“Earth is now our only shareholder”
Outdoor apparel company Patagonia announced Wednesday that its founder Yvon Chouinard and his family have transferred ownership of the entire company to a climate-focused non-profit and a newly created trust, with all future non-reinvested profits generated by the company dedicated to “protect the planet.”
The Patagonia brand was founded by Chouinard in 1973, and the Ventura, California-based company now owns and operates more than 70 stores globally, with estimated annual sales of approximately $1 billion. The company has been a long-time advocate of responsible business practices, becoming a B-Corp in 2011, and amending its articles of incorporation the following year, adopting a commitment to sustainability and treating workers well, and registering the business as a California Benefit Corporation. In 2018, Patagonia’s purpose was changed to “We’re in business to save our home planet.”
In a statement on the company’s webpage announcing the move entitled “Earth is now our only shareholder,” Chouinard explained that several options were explored in order to find a way to contribute more towards addressing the environmental crisis. Chouinard wrote:
“Truth be told, there were no good options available. So, we created our own.
“Instead of “going public,” you could say we’re “going purpose.” Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.”
Ownership of the company has been transferred to two entities. The Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature, holds a 98% interest, consisting of all of the non-voting stock in the company, with the remaining shares, representing the voting stock, held by Patagonia Purpose Trust, a new entity “created solely to protect our company’s values and mission,” which will approve all key company decisions.
The Chouinard family will guide both the new trust as well as the philanthropic work performed by the Holdfast Collective.
Under the new structure, the company stated that “every dollar that is not reinvested back into Patagonia will be distributed as dividends to protect the planet,” estimating that it will pay out a approximately $100 million per year to this purpose.
The company will also continue its long-standing practice of donating 1% of sales to to grassroots environmental nonprofits.
“It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started. If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part.”