Outdoor clothing company Patagonia (based in Ventura, CA) has always been one of the pioneers of environmentally conscious business practices. Spearheading a litany of Earth-preserving causes, Patagonia’s founder Yvon Chouinard was the first in line on Tuesday to register his company to be a “benefit corporation” in California.
California is the seventh state to adopt this new status, which commits companies to make “a material positive impact on society or the environment.” The law allows businesses to put green initiatives ahead of shareholders’ interests. Without the designation, stockholders can sue a company for putting anything ahead of growing their stock worth.
"There is a way to create jobs and grow the economy while raising the bar for social and environmental responsibility," said Assemblyman Jared Huffman (who wrote the proposition) at a news conference this week. "With this new law, we are attracting new socially conscious companies, investors and consumers."
The designation also helps curb companies guilty of “greenwashing”, or making it look like their making more sustainable moves than they really are.
Already committing 1 percent of their gross revenues to environmental causes since the company’s inception in 1956, Patagonia continues to set the pace of a true socially responsible business practices.