Patagonia Sustainability
3. Can a corporation be environmentally sensitive and still be responsible to shareholders? Is this easier for a privately held company?
Absolutely yes! Patagonia has made an example of this. The company achieved annual revenue growth between 3% and 8% while being promoted as environmentally friendly companies. On the one hand, Patagonia has a social conscious - encouraging employees to be responsible citizens, promoting to produce with organically grown cotton and used plastic bottles, shipping via the lowest mode of transportation, exploiting renewable energy through recycled materials and initiating or sponsoring a number of environmental projects. On the other hand, Patagonia has set its fame by providing high-quality outdoor clothing and equipment, developed a group of loyal customers and realized operating margins above the industry average. Moreover, being green is not always a mere money burning business, it do bring about benefits. For instance, Patagonia’s wetsuit for surfers is warmer and no unappealing smell when compared with its competitors’.
To our point of view, we would agree that a privately held company is much easier to support environment practices. Yvon Chouinard, the founder and CEO of Patagonia, has the final say of the company’s strategies. Patagonia won’t have gone so far in environmental protection without his sponsor. On the contrary, the main aim of a public company is to satisfying various shareholders who have claim to part of the company's assets and profits as well as the right to vote companies strategies. In most cases, a financial group or an investment company is a key shareholder whose focus is on the profitability. Thus, a privately held company has more freedom to invest in environment sustainability.
5 force
External factors that are influencing Patagonia’s decision making 1. values of target
Absolutely yes! Patagonia has made an example of this. The company achieved annual revenue growth between 3% and 8% while being promoted as environmentally friendly companies. On the one hand, Patagonia has a social conscious - encouraging employees to be responsible citizens, promoting to produce with organically grown cotton and used plastic bottles, shipping via the lowest mode of transportation, exploiting renewable energy through recycled materials and initiating or sponsoring a number of environmental projects. On the other hand, Patagonia has set its fame by providing high-quality outdoor clothing and equipment, developed a group of loyal customers and realized operating margins above the industry average. Moreover, being green is not always a mere money burning business, it do bring about benefits. For instance, Patagonia’s wetsuit for surfers is warmer and no unappealing smell when compared with its competitors’.
To our point of view, we would agree that a privately held company is much easier to support environment practices. Yvon Chouinard, the founder and CEO of Patagonia, has the final say of the company’s strategies. Patagonia won’t have gone so far in environmental protection without his sponsor. On the contrary, the main aim of a public company is to satisfying various shareholders who have claim to part of the company's assets and profits as well as the right to vote companies strategies. In most cases, a financial group or an investment company is a key shareholder whose focus is on the profitability. Thus, a privately held company has more freedom to invest in environment sustainability.
5 force
External factors that are influencing Patagonia’s decision making 1. values of target