On Sept. 14, Patagonia announced the company’s intent to sell the brand to Planet Earth.
Now how exactly would this work?
Patagonia owner, Yvon Chouinard aged 83 years old, will donate 98 percent of Patagonia stock and profit to The Holdfast Collective. The Holdfast Collective identifies as a nonprofit organization dedicated to the fight for the protection of nature and biodiversity. The New York Post writes that all of Patagonia’s nonvoting stock donated to this collective will be invested in projects concerned with environmental protection. The remaining two percent of Patagonia stock will go to the Patagonia Purpose Trust. This trust is tasked with maintaining and overseeing the company’s long-held values and missions, reserving the right to decide and approve major company decisions.
Yvon Chouinard, owner and founder of Patagonia, earned attention and fame as a Yosemite National Park rock climber in the ‘60s. Patagonia started with Chouinard’s idea of making metal climbing pitons. Climbing pitons are essentially composed of metal spikes, used to wedge into cracks in rocks while climbing steep inclines. For years, Chouinard lived out of his van in various parks, fashioning these pitons, and dreaming of his future business. Additionally being involved in various other outdoor sports: ice climbing, kayaking, surfing and more, Chouinard eventually expanded the company’s outputs.
In 1973, almost 50 years ago, the company of Patagonia was formed. Chouinard dedicated this company to the preservation of the Earth and environmentalism from the start. Patagonia has always prided itself on its sustainable practices, donating a portion of yearly profits to non-governmental organizations or NGOs and carefully choosing the raw materials in all products.
In 2002, roughly 29 years following the advent of Patagonia, Chouinard founded “1% for the Planet”, despite having been donating this one percent since the 1980s, the official advent happened in the early 2000s. The Guardian reports Patagonia has announced this program has donated roughly $140 million to the preservation of Earth’s natural environments.
Patagonia also identifies as one of the first pioneering companies to become a B-Corp. B-Corps refer to corporations or businesses that participate in public transparency, purpose and profit accountability and verified social and environmental performance. Patagonia has since prided itself on maintaining transparency and valuing environmental protection.
Where did this idea come from?
When asked where the inspiration for the donation of the company came from, Chouinard claimed Forbes played a part. “I was in Forbes magazine listed as a billionaire, which really, really pissed me off.” Estimated to have a net worth of 1.2 billion, and owning a company valued at 3 billion, Chouinard had the option to either sell the brand for a profit or take it public. Chouinard discussed the possibilities with his wife, two children and an entire team of company lawyers. Together they created an arrangement that allowed Patagonia to technically still operate as a company for profit, yet the proceeds are intended for environmental preservation and restoration.
“Earth is now our only shareholder,” says Patagonia in an open letter on the company’s website.
The multibillion-dollar company will continue to make outdoor active gear and sportswear and will remain functioning as a for-profit business. The profits gained will, when necessary, be used to both compensate employees and reinvest in the business, however, all excess will be donated to the Holdfast Collective and the Patagonia Purpose Trust. Chouinard also clarifies that the company will continue the tradition of donating the yearly percentage to 1 percent for the Planet, even despite the shift in company ownership.
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it,” Chouinard said.