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