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Patagonia boss donates company to fight climate change

Boss Yvon Chouinard has “donated” Patagonia to charity. Any profits not reinvested in the management of the company will go to the fight against climate change.

Yvon Chouinard, boss of Patagonia

Press release:

THE NEXT CHAPTER OF PATAGONIA: THE EARTH IS NOW OUR SOLE SHAREHOLDER

Entering its next 50 years, the company is ‘moving forward’ instead of ‘going public’

VENTURA, Calif. (September 14, 2022) – Patagonia today announced a new owner, nearly 50 years after founder Yvon Chouinard began his responsible corporate journey. Effective today, the Chouinard family has transferred all ownership rights to two new entities: Patagonia Purpose Trust and Holdfast Collective. More importantly, every dollar not reinvested in Patagonia will be distributed as dividends to protect the planet.

The Patagonia Purpose Trust now owns all of the company’s voting shares (two percent of total shares) and exists to create a more permanent legal structure to enshrine Patagonia’s purpose and values. This will help ensure that there is never a deviation from the founder’s intent and facilitate what the company continues to do best: demonstrate as a for-profit company that capitalism can work for the planet.

The Holdfast Collective owns all non-voting shares (98% of total stock) and will use every dollar received from Patagonia to protect nature and biodiversity, support thriving communities, and fight the environmental crisis. Each year, profits that are not reinvested in the company will be distributed by Patagonia as a dividend to the Holdfast collective to help fight the climate crisis. The company expects to pay an annual dividend of around $100 million, depending on the health of the business.

Yvon Chouinard, Patagonia Founder, Former Owner and Current Board Member, said, “It’s been half a century since we began our journey as a responsible company. If we have any hope of a prosperous planet in 50 years, it requires that we all do everything we can with the resources we have. As the business owner I never wanted to be, I’m doing my part. Instead of extracting value from nature and turning it into wealth, we use the wealth created by Patagonia to protect the source. We make the Earth our sole shareholder. I am very serious about saving this planet.

Patagonia will remain a B Corp and will continue to donate 1% of its sales each year to grassroots activists. The direction of the company does not change. Ryan Gellert will continue as CEO and the Chouinard family will continue to serve on the Patagonia Board of Directors, alongside Kris Tompkins, Dan Emmett, Dr. Ayana Elizabeth Johnson, Charles Conn (Chairman of the Board), and Ryan Gellert . The Chouinard family will also guide the company’s majority shareholder, the Patagonia Purpose Trust, in electing and overseeing Patagonia’s board of directors. They will also guide the philanthropic work carried out by the Collectif Holdfast. Acting together, the Patagonia Board of Directors and the Patagonia Purpose Trust will work for the continued success of the company over the long term while ensuring that it remains true to its purpose and values.

Yvon Chouinard, “The Chief”, models a full rack of handmade equipment at Tahquitz Rock

Ryan Gellert, Patagonia CEO and Patagonia Board Member, said:

“Two years ago, the Chouinard family challenged some of us to develop a new structure with two central objectives. They wanted us to both protect the corporate purpose and immediately and perpetually release more funds to fight the environmental crisis. We believe this new structure delivers on both and we hope it inspires a new way of doing business that puts people and planet first.

The company first shared the news with its employees at a global town hall meeting on September 14, 2022. Shortly after, the Patagonia.com website was updated to indicate that Earth is now our sole shareholder. and to include a letter from founder Yvon Chouinard.

Diagram of the business model

Additional Quotes from the Patagonia Board of Directors

“I first met Yvon when he was around 24 and today he is almost 84. In all these years, his vision has never wavered. He wanted to do things his own way and on his own terms. And although he is now in good health, he wanted to have a plan in place for the future of the company and the future of the planet. I believe this blueprint that he and his family helped create is tectonic. It will make the company more competitive and its employees around the world will be forever motivated by their goal. —Kristine McDivitt Tompkins

“Every time you read a new scientific report, it’s clear that the climate crisis is happening faster than we thought and is worse than we thought. The stakes couldn’t be higher. If we want to protect nature and support communities, companies can’t continue to adhere to the mainstream business model. Patagonia broke the mold for decades, and now they’ve broken it. Now I want to know which companies will be next in line. intervene?” — ​​Dr. Ayana Elizabeth Johnson

“The current system of capitalism has made its gains at enormous cost, including increased inequality and uncompensated environmental damage on a massive scale. The world is literally on fire. Companies that create the next model of capitalism through a deep commitment to purpose will attract more investment, better employees, and greater 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. — Charles Conn, Chairman of the Board

“As the founder of a company that has been in business for almost 50 years, I have seen the positive and negative impact that a company can have on its communities and its employees. But as we and others take meaningful steps to lessen the impact we have on the planet, Patagonia’s new ownership structure introduces a new model that goes far beyond anything in existence today. And it’s true for training my lifelong friend and ecologist colleague, Yvon Chouinard. —Dan Emmett

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