Patagonia embodies a business model that the WFTO community is promoting

The recent decision of the CEO of the famous outdoor clothing brand Patagonia Yvon Chouinard to give away the capital of the company to a fund to help the fight against climate crisis mirrors the business models of Fair Trade Enterprises across the planet!

“This is what a mission-led business is all about. The whole difference with this business model is how the profits are used, if you compare it with conventional business models,” says Leida Rijnhout, Chief Executive of the World Fair Trade Organization (WFTO).

Inequality widens when profit goes to the few shareholders, just because they invested capital that grow based on the work of workers. This cycle of speculative profit-making by shareholders permits them to control the global wealth. This is why the world today has the richest 1% owning half of the global wealth.

Accumulation of capital goes hand in hand with accumulation of power. For mission-led enterprises or purpose driven businesses, their business models are built for societal impact. They strive to be commercially sustainable, to produce goods and services for the market, and they use their profits to pursue either social or environmental mission.

“Promoting these types of models is good for changing the current extractive economy,” adds Rijnhout.

According to Rijnhout, these mission-driven business models are not only giving a lot of decent jobs, but they also have a redistributive characteristic built in their DNAs. Their strong connection with communities allows them to invest their profits in communities through creating more opportunities and environmental protection. 

“A business doesn’t have to be owned by private capital to be commercially successful. There are existing businesses that no one owns. The business is owned by itself. It is making profits and the gains go to the workers, employees, producers and their communities,” says Rijnhout.

“Our goal, as WFTO community, is to populate economies with mission-driven businesses such as Patagonia,” concludes Rijnhout.