The brand is notable for its sustainability efforts, including guaranteeing clothes for life, and an advert titled “Don’t buy this jacket”, aimed at getting shoppers to consider environmental costs.
Patagonia’s website now states “Earth is now our only shareholder” following the development. The company produces leather workboots for the North American market but is best known for sports and lifestyle apparel.
The Chouinard family has transferred all ownership to two new entities, with The Patagonia Purpose Trust, led by the family, remaining the company’s controlling shareholder but owning just 2% of its total stock.
The trust will guide the philanthropy of the Holdfast Collective, a U.S. charity “dedicated to fighting the environmental crisis”, which now owns all of the non-voting stock, roughly the remaining 98%.
The brand’s sales were around US$1.5 billion this year, while Chouinard is valued at a net worth of around US$1.2 billion.
The founder has claimed that profits to be donated to fight climate change will amount to around US$100m a year, depending on company performance.
He said: “Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source.”
Chouinard has initially considered taking Patagonia public or selling the company and donating the profits, but both options would mean giving up control.
“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 said.
Source: BBC News