Patagonia Founder Yvon Chouinard Gives Company Away, Says Earth Is Only Shareholder

The founder of outdoor clothing brand Patagonia, Yvon Chouinard, has given away his company in an effort to do  more for the planet. The Chouinard family has transferred ownership to two new entities: Patagonia Purpose Trust and the Holdfast Collective. Every dollar not reinvested back into Patagonia will be distributed as dividends to protect the planet.

Long Story, Cut Short
  • Patagonia founder Yvon Chouinard, his wife and two adult children will give away their ownership in the outdoor fashion company Chouinard started almost 50 years ago.
  • The company expects to contribute about $100 million a year, depending on the health of the business.
  • The Patagonia Purpose Trust will get all the voting stock, which is 2% of the total, and will use it to create a “more permanent legal structure to enshrine Patagonia’s purpose and values.”
Yvon Chouinard wrote in a signed sttement: 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."
Going Purpose Yvon Chouinard wrote in a signed sttement: 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." Patagonia, Inc

The billionaire founder of outdoor fashion brand Patagonia on Wednesday gave his company away. Eighty-three-year-old Yvon Chouinard, known for his stand on environmental issues, in a signed statement on the company's website wrote that he could have either sold Patagonia and donated all the money, or gone public.

Instead, Chouinard, his wife and their two children will transfer all of Patagonia's voting shares, or stock that gives the holder voting rights, in the company to a trust in charge of ensuring the brand's environmental values are respected.

"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," he wrote.

The letter was titled: "Earth is now our only shareholder."

Chouinard elaborated: "100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis."

Founded by Chouinard in 1973, Patagonia is a certified B Corporation based in Ventura, California, US. Patagonia operates its apparel and equipment, food, and related businesses through the following subsidiaries: Patagonia, Inc. (apparel and equipment), Patagonia Provisions (food), Patagonia Media (books, films and multimedia projects), Fletcher Chouinard Designs, Inc. (surfboards), Tin Shed Ventures, LLC (investments), and Worn Wear, Inc. (used and upcycled apparel), and Great Pacific Child Development Center (onsite childcare and development).

The Chouinard family will guide the Patagonia Purpose Trust, electing and overseeing its leadership. Family members will continue to sit on Patagonia’s board, along with Kris Tompkins, Dan Emmett, Ayana Elizabeth Johnson, Charles Conn (chair of the board), and Ryan Gellert, our CEO. The family will also guide the philanthropic work performed by the Holdfast Collective.
One From The Archives The Chouinard family will henceforth guide the Patagonia Purpose Trust, electing and overseeing its leadership. Family members will continue to sit on Patagonia’s board, along with Kris Tompkins, Dan Emmett, Ayana Elizabeth Johnson, Charles Conn (chair of the board), and Ryan Gellert, our CEO. The family will also guide the philanthropic work performed by the Holdfast Collective. Patagonia, Inc

The new structure and the new face

Patagonia’s new owners are the Holdfast Collective and the Patagonia Purpose Trust. Ryan Gellert will continue to serve as CEO and the Chouinard family will continue to sit on Patagonia’s board, along with Kris Tompkins, Dan Emmett, Ayana Elizabeth Johnson, Charles Conn (chair of the board), and Gellert.

The Holdfast Collective owns 98% of the company and all of the nonvoting stock. The Patagonia Purpose Trust owns 2% of the company and all of the voting stock. Nonvoting stock carries economic value but not decision-making authority. Voting stock has both economic value and decision-making authority. The Patagonia Purpose Trust was created solely to protect our company’s values and mission. It owns all of the voting stock of the company, which gives it the right to approve key company decisions.

The Patagonia Purpose Trust will help ensure that there is never deviation from the intent of the founder and to facilitate what the company continues to do best: demonstrate as a for-profit business that capitalism can work for the planet.

The Holdfast Collective, on the other hand, will use every dollar received from Patagonia to protect nature and biodiversity, support thriving communities and fight the environmental crisis. Each year, profits that are not reinvested back into the business will be distributed by Patagonia as a dividend to the Holdfast Collective to help fight the climate crisis. The company projects that it will pay out an annual dividend of roughly $100 million, depending on the health of the business.

Gellert said in a statement: “Two years ago, the Chouinard family challenged a few of us to develop a new structure with two central goals. They wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis. We believe this new structure delivers on both and we hope it will inspire a new way of doing business that puts people and planet first.”

Patagonia’s new owners are the Holdfast Collective and the Patagonia Purpose Trust. The Holdfast Collective owns 98% of the company and all of the nonvoting stock. The Patagonia Purpose Trust owns 2% of the company and all of the voting stock. Nonvoting stock carries economic value but not decision-making authority. Voting stock has both economic value and decision-making authority.
No Holds Patagonia’s new owners are the Holdfast Collective and the Patagonia Purpose Trust. The Holdfast Collective owns 98% of the company and all of the nonvoting stock. The Patagonia Purpose Trust owns 2% of the company and all of the voting stock. Nonvoting stock carries economic value but not decision-making authority. Voting stock has both economic value and decision-making authority. Patagonia, Inc

Climate change: The tipping point

Chouinard wrote that he never wanted to be a businessman, and started as a craftsman, making climbing gear for his friends and himself, then got into apparel. "As we began to witness the extent of global warming and ecological destruction, and our own contribution to it, Patagonia committed to using our company to change the way business was done. If we could do the right thing while making enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way."

Patagonia's corporate activism is a large part of its brand identity. It gives away 1% of its sales every year. The One Percent for the Planet non-profit was founded by Yvon Chouinard and Blue Ribbon Flies founder Craig Mathews in 2002 to "encourage more businesses to donate 1% of sales to environmental groups". In 2017, Patagonia sued then-President Donald Trump over his administration's move to shrink two national monuments in Utah. "The president stole your land," the company's website said. "This is the largest elimination of protected land in American history."

However, on Wednesday, Chouinard felt time was running out. He wrote: "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. Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it."

Board member Ayana Elizabeth Johnson reacted: “Every time you read a new scientific report, it's clear the climate crisis is happening faster than we thought and it's worse than we thought. The stakes could not be higher. If we want to protect nature and support communities, businesses can’t continue to adhere to the prevailing economic model. Patagonia has been breaking the mold for decades, and now they have shattered it. Now I want to know, which companies will be next to step up?”

Chouinard underlined: "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."
Not Enough Chouinard underlined: "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." Patagonia, Inc
 
 
  • Dated posted: 15 September 2022
  • Last modified: 15 September 2022