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Industry: Patagonia elects benefit corporation status

 Patagonia's Dan Malloy © Patagonia


Industry Updates 

Patagonia Registers as First California Benefit Corporation

Surfersvillage Global Surf News
, 5 January, 2012 : - - Patagonia became the first company in California to elect benefit corporation status. Patagonia founder Yvon Chouinard on Tuesday led the largest group of businesses to register on the legislation's first effective date among the 7 states that have passed benefit corporation laws.  The dozen CEOs filed their documents at 9:30 a.m. as soon as the offices of the California Secretary of State opened.

Scores of other businesses have expressed interest in registering in the next few months, according to a statement from B Lab, a non-profit organization that supported the legislation.

"Patagonia is trying to build a company that could last 100 years," said Patagonia founder Yvon Chouinard.  "Benefit corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission-driven through succession, capital raises, and even changes in ownership, by institutionalizing the values, culture, processes, and high standards put in place by founding entrepreneurs."

“After the ‘year of the protester’, it’s inspiring that a group of business leaders are taking action to create a positive alternative,” said Jay Coen Gilbert, co founder of B Lab.

Benefit corporations are a new kind of corporation legally required to: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of workers, community and the environment; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.  Current law requires corporations to prioritize the financial interests of shareholders over the interests of workers, communities, and the environment.

"It is safe to declare a successful end to the ‘beta test’ phase of socially responsible business,” said Mike Hannigan, President and Co-Founder of Give Something Back Office Supplies. “we have been giving customers their money's worth and a whole lot more for more than 20 successful years. This important legal framework marks another giant step of mission driven business towards the mainstream."

"We rushed to be in Sacramento on January 3," said Sandra Stewart, principal of Thinkshift Communications. "It's what people are demanding. It’s not just a trend -- ingraining values into a legal corporate structure is key to a sustainable future."

New York, New Jersey, Virginia, and Hawaii passed similar legislation in 2011, joining Vermont and Maryland who did so in spring 2010. Benefit corporation legislation has also been introduced in Michigan, Pennsylvania, North Carolina, and the District of Columbia. Legislation has enjoyed strong bi-partisan support in every state.

"This is California at its best, showing there is a way to create jobs and grow the economy while raising the bar for social and environmental responsibility," said Assemblymember Jared Huffman (D-San Rafael). "With this new law, we are attracting new socially-conscious companies, investors and consumers – we’re sending a strong message that California is open for this emerging form of business."

The California bill had significant business support, including that of more than 200 individual California businesses, 12 business associations, including the Silicon Valley Leadership Group and the U.S. Green Building Council, standards organizations like GreenSeal, and more than 3,000 California citizens through the advocacy efforts of, all interested in creating better choices for the growing number of entrepreneurs and investors who seek to create businesses that create both social and shareholder value.

The bill was sponsored by the American Sustainable Business Council, New Voice of Business, and B Lab; the effort to pass the bill was led by a legal working group co-chaired by John Montgomery from Montgomery & Hansen LLP, Donald Simon from Wendel Rosen Black & Dean LLP, and Jonathan Storper from Hanson Bridgett LLP; and the citizen advocacy campaign was led by

For additional background on benefit corporations, including national and local legislative updates, see

First Day Registered Companies:

DopeHut, Dharma Merchant Services, Give Something Back Office Supplies, Green Retirement Plans, Opticos Designs, Patagonia, Rimon Law, Scientific Certification Systems, Solar Works, Sun Light & Power, Terrassure Sustainable Land & Resource Development, Thinkshift Communications

Initial Sponsors:

B Lab: is a nonprofit organization dedicated to using the power of business to solve social and environmental problems. B Lab drives systemic change through three interrelated initiatives: 1) building a community of Certified B Corporations to make it easier for all of us to tell the difference between “good companies” and just good marketing; 2) accelerating the growth of the impact investing asset class through use of B Lab’s GIIRS impact rating system by institutional investors; and 3) promoting supportive public policies, including creation of a new corporate form and tax, procurement, and investment incentives for sustainable business. 

American Sustainable Business Council: is a growing coalition of business networks and businesses committed to advancing a new vision, framework and policies to support a vibrant, equitable and sustainable economy. The Council brings the business perspective, experience and strength to stimulate our economy, benefit our communities, and preserve our environment. Today, the organizations that have joined in this partnership represent over 65,000 businesses and social enterprises and more than 150,000 entrepreneurs, owners, executives, investors and business professionals and other individuals. 

New Voice of Business: is a non-profit organization that promotes economic, social and environmental sustainability in the United States. Its mission is to inform, engage, and mobilize an influential network of business people – a unified, new voice of business to advocate for a sustainable economy and encourage triple bottom line business practices. New Voice advocates for policy change that makes it easier and more profitable for business to operate sustainably. 

Care2: With more than 17 million members and over 700 nonprofit partners worldwide, Care2 is the largest online community that empowers millions of individuals to lead a healthy, sustainable lifestyle and support important causes. Care2 is a B Corporation, or social enterprise, that generates revenues by connecting individuals with nonprofits and business that are making the world a better place. Care2 has worked with B Lab to provide thousands of signatures to advocate for Benefit Corporation legislation passed in California and New York. Founded in 1998, Care2 has collected over 80 million signatures on petitions featuring timely and important issues. 

Assembly member Jared Huffman (D-San Rafael): represents the 6th Assembly District, which encompasses southern Sonoma County and all of Marin County. First elected in 2006, Huffman chairs the Assembly Water, Parks and Wildlife Committee and also serves as Co-Chair of the Legislative Environmental Caucus.

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