Under his watch, Patagonia became an eco reference point, the brand and company that showed fashion the direction forward.
Now the founder, 83, and his family have taken the next step and baked the push for sustainability into Patagonia’s corporate structure — “going purpose” instead of “going public” – and is declaring that the Earth is its only shareholder.
The Chouinards have transferred their ownership of the company to two new entities, the Patagonia Purpose Trust and the Holdfast Collective.
Patagonia said the trust owns all of the company’s voting stock, or 2 percent of the overall shares, and creates “a more permanent legal structure to enshrine Patagonia’s purpose and values.”
“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 collective owns the other 98 percent of the company and will “use every dollar received from Patagonia to protect nature and biodiversity, support thriving communities and fight the environmental crisis.”
Profits not reinvested back into the company — about $100 million annually depending on business — will be paid as a dividend to the collective.
The Chouinards are not walking away. They will guide the trust, electing and overseeing the company’s board while also steering the collective’s philanthropic work.
“It’s been a half-century since we began our experiment in responsible business,” Chouinard said. “If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. 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 company, which is still led by chief executive officer Ryan Gellert, remains a B Corp and will continue to give 1 percent of sales each year to grassroots activists.
Charles Conn, chair of the board, said: “The current system of capitalism has made its gains at an enormous cost, including increasing inequality and wide-scale uncompensated environmental damage. The world is literally on fire. Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees and deeper customer loyalty. They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.”
It took fashion 50 years to come around to something like Patagonia’s way of seeing the world — but it’s not clear just how long it will take an industry still obsessed with big-time buyouts and billion-dollar IPOs to fully live up to Chouinard’s example.