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Patagonia founder gives away company: ‘Earth is now our only shareholder’

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SEPTEMBER 14, 2022

Patagonia founder Yvon Chouinard announced Wednesday that he is giving away the outdoor-apparel company — an unorthodox move intended to help combat climate change and the environmental crisis.

In a letter shared to the company’s website, Chouinard wrote that ownership of the company, which was founded in 1973 and reportedly valued at about $3 billion, has been transferred to a trust that was created to protect the company’s values and mission as well as a nonprofit organization.

“Earth is now our only shareholder,” it said. “100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.”

The decision, which was first reported by the New York Times, reflects Chouinard’s maverick approach to tying his business to conservation and political activism over his roughly five-decade career. In recent years, for instance, the company has lambasted President Donald Trump and members of his administration for scaling back public lands protections and went as far as suing Trump.

Then in 2021, Patagonia announced it would no longer sell its merchandise at a popular Wyoming ski resort after one of the owners hosted a fundraiser featuring Rep. Marjorie Taylor Greene (Ga.) and other Republicans who support Trump.

In Wednesday’s announcement, Chouinard explained that selling Patagonia or going public were both flawed options. While the company could have been sold and all the profits donated, there wasn’t a guarantee that a new owner would maintain the business’s values or ensure that all of its workers stayed employed. And taking the company public, Chouinard wrote, would have been a “disaster.”

“Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility,” he wrote.

Choosing to give away Patagonia is the latest step in the company’s lengthy experiment in responsible business, Chouinard wrote. In addition to making products with materials that cause less harm to the environment, for years the company has donated 1 percent of its sales largely to grass-roots environmental nonprofits, and will continue to do so.

“If we have any hope of a thriving planet — much less a thriving business — 50 years from now, it is going to take all of us doing what we can with the resources we have,” he wrote. “This is another way we’ve found to do our part.”

Ryan Gellert, Patagonia’s CEO, 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 wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis,” he said. “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.”

Under the new arrangement, the Chouinard family will guide the Patagonia Purpose Trust and the philanthropic work carried out by the Holdfast Collective, according to the news release. The company’s leadership also will not change. Gellert will continue to serve as the company’s CEO while the Chouinard family remains on Patagonia’s board.

The other board members praised the transfer of ownership.

“Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty,” Charles Conn, chair of the board, said in a statement. “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 roughly 60 years she’s known Chouinard “his vision has never wavered.”


Courtesy/Source: Washington Post

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