In Research


Year: 2024
Cited as: Alejandro Agafonow, Marybel Perez,
In search of a non-anthropocentric middle-range theory of the firm: On how the Patagonia Purpose Trust granted a controlling stake to nature, Ecological Economics, Volume 217, 2024, 108076, ISSN 0921-8009,


Patagonia; Theory of the firm; Payment for ecosystem services; Mechanism-based methodology


Patagonia, an outdoor clothing company thrust into the limelight by a New York Times full-page ad that in 2001 invited customers not to buy its own gear, has recently responded to the inherently low capacity of firms to supply ecosystem services. Since the firm is a generic term encompassing many different bundles of property rights, the specific mechanism of the Patagonia Purpose Trust is researched to find whether it has plausibly locked the company in on preserving ecosystems through its environmentally driven community investment, product re-design, and supply chain overhaul. A mechanism-based methodology is employed, organizing the units of observation in keeping with a formal ontology and benchmarking Patagonia’s mechanism against the generic templates of a corporation and a charitable Trust to highlight what is distinct about Patagonia. The findings are that, in a nutshell, Patagonia’s mechanism consists of: 1) increasing the opportunity cost of not redressing a breach of purpose by designating an ascertained beneficiary with an unequivocal interest in Nature’s preservation; 2) offsetting fiduciaries’ influence on asset management with a countervailing mechanism; and 3) designing a procedure centered on the renewal of credible co-trustees to keep checking on fiduciaries in the long run.


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