Patagonia’s founder is giving away his ownership of the apparel company with the goal of fighting climate change.
The company, estimated to be worth $3 billion, will now be owned by a collective that will use all of the profits that are not reinvested in the company to fund projects and organizations focused on fighting climate change and protecting biodiversity and wildland. Patagonia expects to donate up $100 million annually, depending on its market performance.
“While we’re doing our best to address the environmental crisis, it’s not enough,” said Yvon Chouinard, who founded Patagonia 50 years ago.
“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. 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. Truth be told, there were no good options available. So, we created our own,” he added.
The company will now be owned by a newly established trust called the Patagonia Purpose Trust and the Holdfast Collective. It gains all of the voting stocks, which it will use to set up a “more permanent legal structure to enshrine Patagonia’s purpose and values.” Members of the Chouinard family will continue to oversee the trust.
“Every dollar that is not reinvested back into Patagonia will be distributed as dividends to protect the planet,” the company said.
Patagonia, a certified B-Corp company, donates 1% of its annual sales to grass root efforts that focus on preserving the environment — something it plans to continue doing in the future.