Patagonia is a company known for its environmental activism, a certified B Corp which donates 1% of its sales to initiatives that act on climate change. Now the founder is taking the fight to new heights… by giving the company away.
“Instead of ‘going public’, you could say we’re ‘going purpose’.”
Yvon Chouinard is the founder of Patagonia, a retailer specialising in rugged, outdoor clothing. Mr Chouinard took the company to epic hights, from its humble beginnings repurposing rugby shirts as a protective layer for use during rock climbing activities, to a $US3 billion enterprise spanning hundreds of stores across five continents. In an open letter posted to the Patagonia website and social media, Chouinard announced that he would be giving his company away in an effort to fight worsening climate issues and hopefully save the planet.
After considering the many options available, including selling the company and donating the money to charity, or taking the company public, Chouinard decided that giving up ownership of Patagonia would have the greatest impact. He stated:
“While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact.”
“Instead of ‘going public’, you could say we’re ‘going purpose’.”
Who Owns The Company Now?
Although this is not the first time Patagonia has been associated with environmental advocacy, this move certainly marks the most significant action to date. Now, instead of donating a portion of the company’s sales to environmental causes, Mr Chouinard has raised the stakes by transforming how all the profits of the company will be used. It’s a top-down re-alignment with the company’s commitment to making Earth it’s “only shareholder” and it starts with how the company’s ownership is structured. Firstly, a majority of Patagonia’s stock has been transferred into an environmental non-profit called the Holdfast Collective, which now owns 98 of the company, including all the non-voting stock. The remaining 2% has been transferred to the Patagonia Purpose Trust, an entity that contains all voting stock and was created to preserve the company’s values and environmental mission and will approve key company missions, including the appointment of members to the board of directors. Mr Chouinard’s family will remain board members and have pledged to guide the newly formed Trust through this period of transition and into the future.
Importantly, whilst the company will remain a private, ‘for-profit’ endeavour, under the new structure, any profit that is not reinvested back into the company will be made available to fight climate change, defend nature and protect the environment.
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits,” Mr Chouinard said.
“But it’s also resilient. We can save our planet if we commit to it.”
