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

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.”

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?”