Patagonia wants to play fairy godmother. The outdoor-apparel giant has announced plans to invest more than $20 million in like-minded, socially responsible startups through a new in-house venture fund. Known as “$20 Million & Change”—the name is a nod to both the initial capital and its potential to “change” the way people do business—the fund will fall under the auspices of a new holding company that will serve as an umbrella for Patagonia’s apparel arm and the company’s various subsidiaries. Patagonia Works, which succeeds the Lost Arrow Corporation, will not only cover present Patagonia holdings, but it will also incubate new companies or investments that use business to “inspire and implement solutions to the environmental crisis,” according to Yvon Chouinard, the rock-climber-turned-entrepreneur who founded Patagonia 40 years ago.
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All Patagonia Works companies, which currently include a surfboard manufacturer and a producer of wild-caught salmon jerky, are “benefit corporations,” meaning they’re third-party-certified to meet certain standards of social and environmental performance, accountability, and transparency. They also utilize footprint-measurement tools such as the Higg Index and donate 1 percent of sales to environmental preservation and restoration. Although startups funded by $20 Million & Change won’t have to be benefit corporations or donate 1 percent of their sales, they must support Patagonia’s core values and work to provide solutions to environmental problems.
All Patagonia Works companies, which currently include a surfboard manufacturer and a producer of wild-caught salmon jerky, are “benefit corporations.
“Others might see Patagonia Works and $20 Million & Change as revolutionary business ventures; we think both are just next logical steps to doing business more responsibly,” Chouinard says. “Economic growth for the past two centuries has been tied to an ever-spiraling carbon bonfire. Business—and human—success in the next 100 years will have to come from working with nature rather than using it up. That is a necessity, not a luxury as it’s seen now in most business quarters. We invite and encourage all companies to start to work with us in that direction.”