At Cotopaxi, we’re committed to doing good. What may be less apparent is that doing good is literally ingrained into Cotopaxi’s DNA. How? Two words: Benefit Corporation. Below, Davis Smith, our CEO, explains what makes Benefit Corporations unique.
What exactly is a Benefit Corporation anyway?
“A Benefit Corporation is a new type of corporation that allows for-profit entities to pursue social and environmental goals along with their focus on maximizing profit. There is no tax advantage to incorporating as a benefit corporation—they are taxed just like their for-profit corporate counterparts. Directors are simply not limited to focusing solely on maximizing their bottom lines, and therefore have the freedom to also make social and environmental impact a priority.”
So why did you decide to register Cotopaxi as a Benefit Corporation?
“I’ve spent the last ten years as a serial entrepreneur and have found that I love building businesses, but I have long felt that something was missing. When it came time to return to the US, I knew my next business would not only focus on profits, but have a positive social impact as well. I began meeting with investors in Silicon Valley and New York on my first day back in the US. Without exception, investors loved my vision of building an outdoor gear brand with a humanitarian mission.”
But how can a corporation be committed to both making a profit and benefitting the public?
“Capitalism has largely transformed our world during the last 200 years. We have seen a reduction in poverty of unparalleled magnitude in the course of human history. In fact, over the past 20 years, we have reduced extreme poverty by half: 43 percent of the world lived in extreme poverty in 1990 compared to 21 percent in 2010.”
Well, what about the effects of capitalism that aren’t so positive?
“While the miracle of capitalism has been undeniable, it would be wrong to assume that it doesn’t need to evolve. In fact, capitalism has evolved rapidly in the digital age, and it is up to us to determine the direction of that continued evolution. I’m a believer that capitalism will continue to be a solution to the world’s problems in the twenty-first century.”
Agreed. How can we do it?
“As business leaders, we need to do more for people and the planet. As consumers, we need to demand more of corporations and do more to support those that do good. After all, we already know that profits are simply the outcome of a business that creates legitimate value for both consumers and society.”