The $3 billion worth of Patagonia was just donated by its founder to environmental causes. The Patagonia founder, Yvon Chouinard, along with his wife and two grown children, have decided to donate their shares of the firm to environmental causes and charities in an effort to combat climate change.
The New York Times estimates the value of the company at $3 billion.
On Wednesday, Chouinard issued a message on the Patagonia website in which he discussed the choice and discussed “reimagining capitalism,” saying:
Though we’re making strides to solve the ecological catastrophe, our efforts fall short. Without compromising the company’s core principles, we had to find a method to funnel greater resources into responding to the crisis. Donating the proceeds from a Patagonia sale was one possibility. Unfortunately, we couldn’t be certain that a new owner would continue to uphold our standards or retain our global staff on the job.
Alternatively, the company may have gone public. Holy crap, that would have been terrible. There is too much pressure on even well-intentioned public corporations to prioritise short-term profits above long-term growth and accountability.
The truth is that none of the choices were particularly appealing. Therefore, we made our own.
The privately held firm announced in a statement that the Patagonia Purpose Trust and the Holdfast Collective will become the new owners of the firm’s stock, with the former promising to spend “every dollar that is not put back into Patagonia” to pay out “dividends to safeguard the planet.”
All of Patagonia’s voting shares (less than 2% of the total) will be transferred to the trust so that it can establish a “more permanent legal structure to entrench Patagonia’s purpose and values.” Members of the family and trusted advisors will be in charge of overseeing it.
All 98% of Patagonia’s non-voting stock is owned by the Holdfast Collective.
Assuming continued financial success, Patagonia hopes to contribute and generate around $100 million yearly. The company has expanded to include the sale of used and new outdoor clothing, equipment for camping, fishing, and climbing, and foods and drinks prepared with environmentally friendly ingredients.
Patagonia is committed to continuing its practice of donating one percent of annual sales to grassroots activists, which it began when it became a certified B-Corp and California Benefit Corporation. Fewer than 6,000 organizations in the world have earned the B-Corp certification. To earn the B Corporation seal of approval from B Labs, a company must demonstrate compliance with rigorous standards and criteria in the areas of environmental sustainability, social responsibility, and corporate governance.
While Patagonia’s philanthropic efforts have grown, the company’s leadership has not changed. CEO Ryan Gellert will continue in his role, and members of the Chouinard family will remain on the board. Employees were informed on Wednesday, and the company’s website was modified on Thursday to read, “Earth is now our lone shareholder.”