Patagonia founder Yvon Chouinard has transferred ownership of the company to two trusts that will direct all profits to protecting the global environment, according to a press release on Wednesday.
The bold business decision enshrines a new shareholder for the famous outdoor clothing company — planet Earth — and continues the Chouinard family’s dedication to combating climate change and promoting conservation causes.
“It’s been a half-century since we began our experiment in responsible business," Chouinard said in a statement. "If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder. I am dead serious about saving this planet.”
Patagonia is now owned by two entities, the Patagonia Purpose Trust and the Holdfast Collective, which together will control the company’s direction going forward and direct “every dollar that is not reinvested back into Patagonia [to] be distributed as dividends to protect the planet.”
That means that upwards of $100 million annually will be donated to environmental efforts through this arrangement.
Patagonia has been increasingly vocal about its environmental beliefs in recent years, donating Black Friday day sales to environmental causes, suing the former Trump administration to protect public lands, distancing itself from companies that harm the planet, and establishing protected land areas.
In a public letter, Chouinard describes how these and other efforts, including donating 1% of company profits to the planet and changing the mission statement, weren’t enough in the context of the worsening climate crisis.
The two most likely routes — selling the company and donating the sale profits or going public — didn’t interest him.
“One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed,” he wrote. “Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.”
In the end, the new structure maximizes the amount of money from the company that could benefit the planet, while ensuring that the Patagonia brand remains a symbol of conservation.
This is the sort of bold action that could spur broader change throughout both the public and private sectors. Just imagine what sort of transformation would be possible if more people in positions of power gained the courage to value the planet over personal profit?
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits,” Chouinard wrote. “But it’s also resilient. We can save our planet if we commit to it.”