Patagonia, the clothing company from Ventura California I think is the benchmark for socially and environmentally responsible business.
It’s founder Yvon Chouinard, was once heard saying that every-time he is faced with the choice of doing something for profit or something for good, he always chooses the good and in the long run it turns out to be more profitable.
Patagonia once came out with a new sweat wicking T-shirt which was a great seller until people started to report back that they couldn’t wash the smell of sweat out of the shirts. Patagonia pulled the shirts off the shelves and researched alternatives. They came up with a solution but when the CEO heard the new material was not eco friendly, he asked them to go back to the drawing board. Eventually they came up with a more expensive fabric made up of crab shells collected from beaches. This is the solution that made it to the shelves.
Patagonia like any company has had its struggles but continues to thrive financially. It’s stuff is not cheap but it’s built to be loved and last. In the early days on a big wave day the phones would not be answered because the employees would all be surfing. Today still, employees love working there. It gives away all its profits from Black Friday. And it is a staunch activist for environmental preservation.
Patagonia embodies and operates from an intention of improving the world around it.
Unfortunately for investors they are not publicly traded, but should be a model for those that are.
The big question around social and responsible investing is whether they will make money. Well money talks and social and environmental investing is transitioning from a trillion dollar industry toward a necessity for being in business. Picking companies that make good products, reinvest in their employees and innovation, treat vendors and employees like partners and appreciate the environment not only as a valuable resource but a source of awe and beauty and who keep their financials sustainably will always be a good long term investment.
Read between the lines to discern a company’s true intention.