Patagonia founder Yvon Chouinard announced this week that ownership of the company has been transferred to a trust and a nonprofit, with all profits to go towards fighting the climate crisis and protecting the environment.
In a post on the Patagonia site entitled ‘Earth is now our only shareholder’, Chouinard explains that 100% of the company’s voting stock has transferred to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.
Patagonia will continue to be a for-profit business, a certified B Corp and a California benefit corporation, and it will also continue to donate 1% of sales each year to grassroots environmental nonprofits.
Now, however, Chouinard explains: “Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”
In the post, he says that the company has for many years strived to cause as little environmental damage as possible. This has included giving away 1% of sales each year, becoming a certified B Corp and a California benefit corporation, and in 2018 changing the company’s purpose to: ‘We’re in business to save our home planet.’
However, Chouinard says, this is not enough: “We need to find a way to put more money into fighting the crisis while keeping the company’s values intact.”
One option considered was selling Patagonia and donating all the money, while another was to take the company public. But, he says: “Truth be told, there were no good options available. So, we created our own.”
Chouinard describes the move as ‘going purpose’, adding “instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.”
The Holdfast Collective will use every dollar it receives to fight the environmental crisis, protect nature and biodiversity, and support communities, “as quickly as possible”. As a 501(c)(4) not-for-profit organisation, it can also advocate for causes and political candidates.
The Patagonia Purpose Trust has been created solely to protect the company’s values and mission. Owning all of the voting stock of the company means it has the right to approve key company decisions.
Ryan Gellert as CEO along with the leadership team and all of Patagonia’s employees will continue to run the business under the direction of the board of directors. The Chouinard family will guide the Patagonia Purpose Trust, electing and overseeing its leadership. Family members will continue to sit on Patagonia’s board alongside its other members, and will also guide the philanthropic work performed by the Holdfast Collective.