Yvon Chouinard, the billionaire founder of the outdoor clothing brand Patagonia has announced his intention to give away ownership of his company to a trust and non-profit organisation.
The new ownership structure will ensure that any money which is made after reinvesting into the business will be donated to environmental causes, with a particular focus on combatting climate change. It is estimated that this figure will be around $100 million a year.
Chouinard, a passionate environmentalist, founded the company in 1973 in an attempt to produce climbing equipment which would cause minimal damage to the rockface. With hundreds of stores all over the world, Patagonia has already been donating 1% of sales revenue to environmental causes since 1985. Over the years this has amassed to over $89 million.
“Earth is now our only shareholder” – Yvon Chouinard, 2022
THINK LIKE AN ECONOMIST!
Q1. What do you think are Patagonia’s main business objectives?
Q2. What signs are there from the article that Patagonia was already a socially minded business.
Q3. What type of company will Patagonia become?
Q4. Explain the impact that this news is likely to have on sales revenue.
Q5. Discuss whether you think the giving away of Patagonia to a non-profit is a rational or an irrational business decision.
Q6. Find three more examples of profit-seeking companies which appear to be genuinely socially minded like Patagonia are. For each one explain why you believe them.
Q6. Now find three examples of companies who talk the talk about being socially minded but don’t walk the walk! For each one, explain what they say, and then explain why you think in reality it may all be lies.
Bonus Question: How much do you love DICE?
Click here for the source article
