Patagonia Says Ownership Transfer Will Help Fight the Climate Crisis
Patagonia’s founders of nearly 50 years, the Chouinard family, have transferred ownership of the company to two new entities: Patagonia Purpose Trust and Holdfast Collective.
In line with the company’s mission of sustainability, every dollar Patagonia makes will either be reinvested back into the brand or distributed as dividends toward protecting the environment and planet.
Yvon Chouinard, Patagonia founder, former owner, and current board member said “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.”
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“As the business leader I never wanted to be, I am doing my part,” Chouinard added. “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.”
What This Means
The Patagonia Purpose Trust now owns all the voting stock of the company (2% of the total stock). The Holdfast Collective owns all the nonvoting stock (98% of the total stock). These moves create a more permanent legal structure that aligns with the brand’s values and ensure that funds go toward protecting nature and biodiversity, as well as supporting the community and fighting the environmental crisis.
The company expects that it will pay out an annual dividend of $100 million, depending on the health of the business, to the Holdcast Collective to fight climate change.
Patagonia will remain a B Corp, investing 1% of sales toward grassroots activists, and its current leadership will stay in place.
Ryan Gellert will continue as CEO and the Chouinard family will be significantly involved, overseeing Patagonia’s board of directors by guiding the brand’s controlling shareholder, the Patagonia Purpose Trust. They will also be guiding any charitable work through the Holdfast Collective.
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“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,” said Ryan Gellert, CEO of Patagonia. “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.”
Patagonia communicated the news to its employees during a global town hall meeting on September 14 and has updated its website to feature a letter from founder Yvon Chouinard and the tagline “Earth is now our only shareholder.”
“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?” said Dr. Ayana Elizabeth Johnson, Patagonia board of directors.
