How Patagonia Shook the Game Board on Purpose

By giving away all its profits to help fight the climate emergency, outdoor brand Patagonia, has changed the rules of the game on purpose-lead employment. Here’s why it matters…

Right now, the question of why we go to work is at the forefront of your talent audience’s thinking like never before.

For many in these difficult economic circumstances, of course, the question has been reduced to a simple need to work to pay bills and survive. For those lucky enough to be able to dwell on other considerations, working for a purpose has become the holy grail.

Recent research from Given says 1 in 3 large firm employees would choose purpose over a higher salary when considering a company to work for, while 48% of large firm employees want more action when it comes to their company’s purpose.

What Patagonia did next

Greatly regarded as perhaps the world’s most ethical employer, outdoor wear specialist Patagonia, tore up the rule book when it announced that it was handing over all its annual profits (usually in the region of $100m) to help fight the climate emergency.

All the company’s voting stock will transfer to the Patagonia Purpose Trust, which has been created to protect the company’s values, and through the Holdfast Collective, 100% of the non-voting stock goes to not-for-profits dedicated to fighting the environmental crisis and defending nature.

The funding will come directly from Patagonia itself. Every year, the money made after reinvesting in the business will be distributed as a dividend to the cause.

Yvon Chouinard, Patagonia founder, former owner, and current board member, said: “We’re making Earth our only shareholder. I am dead serious about saving this planet.”

Environmental awareness, social sustainability and putting principles before profit is in Patagonia’s brand DNA. It has championed improved sustainability in its supply chain; encourages its own customers to recycle and offered free repairs to their existing Patagonia items with its Worn Wear project and three years ago donated $10m in tax savings to environmental causes.

It holds environmental training days for employees; Zero Waste Weeks for stores and other facilities and promotes sustainability as a lifestyle for employees through its Ride Share programme, Bike to Work Week and even a composting programme.

And guess what? Its staff turnover is three times lower than the average. Employees stick with Patagonia. When it comes to retention, creating purpose, impact and belonging works.

One commentator called its latest decision to give away its profit as “A turning point in predatory capitalism”. The reaction has been resounding.

Citizenship at work

For its consumer brand, in a sector already full of committed environmentalists and outdoor lovers, Patagonia has galvanised its customer base and put clear water between itself and its competitors when it comes to authenticity. If you’re concerned about the impact of your purchasing decisions on the planet, Patagonia just made itself the only logical choice.

As an employer brand it is the exemplar of how to combine purpose, impact and belonging and offer those things to somebody in their career. It is the ultimate example of citizenship. It galvanises people internally, providing an opportunity to contribute and make an impact on the world and aligns everybody around a macro purpose and a personal purpose.

For anybody that wants to help the planet, why wouldn't you flock to Patagonia now?

For other organisations, the gauntlet has been thrown down and the bar has been raised super high. So, they can either step up to the plate and do something similar or come up with a compelling way to prove some other aspects of citizenship within their set-up.

It asks the question: what's your version of citizenship? Because if they're not thinking about it now, they should be.

When competing against Patagonia for talent, you now need to find your version. Or if you decide that's a game that you cannot win, you need to work out alternatives. What are the distinguishing features that will make somebody choose you over Patagonia, even in the face of something so compelling?

You may need to realign your employer brand away from citizenship towards culture or as a career catalyst employer.

By making such a radical move, Patagonia has asked questions about the nature of purpose, impact and belonging in all employers. Even if they haven’t realised it yet.