Fifty years after launching the outerwear company synonymous with ethical business, Patagonia’s founder Yvon Chouinard has transferred ownership to two recently created entities: Patagonia Purpose Trust and the Holdfast Collective—both are charged with distributing dividends solely to protect the planet.
Patagonia says it’s “going purpose” instead of “going public.”
Following an announcement with its staff earlier today, the Patagonia.com website was updated, stating “Earth is now our only shareholder” with a letter from Chouinard.
“It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder. I am dead serious about saving this planet,” Chouinard said in a statement.
Putting capitalism to work for the planet
According to the company, The Patagonia Purpose Trust now owns all of Patagonia’s voting stock and exists solely to “ensure that there is never deviation from the intent of the founder and to facilitate what the company continues to do best: demonstrate as a for-profit business that capitalism can work for the planet.” The company is valued at about $3 billion.
Every dollar that the Trust and Collective get will either be reinvested in Patagonia itself or distributed as dividends “to protect the planet.”
Chouinard, who turns 84 later this year, has been outspoken in his support for environmental issues. In 2020, he wrote an open letter to the One Percent for the Planet network, calling on other brands to prioritize nonprofits working to preserve and restore the planet.
The company was an early supporter of environmental issues and the commitment has only increased in recent years. Chouinard and Patagonia have donated funds and resources to protecting wild lands. Last year, it released a film focused on the preservation efforts of the European Alps. It was also one of the first Certified B Corp, committed to excellence and transparency across the business. It was a groundbreaker in fashion, too, adopting organic cotton and using materials made from recycled plastic long before it hit the runways.
People and planet first
Chouinard and his family are no longer receiving profits from the company but his children are on the company payroll.
Company voting rights (2 percent) now belong to the Patagonia Purpose Trust. The Holdfast Collective owns the nonvoting stock, with all monies going to protect nature and biodiversity, and “support thriving communities and fight the environmental crisis.”
The company projects payouts of annual dividends of roughly $100 million.
“Two years ago, the Chouinard family challenged a few of us to develop a new structure with two central goals,” Ryan Gellert, CEO of Patagonia and Patagonia board member said. “They wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis. We believe this new structure delivers on both and we hope it will inspire a new way of doing business that puts people and planet first.”
Leadership at the company is not changing, with Gellert as CEO and on the board along with the Chouinard family, Kris Tompkins, Dan Emmett, Dr. Ayana Elizabeth Johnson, Charles Conn (chair of the board).
Board members praised the announcement.
“I first met Yvon when he was around 24 and today, he is almost 84. In all those years, his vision has never wavered,” Board member Tompkins said. “He wanted to do things his own way and on his own terms. And while he is in good health now, he wanted to have a plan in place for the future of the company and the future of the planet. I believe this plan that he and his family helped create is tectonic. It will make the company more competitive and its employees around the world will forever be empowered by purpose.”
“Every time you read a new scientific report, it’s clear the climate crisis is happening faster than we thought and it’s worse than we thought,” said Johnson. “The stakes could not be higher. If we want to protect nature and support communities, businesses can’t continue to adhere to the prevailing economic model. Patagonia has been breaking the mold for decades, and now they have shattered it. Now I want to know, which companies will be next to step up?”
Emmet says over the years he’s seen both “the positive and negative” impact a business can have on its communities and employees. “But while we and others do take meaningful steps to mitigate the impact we have on the planet, Patagonia’s new ownership structure introduces a new model that goes far beyond anything that exists today. And it’s true to form for my life-long friend and fellow environmentalist, Yvon Chouinard.”
“The current system of capitalism has made its gains at an enormous cost, including increasing inequality and widescale uncompensated environmental damage. The world is literally on fire,” board chair Conn said. “Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty. They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.”
The Chouinard family will serve as the controlling shareholder of the Trust and elect and oversee the board of directors. The family will also guide the Collective’s philanthropic work, working together in “the company’s continued success over the long term while ensuring it stays true to its purpose and values.”
