Patagonia, the maker of outdoor clothing and gear, has long stood for its environmental philanthropy championed by founder Yvon Chouinard. The company has redirected a portion of profits to green causes since 1986 and discloses the chemicals it uses in its products. And beginning this year, according to Bloomberg, it has officially been designated as a Benefit Corporation:
The company, based in Ventura, announced it will become one of the state’s first “Benefit Corporations,” a new legal structure that gives directors legal cover to consider social and environmental missions over financial returns. The law creating the Benefit Corporation is one of two state measures that went into effect January 1. They’re each designed to embed goals beyond profitability into companies’ missions.
Benefit Corporations such as Patagonia must commit to creating an overarching “general public benefit.” Companies that incorporate as Benefit Corps must consider an array of stakeholders beyond shareholders, including workers, suppliers, the environment and the local community. They must measure their progress toward that goal against a third-party standard.
Patagonia is the highest-profile business to adopt this new business structure. Currently recognized in seven states, here’s to hoping that this type of structure expands further.