Sep 14, 2022 - Economy & Business

Patagonia shifts ownership, all profits to go to fight climate change

American outdoor clothing brand company Patagonia store seen in Hong Kong
American outdoor clothing brand company Patagonia store in Hong Kong. Photo: Budrul Chukrut/SOPA Images/LightRocket via Getty Images

Patagonia founder Yvon Chouinard on Wednesday announced that he and his family are transferring 100% of the company’s stock to a specially designed trust and a nonprofit organization.

Why it matters: Changing ownership ensures the company will keep its independence and make sure all of its profits are used to combat climate change.

Driving the news: The Chouinard family said it has transferred 100% of its ownership to two new entities: Patagonia Purpose Trust and the Holdfast Collective.

  • The company told Axios in an emailed statement that "every dollar that is not reinvested back into Patagonia will be distributed as dividends to protect the planet."
  • Patagonia Purpose Trust, which holds all voting power in the company, will provide a legal structure to help keep the company's values in place, the company said.
  • "It 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 company said.
  • The new Holdfast Collective, which doesn't hold any voting stock, will look to help protect nature and the climate.
  • Chouinard and the Chouinard family will remain on the board of Patagonia.

What they're saying: "Instead of 'going public,' you could say we’re 'going purpose,'" Chouinard wrote in a letter on the company's website.

  • "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."
  • "As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source."
  • "We’re making Earth our only shareholder. I am dead serious about saving this planet.”

The bottom line: Patagonia considered, and rejected the idea of a sale or IPO, as none guaranteed that its values could be upheld.

  • "Truth be told, there were no good options available. So, we created our own."

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