their business, in ways that haven’t been done before. Enough brands have introduced bio-materials to know that this alone does not make the industry environmentally friendly.


Perhaps capitalism can never be truly climate conscious. Any claim of sustainability is met with scrutinous eyes and a flaw is found regardless of how well the intentions are. Yet, this time, it feels like Patagonia has truly found a way to be transparent, authentic, innovative and environmentally aware at the same time. Fashion becoming more climate-conscious is not something that can be achieved by one brand alone, but we can hope that Patagonia’s latest venture will be the necessary catalyst for the industry to finally change its ways, and for consumers to stop being complacent with brands doing the bare minimum.