Yvon Chouinard, founder and owner of Patagonia.
Courtesy of Jeff Johnson and Patagonia
Patagonia founder Yvon Chouinard, his wife and two grown children are handing over ownership of the apparel maker he started nearly 50 years ago, dedicating all profits from the company to projects and organizations that will protect wild lands and biodiversity and fight the climate crisis.
According to information, the company’s wealth is about 3 billion dollars New York Times.
In a letter about the decision published Wednesday on Patagonia’s website, Choiunard wrote about “reimagining capitalism,” saying:
“Although we did our best to solve the environmental crisis, it was not enough. We had to find a way to invest more money in fighting the crisis while preserving the company’s values. One option was to sell Patagonia and donate all the money. But we could not be sure that the new owner would will maintain our values or employ our team of people around the world.
Another way was to take the company public. What a disaster that would be. Even well-intentioned public companies are under extreme pressure to make short-term profits at the expense of long-term viability and responsibility.
To be honest, there were no good options. So we created ourselves.”
Shares in the private company will now be owned by a group of climate-based trusts and nonprofits, the Patagonia Purpose Trust and the Holdfast Collective, respectively, and “Every dollar not reinvested in Patagonia will be distributed as a dividend to protect the planet.”
The trust will receive the entire voting pool, which represents 2% of the total vote, and will use it to create “a more permanent legal structure to enshrine Patagonia’s goals and values.” This will be overseen by family members and close advisors.
Holdfast Collective owns all of Patagonia’s non-voting shares, which is 98%.
Patagonia expects to earn and donate about $100 million annually, depending on the health of the business. The company now sells new and used outdoor clothing, equipment for outdoor activities such as camping, fishing and climbing, and sustainably sourced food and beverages.
As a certified B-Corp and California Benefit Corporation, Patagonia already donates a percentage of its sales annually to local activists and intends to continue doing so. Less than 6,000 companies worldwide are certified B-Corp businesses. To be certified, they must meet strict environmental, social and governance standards and criteria set by B Labs.
Ryan Gellert will continue as Patagonia’s CEO, and the Chouinard family will remain on Patagonia’s board, in line with the apparel maker’s expanded philanthropic strategy. After notifying employees of the move on Wednesday, the company updated its website to say, “Earth is now our sole shareholder.”
