The family who owned the Patagonia clothing company recently gave the company to a new trust which will take all the profits and dedicate it to fighting climate change. Meaning that the $3 billion company will now spend the $100 million in profits it generates annually on good things. The billionaire family hopes that their action will inspire other insanely wealthy people to do the same with their companies.
“Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” Mr. Chouinard, 83, said in an exclusive interview. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
Patagonia will continue to operate as a private, for-profit corporation based in Ventura, Calif., selling more than $1 billion worth of jackets, hats and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company.
A triple bottom line corporation is one that watches closely not only profitability but also it’s sustainability. Triple bottom line companies are on the rise not only in performance but also in popularity as more people realize the fragility of the planet and the lack of attention we give it.
Triple bottom line companies give equally weighting to environmental goals and economic goals which can make the company more profitable, but some companies may take a competitive hit. For those companies, a group in the USA is fighting for a new type of corporation known as a “benefit corporation”.
Proponents of this new corporate form say it essentially bakes a triple bottom line into a companyâ€™s DNA that frees companies from the fear of shareholder lawsuits if their decisions fail to maximize shareholder value because of some competing interest of other stakeholders, such as workers. Under current corporate case law in the United States, for example, corporate directors are generally assumed to be liable in such suits. Incorporation as a benefit corporation is intended to establish the directorsâ€™ fiduciary responsibility to consider the interests of all stakeholders. Formalizing a companyâ€™s social and environmental purposes under a legal framework also makes it more likely that its good intentions will survive the departure of its founders or any major spurts of growth and that its directors will have the legal backbone to fend off buyout offers from conventional corporations that do not have the same commitments.
Most benefit corporations to date are either small or medium-sized businesses. But they include a few larger companies that are privately held, such as the outdoor apparel and accessory firm Patagonia Inc., which reportedly had annual sales of about $540 million for the year ending April 2012, and King Arthur Flour, an employee-owned, 223-year-old company with reported sales of about $84 million in 2010.