The company will still be an active producer of clothing, camping supplies and other goods — but all profits will go to organizations fighting the climate crisis and pursuing other environmental goals. The move is a bold new step for a company that has taken an activist leadership role for years, especially on environmental causes. “Instead of extracting value from nature and turning it into wealth for investors,” Mr. Chouinard wrote in a public letter, “we will use the wealth Patagonia creates to protect the source of all wealth.” The company’s voting stock will go to the Patagonia Purpose Trust, which will “protect the company’s values.” The non-voting stock will go to the Holdfast Collective, a non-profit organization that will use the company’s profits each year for environmental action. When deciding what to do with the company, Mr. Chouinard wrote that neither selling the company and donating the profits nor going public seemed like a good way to ensure the company would continue its activist role. “To tell you the truth, there were no good options available,” he said. “Well, we created our own.” Mr. Chouinard, now 83, is a former mountaineer and founded Patagonia nearly 50 years ago. Since then, the Ventura, California-based company has grown into a multi-billion dollar company that sells supplies marketed to outdoor enthusiasts. Yvon Chouinard is seen in a video from Patagonia announcing his decision to turn the company over to an environmental trust and non-profit (Patagonia) “I never wanted to be a businessman,” he wrote. “I started as a craftsman, making climbing gear for my friends and myself, and then I got into clothing.” In recent years, especially during the Trump administration, the company’s activist role has become much more important. In 2018, the company said it would donate all the money it earned from the tax cuts signed by then-President Trump to environmental causes. And in 2017, Patagonia joined a lawsuit trying to block the federal government from shrinking Bears Ears and Grand Staircase-Escalante National Monuments in Utah. Holdfast Collective, the new nonprofit that will use the company’s profits, is a 501(c)( 4 ), a type of nonprofit that can make political donations. As a result, the Chouinard family received no tax deduction for their donation to the team, the New York Times reports. The family also paid millions in taxes on their donation to the trust that will control the voting shares, the newspaper added. In 2002, Chouinard and Patagonia co-founded “1% for the Planet,” a collective of companies that donate 1 percent of their sales to environmental causes. “The current system of capitalism has made its gains at enormous costs, including rising inequality and widespread uncompensated environmental damage. The world is literally on fire,” said Charles Cohn, chairman of Patagonia’s board of directors. “Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees and deeper customer loyalty. It is the future of business if we are to build a better world, and that future starts with what Yvon is doing now.”
