Courtesy of Jeff Johnson and Patagonia Patagonia founder Yvon Chouinard, his wife and two grown children are giving away their ownership of the clothing manufacturer that started nearly 50 years ago, dedicating all profits from the company to projects and organizations that will protect wild land and biodiversity and will fight the climate crisis. The company is worth about $3 billion, according to the New York Times. In a letter about the decision, published on Patagonia’s website on Wednesday, Choiunard wrote of “redesigning capitalism” and said: “While we are doing our best to address the environmental crisis, it is not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact. One option was to sell Patagonia and donate everything the money But we couldn’t be sure that a new owner would maintain our values or keep our team of people around the world busy. Another path was to take the company public. What a disaster that would be. Even well-intentioned public companies are under too much pressure to generate short-term profit at the expense of long-term vitality and accountability. Truth be told, there were no good options available. So we created ours.” The privately held company’s stock will now be owned by a climate-focused trust and group of nonprofits, called the Patagonia Purpose Trust and the Holdfast Collective respectively, the company said in a statement, noting “every dollar not reinvested back into Patagonia will be distributed as dividends for the protection of the planet”. The trust will take all of the voting stock, which is 2% of the total, and use it to create a “more permanent legal structure that enshrines Patagonia’s purpose and values.” He will be supervised by family members and close advisors. Holdfast Collective owns all of Patagonia’s non-voting shares, amounting to 98%. Patagonia expects to generate 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, as well as sustainably sourced food and beverages. As a certified B-Corp and California Benefit Corporation, Patagonia already donates one percent of its sales each year to grassroots activists and plans to continue to do so. Fewer than 6,000 companies worldwide are certified as B-Corps. They must meet strict environmental, social and governance standards and benchmarks set by B Labs to become certified. Ryan Gellert will continue to serve as Patagonia’s CEO, and the Chouinard family will remain on Patagonia’s board, pursuing the apparel maker’s expanded philanthropic strategy. After notifying employees Wednesday of the move, the company updated its website to say “Earth is now our sole shareholder.”
