'Earth is now our only shareholder': Patagonia owner gives away $3 bn company

US outdoor clothing retailer Patagonia has said it has given the $3 billion worth company to planet Earth with the founder Yvon Chouinard stating “Earth is now our only shareholder”.

“Hey, friends, we just gave our company to planet Earth. OK, it’s more nuanced than that, but we’re closed today to celebrate this new plan to save our one and only home. We’ll be back online tomorrow,” the company said on its Twitter account on Thursday (September 15).

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In a letter posted on its website, 83-year-old Chouinard said, “While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact.”

Explaining the options he had, he wrote, “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.

“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. Truth be told, there were no good options available. So, we created our own.”

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According to him, “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 non-profit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”

“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,” he said.

Patagonia said new owners The Holdfast Collective owns 98% of the company and all of the nonvoting stock. The Patagonia Purpose Trust owns 2% of the company and all of the voting stock. The nonvoting stock carries economic value but not decision-making authority. The voting stock has both economic value and decision-making authority.

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

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“The Chouinard family will guide the Patagonia Purpose Trust, electing and overseeing its leadership… Patagonia is 50 years into an experiment, and plans to stay in business, operating profitably in line with our values, for the next 50 years and beyond,” the company said.

According to the company, since 1985, Patagonia has pledged 1% of sales to the preservation and restoration of the natural environment, and it has awarded over $140 million in cash and in-kind donations to domestic and international grassroots environmental groups making a difference in their local communities.