Patagonia is making the ultimate vow to protect the planet.
In a move unheard of in the fashion industry, founder Yvon Chouinard has given the entirety of his company’s shares to a non-profit organisation and a trust, both of which will reinvest the brand’s profits toward combating climate change, preserving land and support “thriving communities,” Patagonia announced Wednesday. The news was first reported in The New York Times.
Each year, revenue that is not reinvested back into Patagonia — about $100 million — will be distributed as dividends to the Holdfast Collective, a non-profit organisation that will fund grassroots environmental organisations and back political candidates that pledge to fight the environmental crisis and protect biodiversity.
The Patagonia Purpose Trust now owns the voting stock of the company, with the purpose of holding the brand accountable to its commitments and demonstrating that, even as a for-profit business, “capitalism can work for the planet.”
“Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source,” Chouinard said in a statement. “We’re making Earth our only shareholder.”
“It’s been a half-century since we began our experiment in responsible business,” he added. “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.”
Founded in 1973, Patagonia has created a blueprint for corporate activism ever since the company’s decision to pledge a portion of its sales to the preservation and restoration of the environment in 1985. Patagonia was among the first apparel companies to invest in the circular economy, allowing customers to sell their secondhand parkas and fleece pullovers.
According to the Times report, the Chouinard family will pay about $17.5 million in taxes on the transfer because the shares are going to a trust.
Patagonia will continue to be classified as a B Corp. The leadership structure of the company remains unchanged, with CEO Ryan Gellert continuing at its helm. The Chouinards will keep their board seats, along with Geller, Kris Tompkins, Dan Emmett, Dr. Ayana Elizabeth Johnson, and board chair Charles Conn.
