The Earth is now our only shareholder.
If we have any hope of a prosperous planet—or at least a prosperous business—it will require all of us to do what we can with the resources available to us. Here's what we can do.
By Yvon Chouinard
I never wanted to be an entrepreneur. I started as a craftsman, making climbing gear for myself and my friends, then I moved into the locker room. As we began to witness the extent of climate change and ecological destruction—as well as our contribution to it—Patagonia committed to using our company to change the way business was done. If we could do the right thing by generating enough revenue to pay the bills, we could influence customers, other businesses, and maybe even change the system along the way.
We started with our products, using materials that caused less harm to the environment. We donate 1% of sales every year. We became a Certified B Corporation and also a California Benefit Corporation, putting our values in writing in our corporate charter as a way to preserve them. Most recently, in 2018, we changed the company's purpose to: “We are in this business to save our home, planet Earth.”
While we are doing our best to address the environmental crisis , it is not enough. We need to find a way to invest more in combating the crisis while maintaining the company's values.
“To be honest, there weren’t any good options available. So we created our own.”
One option was to sell Patagonia and donate all the money. But we couldn't be sure that a new owner would uphold our values or keep our team of people around the world employed.
Another option was to take the company public. What a disaster that would have been. Even well-intentioned public companies find themselves under too much pressure to generate short-term profits at the expense of long-term viability and responsibility.
To be honest, there weren't any good options available. So we created our own.
Instead of “going public,” we could say we are “fulfilling our purpose.” Instead of extracting value from nature and transforming it into wealth for investors, we will use the wealth Patagonia creates to protect the source of all wealth.
Here’s how it works: 100% of the company’s voting shares have been transferred to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the non-voting shares have been given to Holdfast Collective, a nonprofit organization dedicated to fighting the environmental crisis and defending nature. Funding will come from Patagonia: each year, the money we generate after reinvesting in the business will be distributed as a dividend to help combat the crisis.
It's been almost 50 years since we began our experiment in responsible business, and we're just getting started. If we have any hope of a thriving planet—or at least a thriving business—in 50 years' time, it will require all of us to do what we can with the resources we have. This is another way we've discovered to do our part.
Despite its vastness, 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 doing so.
Some questions and answers
Reporting to Earth has not been easy.
Learn more about the progress we've made in reducing our impact here .
Patagonia's new owners are Holdfast Collective and Patagonia Purpose Trust. Holdfast Collective owns 98% of the company and all of its shares are non-voting. Patagonia Purpose Trust owns 2% of the company and all of its shares are voting. Non-voting shares have economic value but no decision-making power. Voting shares have both economic value and decision-making power.
Holdfast Collective will use every dollar it receives to combat the environmental crisis, protect nature and biodiversity, and support the prosperity of communities as quickly as possible. As a 501(c)(4) nonprofit organization, the collective can advocate for political causes and candidates in addition to making donations and investing in our planet.
The collective's funding will come from Patagonia: Each year, the excess profits —the money we earn after reinvesting in the business (including the money we want to save to face an unforeseen event, such as a pandemic)— will be distributed as dividends to the collective to be used in its work.
The Patagonia Purpose Trust was created solely to protect our company's values and mission. It owns all of the company's voting shares, giving it the right to approve key decisions such as who sits on the board of directors and what changes can be made to the corporate charter, including its purpose and commitments as a B Corp.
Put another way, Patagonia's purpose is: We're in this business to save our home, planet Earth. The Patagonia Purpose Trust ensures the company's commitment to its purpose, forever.
No. Patagonia will continue to be a for-profit business, a certified B Corporation and a California benefit corporation, making the highest quality products and honoring its obligation to maintain the company's financial health while always considering the impact the business has on employees, customers and communities, as well as on the health and vitality of the natural world.
Our impact on the world stems from operating as a for-profit business. We will continue to be a beacon for the business community by demonstrating that purpose and profit are deeply intertwined.
Ryan Gellert, as CEO, and the leadership team, along with all Patagonia employees, will continue to manage the business under the direction of the board of directors. What has changed is that the company now has additional management through the Patagonia Purpose Trust.
Yes. Patagonia will continue to donate 1% of sales each year to grassroots nonprofit environmental organizations. This commitment is part of our corporate charter, which means it can no longer be changed without the approval of the Patagonia Purpose Trust.
The Chouinard family will guide the Patagonia Purpose Trust, selecting and overseeing its leadership. Family members will continue to serve on Patagonia’s board of directors alongside Kris Tompkins, Dan Emmett, Dr. Ayana Elizabeth Johnson, Charles Conn (chairman of the board), and Ryan Gellert, our CEO. Claire and Fletcher will retain their positions with the company. The family will also guide the philanthropic work undertaken by Holdfast Collective.
Employees are at the heart of Patagonia's success, and this new ownership structure is an unwavering commitment to protecting the purpose and values that drew us all to the company in the first place. We will continue to do all the amazing things that Patagonia was built on, and the company will continue to do its best to be a great employer.
No. This is not an excuse to ignore the very real tension we will continue to face between growth and the environmental impact of our operations. But the new ownership structure offers a way to harness the value that comes with responsible growth in the fight against the climate crisis.
Patagonia has been in an experiment for 50 years and plans to continue in business, operating profitably and in accordance with our values for the next 50 years and beyond.
