Patagonia's founder just gave the company away — the latest unusual step in a history of corporate innovations, from being an early adopter of paid parental leave to donating $145 million to the environment
- Patagonia's founder is giving the $3 billion outdoor-apparel retailer to a trust and nonprofit.
- The company says it prioritizes employee wellbeing and sustainability over profits.
Yvon Chouinard, the founder of Patagonia, announced plans earlier this month to transfer the outdoor-apparel retailer to a trust and nonprofit that will use its profits to help combat the climate crisis.
"We needed to find a way to put more money into fighting the crisis while keeping the company's values intact," he wrote.
It's an unusual route to take. But Chouinard wrote that if he'd sold Patagonia and donated the money, he wouldn't have been able to ensure the new owner maintained both its values and employees, while taking the company public would have been a "disaster."
Chouinard hasn't been afraid to mix things up during the 49 years since he launched Patagonia. The company prides itself on prioritizing employee wellbeing and sustainability over profits and has been a pioneer from the start.
"I wanted to distance myself as far as possible from those pasty-faced corpses in suits I saw in airline magazine ads," Chouinard wrote in his autobiography "Let My People Go Surfing: The Education of a Reluctant Businessman."
"If I had to be a businessman, I was going to do it on my own terms."
"Breaking the rules and making my own system work are the creative part of management that is particularly satisfying for me," he added.
Staff can take time off to surf and nurse their babies
Since he founded the company, Chouinard has wanted staff to enjoy their jobs. From the start, he has let employees work flexible hours so they can surf when the waves are right, attend educational courses, or pick their kids up from school "as long as the work gets done with no negative impacts on others."
The policy has "rarely" been abused, Chouinard wrote.
After staff began bringing their young babies into its California headquarters, Patagonia opened a subsidized on-site childcare center in 1984, when there were only 120 others in the US, per the book. It has since expanded this to its distribution center in Nevada, too.
"We encourage our parents to interact with their child by breast-feeding, having lunch together, or visiting at any time," Chouinard wrote. "The presence of children playing in the yard or having lunch with their mothers and fathers in the cafeteria helped keep the company atmosphere more familial than corporate."
It also provides stipends for staff who don't have access to the on-site childcare centers and pays for caregivers to travel with an employee and their child on business trips.
Patagonia was also an early adopter of paid maternity and paternity leave.
Chouinard wrote in his book that the company also provides comprehensive health insurance, even to part-time employees, to attract athletic staff to work at the stores. In 1991, Chouinard started leading weeklong seminars where corporate employees would camp out together and learn about Patagonia's business and environmental values. The company told Insider it still takes staff on an annual ski trip.
Many of these staff benefits make business sense because they encourage productivity and attract higher-calibrate candidates, Chouinard wrote.
The policies are paying off. In 2020, Patagonia's then-CEO said that the company gets 9,000 applications for every open internship position and has "really high retention."
Patagonia gives 1% of its sales to environmental causes
Chouinard is an avid environmentalist, and he's brought these values to his company. Patagonia is a certified B Corporation, produced the first catalog printed on recycled paper in the US, and has been assessing its environmental impact for decades.
It was an early adopter of organic cotton and started making fleece jackets from recycled soda bottles in 1993. It also has a lifetime guarantee for its products and encourages customers to repair rather than replace them.
According to its website, all of the company's electricity usage in the US comes from renewable sources. The company also has a drive less program, which gives money to employees who commute by bike, carpool, or public transit and reserves the best spots in its parking lots for fuel-efficient cars, according to Chouinard's autobiography.
Staff can bring items from home into work for recycling, and in 1989, its Salt Lake City store turned part of its parking lot into Utah's first-ever recycling center, Chouinard wrote.
Patagonia also donates 1% of its sales to largely environmental causes, and Patagonia told Insider that it had given away $145 million in grants and in-kind donations since 1985 to mostly grassroots conservation activists and programs since 1985. In 2016, the retailer gave away all its Black Friday sales to grassroots environmental organizations.
"Our mission statement says nothing about making a profit," Chouinard wrote in his autobiography. "In fact, our family considers our bottom line to be the amount of good that the business has accomplished over the year."
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