Earth Is Now Our Only Shareholder: A Study of Patagonia’s Legitimacy in a World With Increasing Demands to Legitimacy

Abstract

Patagonia is known as a high-end outdoor clothing brand. Since Patagonia’s beginning in 1973, Patagonia has actively engaged in sustainability and the natural environment. This means that communication about sustainability has been a part of Patagonia’s mission years before it became a trend. With aspirations to protect the environment, Patagonia has a history of charity practice and other environmental activism. This year, 2023, Patagonia has its 50th anniversary. For this occasion, Patagonia decided to make an unusual decision based upon reflections on how the company aspires to be from now on. Patagonia has decided to update its core values even though they are one of the front runners within sustainability. Patagonia revealed in September 2022 in a video post on its Instagram page that; “The earth is now our only shareholder”. A decision, that fundamentally means a change in legal ownership has been made. The values of the company are still controlled by Patagonia, but all of Patagonia’s profits will be deliciated to charity organisations. This action can be viewed as a way of creating legitimacy.
This thesis investigates how Patagonia creates legitimacy as companies are facing increasing demands for legitimacy, especially in an industry that are dealing with clothing and fashion. A part of the demands entails the increasingly interest in sustainability and the connectivity as a result from the social media’s communication possibilities. As legitimacy to a large extent relies on the communication between the organisation and the outside world, this brings both opportunities and challenges for the legitimacy process. In addition, the demands are also influenced by a switch in the primary consumer which is now the generation z. A target group that is known for its critical and selective decision-making influenced by social media communication.
In this study, it is concluded that despite the abovementioned challenges, Patagonia creates legitimacy in a world with increasing demands, through its manipulation strategy based upon the cognitive-, moral-, and corporate environmental legitimacy. This is the case as the consumers expect to see unusual and innovative initiatives regarding companies’ engagement in sustainability as they have less expectations to an alternative. With this type of strategy, Patagonia succeeds in accommodating the outside world’s increasing demands and interests in sustainability but is to a significant extend determined by Patagonia’s use of storytelling as well. It is not only about the choice of legitimacy strategy, but it is at the same time also influenced by the storytelling.