Yvonne Chouinard, founder and owner of Patagonia.
Courtesy of Jeff Johnson and Patagonia
Patagonia founder Yvonne Chouinard, his wife and two adult children, are ceding their ownership of the clothing maker he started nearly 50 years ago, and allocating all of the company’s profits to projects and organizations that will protect wild lands and biodiversity and fight the climate crisis.
The company is worth about $3 billion, according to The New York Times.
In a message about the decision, posted on the Patagonia website on Wednesday, Chouinard wrote of “reimagining capitalism,” and said:
“While we do our best to address the environmental crisis, it is not enough. We needed to find a way to invest more money in fighting the crisis while keeping the company values intact. One option was to sell Patagonia and donate all the money. But we cannot be sure that the owner What’s new will maintain our values or keep our team of people around the world employed.
The other path was to make the company public. What a disaster it could have been. Even well-intentioned public companies are under great pressure to make short-term gains at the expense of long-term vitality and responsibility.
Truth be told, there were no good options available. So, we created our own.”
The company said in a statement that the shares of the privately held company will now be owned by a climate-focused trust and a group of nonprofit organizations, called the Patagonia Purpose Trust and Holdfast Collective respectively, noting that “every dollar not reinvested in Patagonia will be distributed as dividends to protect Patagonia.” planet.”
The trust will receive all voting shares, which represent 2% of the total, and use them to create a “more permanent legal structure to perpetuate the purpose and values of Patagonia.” It will be supervised by family members and close advisors.
Holdfast Collective owns all of the non-voting stock in Patagonia, which is 98%.
Patagonia expects to generate and donate approximately $100 million annually depending on the health of the company. The company now sells new and used outerwear, gear for outdoor activities such as camping, fishing and climbing, and sustainably sourced food and beverage.
As a B-Corp and California Benefit Corporation, Patagonia has already donated one percent of its sales each year to grassroots activists, and intends to continue to do so. Less than 6000 companies worldwide have been certified as B-Corp. They must meet the rigorous Environmental, Social and Governance criteria and standards set by B Labs to obtain certification.
Ryan Gellert will continue to serve as CEO of Patagonia, and the Chouinards will remain on the Patagonia board of directors following the clothing maker’s expanded philanthropic strategy. After informing its employees on Wednesday of the move, the company updated its website to state that “Land is now our sole shareholder.”