“Earth is now our sole shareholder,” he said. “100% of the company’s voting shares are transferred to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the non-voting shares had been sold to Holdfast Collective, a non-profit organization dedicated to fighting the environmental crisis and defending nature “.
Additionally, profits that are not reinvested in the business will be distributed by Patagonia as a dividend to the Holdfast Collective to help tackle climate change, according to a press release. The company expects it to pay an annual dividend of approximately $ 100 million, an amount that may change depending on the health of the company.
“It’s been half a century since we started our responsible business experiment,” Chouinard, 83, said in the statement. “If we have any hope of a thriving planet 50 years from now, it requires all of us to do all we can with the resources we have. As a business leader I never wanted to be, I’m doing my part. Instead of extracting value from nature and turning it into wealth, we are using the wealth created by Patagonia to protect its source. “
“I am serious about saving this planet,” he added.
The decision, which was first reported by the New York Times, reflects Chouinard’s offbeat approach to tying his business to conservation and political activism over the course of his nearly five-decade career. In recent years, for example, the company has criticized President Donald Trump and members of his administration for downsizing the protection of public lands and went so far as to sue Trump.
Then, in 2021, Patagonia announced it would no longer sell its wares at a popular Wyoming ski resort after one of the owners hosted a fundraiser with Rep. Marjorie Taylor Greene (Ga.) And other Republicans who support Trump. .
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The company has also pursued more traditional forms of activism. In addition to making products with materials that cause less harm to the environment, Patagonia has donated 1% of its sales primarily to grassroots environmental nonprofits for years and will continue to do so.
The company funded a 2014 documentary film called “DamNation,” which aimed to mobilize support for dam demolitions in order to revive wild fish populations.
In Wednesday’s letter, Chouinard explained that selling Patagonia or going public were both imperfect options. Although the company could have been sold and all profits donated, there was no guarantee that a new owner would maintain the company’s values or ensure that all of its employees remained employed. And making the company public, Chouinard wrote, would be a “disaster”.
“Even well-intentioned public companies are under too much pressure to create short-term gains at the expense of long-term viability and responsibility,” he wrote.
The choice to give Patagonia as a gift is the latest step in the company’s long experiment in responsible business, wrote Chouinard.
“If we have any hope in a thriving planet, much less a thriving business, 50 years from now, it will take us all to do what we can with the resources we have,” he wrote. “This is another way we have found to do our part.”
Ryan Gellert, CEO of Patagonia, 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 both wanted to protect the purpose of the company. activities and immediately and permanently release more funds to fight the environmental crisis, “he said. “We believe this new facility offers both and we hope it inspires a new way of doing business that puts people and the planet first.”
Under the new agreement, the Chouinard family will lead the Patagonia Purpose Trust and the philanthropic work done by the Holdfast Collective, according to the press release. The leadership of the company will not change either. Gellert will continue to serve as the company’s CEO while the Chouinard family will remain on the Patagonia board of directors.
The other board members praised the transfer of ownership.
“Companies that create the next model of capitalism through a deep commitment to purpose will attract more investment, better employees and greater customer loyalty,” said Charles Conn, chairman of the board. “They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.”
Board member Kristine McDivitt Tompkins said in the nearly 60 years she met Chouinard “her vision has never wavered.”
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