Patagonia’s move comes as more companies try to give Mother Nature legal standing.
The $3 billion Californian retailer pledged to give away all future profits to fight the global climate crisis, to show how “capitalism can work for
the planet.”
Founder and adventure enthusiast Yvon Chouinard started making climbing gear for himself and his friends in 1973 out of Ventura, California. Today, the business sells more than $1 billion worth of goods annually worldwide.
The certified B Corp already gives away 1% of sales each year as part of its company purpose to save the planet; under the new structure, it expects to pay out around $100 million a year as a dividend.
Chouinard, his wife and two children transferred all their stock to two new entities. They gave 2% to the Patagonia Purpose Trust, designed to protect the company’s values, and the remaining 98% to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.
The family will sit on the trust’s board of directors and still oversee the direction of the business. Chouinard said in a statement that every dollar not reinvested back into Patagonia would be distributed as dividends to protect the planet.
The billionaire entrepreneur said, “Instead of ‘going public,’ you could say we’re ‘going purpose.’ Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of
all wealth.”
The Chouinard family follows the example set by the Bosch family. Since 1964, the descendants of German industrialist Robert Bosch have transferred ownership of the engineering and technology company almost entirely to nonprofit entities.
Today, 94% of Robert Bosch GmbH’s share capital is held by a charitable foundation that carries out and finances social, cultural and scientific projects. The rest of the shares are held by Robert Bosch GmbH and a corporation owned by the Bosch family.
Patagonia’s move comes as more companies try to give Mother Nature legal standing. Edinburgh-based beauty seller Faith In Nature recently appointed a director to represent nature on its board. The company said it was the first to give nature a formal vote on corporate decisions that could impact the planet.
