Fellow Travelers

We pointed to this interview he gave some time back, in which he talks about how his company came to be, and what it has meant to him personally. We have enjoyed news stories in the last couple years covering some of his company’s innovative approaches to making their business model viral–not only so consumers are more hooked, but so that other entrepreneurs get hooked on their business model.  In our own small way we are fellow travelers, at La Paz Group, with Patagonia’s much older, established business; we hew to the same path even as our particulars could not be more different.

This letter by Patagonia’s founder provides his simple explanation of what this new initiative of the company is all about. The website’s FAQ section explains it all in a nutshell:

…What are the responsibilities of Patagonia Works as the holding company?

The Responsibilities of Patagonia Works:

  •   Nurture entrepreneurial ventures
  •   Incubate environmentally responsible companies
  •   Diversify corporate holdings
  •   Extend the reach and the influence of the brand to new markets
  •   Influence the global business paradigm
  •   Offer a new way to measure return on invested capital
  •   Provide long-term economic health with consideration of environmental and social risk
  •   Promote The Responsible Economy, Patagonia’s ongoing environmental campaign
  •   Provide best-quality shared services and allow each business to focus on product, quality, sales and customer experience

What are the current companies under the Patagonia Works umbrella?

Patagonia Inc. (apparel)
Patagonia Provisions® (food)
Patagonia Government Sales
Patagonia Media (books, films, multimedia projects) Fletcher Chouinard Designs® (surfboards)

What are the shared attributes of each company under Patagonia Works?

Each company within Patagonia Works will share the core values of Patagonia Inc.: quality, environmentalism, corporate transparency and not being bound by convention. Additionally, all companies will have direct sales as a component. Each will be organized as a B Corp (benefit corporation), be a member of 1% for the Planet® and utilize the Higg Index or other appropriate footprint-based measurement of social and environmental performance. Each company may leverage the following shared corporate services: environmental, legal, finance, technology, distribution, and human resources.

Start-up or “angel” investments may be made in companies outside Patagonia Works that are not B Corps, members of 1% for the Planet or subscribers to a social and environmental performance index. But these companies must share our core values and their work must help provide solutions to the environmental crisis.

Could Patagonia Works be considered an incubator for environmentally and socially responsible companies?

Absolutely. Some Patagonia Works investments could be smaller seed investments to fledgling, responsible companies in need of capital. Investments of any size will be limited to like-minded, responsible businesses.

Will Patagonia Works wholly own any of the companies it invests in?

Not necessarily. Patagonia Works could be an investor, or joint-venture partner.

Does Patagonia Works have any pending acquisitions?

No. The primary area of concentration in the near future will be the development of the $20 Million & Change fund and the launching of Patagonia Provisions (food) with new products and new markets.

Will Patagonia Works continue to donate one percent of sales to grassroots environmental groups?

Absolutely. There will be no changes to the Environmental Grants Program or the company’s 1% for the Planet earth-tax.

What is a B Corp (benefit corporation)? Why will each company under Patagonia Works be organized as a B Corp?

B Corps (benefit corporations) are a new kind of corporation legally required to: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of workers, community and the environment; and 3) publicly report annually on overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard. In contrast, current law requires corporations to prioritize the financial interests of shareholders over the interests of workers, communities and the environment.

In January 2012, Patagonia Inc. was one of the first companies in California to register as a B Corp. Each company under the Patagonia Works will have a common, ethos-led mission and will register as a B Corp to ensure that its values live in perpetuity.

Read the whole FAQ here.

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