Featured image credit: Kyle Sparks
It’s all change at Patagonia HQ. Nearly 50 years on since founder and adventure industry legend Yvon Chouinard kicked things off, the Chouinard family has announced they’re transferring – effective immediately – all ownership to two new entities: Patagonia Purpose Trust and the Holdfast Collective. Most significantly, every dollar that is not reinvested back into Patagonia will now be distributed as dividends to protect the planet. Yes, before you ask, we’re into it. We’re very into it.
“Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source”
The Patagonia Purpose Trust now owns all of the voting stock of the company (two percent of the total stock) and exists to create a more permanent legal structure to enshrine Patagonia’s purpose and values. It will help to ensure that there is never deviation from the intent of the founder and also, the brand hopes, demonstrate that capitalism can, when it’s done in the right way, work for the planet.
The Holdfast Collective owns all of the nonvoting stock (98% of the total stock), and will, we’re told, use every dollar received from Patagonia to fight the good fight. You name the eco-friendly cause, it’s likely that money’s going to it in some way or other. From protecting mother nature and biodiversity to supporting thriving communities and fighting the environmental crisis, that’s where their energies are focused. Essentially, and this right here is the bottom line, all profits that are not reinvested back into the business will be distributed by Patagonia as a dividend to the Holdfast Collective with the aim of fighting the climate crisis. The company is, at the current time of writing, projecting that it will pay out an annual dividend of roughly $100 million (approximately £87 million). This is, of course, massively dependent on the health of the business but it is, we think, exciting nevertheless.
What The Big Patagonia Players Have To Say
Yvon Chouinard, Patagonia founder, former owner, and current board member:
“It’s been a half-century since we began our experiment in responsible business. 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.”
Ryan Gellert, CEO of Patagonia and Patagonia board member said:
“Two years ago, the Chouinard family challenged a few of us to develop a new structure 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. 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.”
Kristine McDivitt Tompkins, board of directors:
“I first met Yvon when he was around 24 and today, he is almost 84. In all those years, his vision has never wavered. He wanted to do things his own way and on his own terms. And while he is in good health now, he wanted to have a plan in place for the future of the company and the future of the planet. I believe this plan that he and his family helped create is tectonic. It will make the company more competitive and its employees around the world will forever be empowered by purpose.”
Dr. Ayana Elizabeth Johnson, board of directors:
“Every time you read a new scientific report, it’s clear the climate crisis is happening faster than we thought and it’s worse than we thought. The stakes could not be higher. If we want to protect nature and support communities, businesses can’t continue to adhere to the prevailing economic model. Patagonia has been breaking the mold for decades, and now they have shattered it. Now I want to know, which companies will be next to step up?”
Charles Conn, chair of the board:
“The current system of capitalism has made its gains at an enormous cost, including increasing inequality and widescale 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.”
Dan Emmett, board of directors:
“As founder of a company that has been in business for nearly 50 years, I’ve seen the positive and negative impact a business can have on its communities and employees. But while we and others do take meaningful steps to mitigate the impact we have on the planet, Patagonia’s new ownership structure introduces a new model that goes far beyond anything that exists today. And it’s true to form for my life-long friend and fellow environmentalist, Yvon Chouinard.”
The company shared the news first with its employees in a global town hall event on September 14, 2022. Soon after, the website Patagonia.com was updated to state that Earth is now our only shareholder and to include a letter from founder Yvon Chouinard.