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PATAGONIA FOUNDER GIVES AWAY COMPANY: ‘EARTH IS NOW OUR ONLY SHAREHOLDER’


OWNERSHIP OF THE COMPANY, FOUNDED IN 1973 AND REPORTEDLY VALUED AT ABOUT $3
BILLION, HAS BEEN TRANSFERRED TO A TRUST CREATED TO PROTECT THE FIRM’S VALUES,
AS WELL AS A NONPROFIT ORGANIZATION

By Allyson Chiu
Updated September 14, 2022 at 10:11 p.m. EDT|Published September 14, 2022 at
5:50 p.m. EDT

Patagonia founder Yvon Chouinard. (Fabian Marelli/GDA/AP)
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Patagonia founder Yvon Chouinard announced Wednesday that he is giving away the
outdoor-apparel company — an unorthodox move intended to help combat climate
change and the environmental crisis.

In a letter posted to the company’s website, Chouinard wrote that ownership of
the company, which was founded in 1973 and reportedly valued at about $3
billion, has been transferred to a trust that was created to protect the
company’s values and mission as well as a nonprofit organization.



10 steps you can take to lower your carbon footprintArrowRight


“Earth is now our only shareholder,” it said. “100% of the company’s voting
stock transfers to the Patagonia Purpose Trust, created to protect the company’s
values; and 100% of the nonvoting stock had been given to the Holdfast
Collective, a nonprofit dedicated to fighting the environmental crisis and
defending nature.”

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In addition, profits that aren’t reinvested back into the business will be
distributed by Patagonia as a dividend to the Holdfast Collective to help
address climate change, according to a news release. The company projects that
it will pay out an annual dividend of about $100 million — an amount that could
change depending on the health of the business.


Yvon Chouinard spoke about preserving public lands in a Patagonia advertisement
released on Aug. 20, 2017. (Video: Patagonia/YouTube)

“It’s been a half-century since we began our experiment in responsible
business,” Chouinard, 83, said in the release. “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.”

“I am dead serious about saving this planet,” he added.

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The decision, which was first reported by the New York Times, reflects
Chouinard’s maverick approach to tying his business to conservation and
political activism over his roughly five-decade career. The company lambasted
President Donald Trump and members of his administration for scaling back public
land protections, and even sued Trump over his move to cut Utah’s Bears Ears
National Monument by 85 percent.

Several of Chouinard’s allies said that his move reflected his long-standing
approach to environmentalism.

“It’s kind of crazy to say it doesn’t surprise me,” said Josh Ewing, who worked
with Patagonia to expand Bears Ears’ boundaries while heading the nonprofit
Friends of Cedar Mesa.

“I’ve had the opportunity to appreciate the just unique and unprecedented
leadership that the Chouinards, as well as staff at Patagonia, have put into
conservation and climate leadership,” said Ewing, who now directs the Rural
Climate Partnership.



In 2021, Patagonia announced it would no longer sell its merchandise at a
popular Wyoming ski resort after one of the owners hosted a fundraiser featuring
Rep. Marjorie Taylor Greene (Ga.) and other Republicans who support Trump.

Patagonia, REI blast national monument rollbacks; 'The President Stole Your
Land'

The company has also pursued more traditional forms of activism. Beyond making
products with materials that cause less harm to the environment, for years
Patagonia has donated 1 percent of its sales largely to grass-roots
environmental nonprofits, and will continue to do so.

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Patagonia funded a 2014 documentary film called “DamNation,” which aimed to
mobilize support for demolishing dams in order to revive wild fish populations.

I’m not going to ‘let evil win’: Patagonia’s billionaire owner says he plans to
sue Trump

Chouinard has also supported groups that work directly on elections, such as the
League of Conservation Voters. LCV President Gene Karpinski said the retail
magnate backed the group’s efforts to register and turn out young voters and
voters of color.

Chouinard has “been a model for building a sustainable business and now he’s a
model for doing sustainable giving,” Karpinski said. “From the beginning, his
company had a vision for being best in class as a sustainable company, and now
he’s ensuring that will be the path going forward.”

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In Wednesday’s letter, Chouinard explained that selling Patagonia or going
public were both flawed options. While the company could have been sold and all
the profits donated, there wasn’t a guarantee that a new owner would maintain
the business’s values or ensure that all of its workers stayed employed. And
taking the company public, Chouinard wrote, would have been a “disaster.”

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“Even public companies with good intentions are under too much pressure to
create short-term gain at the expense of long-term vitality and responsibility,”
he wrote.

Choosing to give away Patagonia is the latest step in the company’s lengthy
experiment in responsible business, Chouinard wrote.

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“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,” he wrote. “This is another way we’ve found to do our part.”

Ryan Gellert, Patagonia’s CEO, said in a statement that the Chouinard family
“challenged” him and a few others two years ago to develop a new structure for
the company 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,” he said. “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.”

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Under the new arrangement, the Chouinard family will guide the Patagonia Purpose
Trust and the philanthropic work carried out by the Holdfast Collective,
according to the news release. The company’s leadership also will not change.
Gellert will continue to serve as the company’s CEO while the Chouinard family
remains on Patagonia’s board.

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To mark the occasion, Patagonia tweeted, “We’re closed today to celebrate this
new plan to save our one and only home. We’ll be back online tomorrow.” On
Wednesday night, staff attended a “party for the planet” at the company’s campus
in Ventura, Calif., a spokesperson said.

Members of Patagonia’s board praised the transfer of ownership.

“Companies that create the next model of capitalism through deep commitment to
purpose will attract more investment, better employees, and deeper customer
loyalty,” Charles Conn, chair of the board, said in a statement. “They are the
future of business if we want to build a better world, and that future starts
with what Yvon is doing now.”



Some retail industry experts said the move could reverberate beyond a single
company.

Chouinard has “just set a new bar for retailers,” Paula Rosenblum, managing
partner of at the retail consulting firm RSR, wrote in an email. “No
greenwashing here. He put his money where his mouth was.”

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