With a net worth of US$1.2 billion (AU$1.7 billion) and one of the most universally beloved brands in outdoor apparel, Yvon Chouinard has forged a legacy most fashion entrepreneurs can only dream of. But now, at the still-spry age of 83, the Patagonia founder will give away the keys to the house that Nano Puff jackets built in service of the fight against climate change – one, overall, that the fashion industry is still losing.
In a statement published earlier today on Patagonia Works, the eponymous brand’s holding company, Chouinard announced that his family’s ownership stake would be transferred in totality to two newly created entities: the Patagonia Purpose Trust and Holdfast Collective.
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“It’s been a half-century since we began our experiment in responsible business,” Chouinard writes.
“Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder.”
In plain English? Every cent that isn’t reinvested back into Patagonia will now go towards the aforementioned trust and collective.
In practical terms, Patagonia’s newly minted beneficiaries serve different yet complementary purposes. The Purpose Trust owns all of the company’s voting stock (2% of the total amount), arming it with a “more permanent legal structure” that safeguards Chouinard’s vision of environmentally and socially conscious business.
Meanwhile, the remaining 98% of Patagonia’s non-voting stock has been transferred into the Holdfast Collective, with all profits not reinvested into the company being paid out as an annual dividend of US$100 million (approximately). Such a distribution will give the collective a robust war chest to work with, as they pursue various remits including biodiversity protection, climate action and engagement with vulnerable communities.
Despite being a major strategic shift, the creation of the collective and trust does not affect Patagonia’s day-to-day. The news hasn’t been accompanied by any shakeups of the company’s Board of Directors, and – from what can be gleaned by observers looking in – Chouinard’s move has met with seemingly unanimous support.
“Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty,” says Charles Conn, Patagonia’s Chair of Board.
“We want to build a better world, and that future starts with what Yvon is doing now.”
