What do you do when you’re a billionaire philanthropist in possession of one of the most reputable and valuable outdoor brands on the planet and it’s time to step down? You want to see your company’s good work not just continue, but channel everything the company does—and earns—into making the world a better place. You could sell the company for billions, and dedicate all the profits to philanthropic goals. But you’re a maverick in the corporate world, and you don’t trust the market or potential new owners to preserve your values or maintain employment and working conditions? What’s your move? If you’re Yvon Chouinard, and your company is Patagonia, you just give it away.
And, Thursday, that’s exactly what he did. In a letter to the company’s loyal customer base and to its worldwide employees, Chouinard announced that he and his family have handed over ownership of Patagonia to a pair of non-profit entities — the Patagonia Purpose Trust and the Holdfast Collective.
“I never wanted to be a businessman. I started as a craftsman, making climbing gear for my friends and myself, then got into apparel,” Chouinard wrote. “As we began to witness the extent of global warming and ecological destruction, and our own contribution to it, Patagonia committed to using our company to change the way business was done. If we could do the right thing while making enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way.”
For years, Chouinard’s company has been a leader in global conservation, taking the vanguard role in fighting climate change and unabashedly challenging both political and corporate norms in the process. Thursday’s announcement is just another example of how Chouinard and Patagonia continue to eschew everyday business practices by putting the health of the planet above all.
Or, as Chouinard reminded his customers and his employees, “We’re in business to save our home planet.”
So the new owners — the two non-profit corporations — will be bound by the company’s norms, not those of corporate America. The Holdfast Collective, a non-profit dedicated to addressing the environmental crisis and defending nature, will own 98 percent of the company and all of the non-voting stock. The Patagonia Purpose Trust is a non-profit created for the sole purpose of protecting the company’s values and its mission. It only owns 2 percent of the company, but it owns all of the company’s voting stock, which gives it the power to approve all key company decisions, choose a board of directors and approve any changes made to Patagonia.
“It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have,” Chouinard said. “As the business leader I never wanted to be, I am doing my part. 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. I am dead serious about saving this planet.”
It’s not as if anglers, climbers, skiers and boarders, hikers, mountain bikers, and other outdoor enthusiasts didn’t already have plenty of reasons to buy gear from Patagonia—the company has, for decades, made some of the most reliable, technical, high-performance gear in the industry. It has coupled that with iron-clad warranties and stellar customer service. More importantly, Patagonia has been one of the most earnest and steadfast corporate defenders of the environment, repeatedly putting its money, its industry influence, and its image on the line by taking an activist role in defending public lands, wild fish and wild places. Of late, it has been laser-focused on climate change.
But now all those loyal Patagonia customers, and quite possibly hordes of soon-to-be Patagonia newcomers, have a new reason to purchase from the company — its sole mission is to literally save the world.
“I was in Forbes magazine listed as a billionaire, which really, really pissed me off,” Chouinard told The New York Times in an exclusive interview. “I don’t have $1 billion in the bank. I don’t drive Lexuses.”
But he did own Patagonia, its stellar brand and all the customer loyalty that accompanies it. So, leave it to Chouinard to craft a succession plan that leaves everything in the hands of nonprofits that will never, ever bowl without the bumpers where the environment is concerned.
“One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed,” he wrote to his customers and employees. “Another path was to take the company public. What a disaster that would have been. 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.”
Patagonia CEO Ryan Gellert and his leadership team will remain in control of the day-to-day at the company, under the supervision of its board of directors. But now, the company will operate under the additional stewardship of the Patagonia Purpose Trust.
“It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started,” Chouinard, now 83, wrote. “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. This is another way we’ve found to do our part.
“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.”