The Patagonia brand has been manufacturing clothing for adventurers since the 1970s. Their pants, vests, and jackets are designed for rivers and mountaintops, yet are more commonly seen on the streets of New York, Chicago and Los Angeles. Before the tracksuit became a well-regarded office attire, Patagonia clothing was the top choice for casual Wall Street Fridays.
The company is now making global headlines after its founder, Yvon Chouinard, a rock climber-turned-billionaire, his wife and two adult children transferred ownership of the company to a trust and group of non-profits that will use the benefit generated by a company valued at €3 billion to fight climate change, in a move first reported by The New York Times. “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,” wrote Chouinard in a letter on the company website. The announcement has been widely applauded as innovative in American philanthropy sectors, and it comes at a time when great fortunes are being subjected to greater scrutiny.
Chouinard, 83, says he never unexpected to become a millionaire. “I never wanted to be a businessman,” he writes. The son of a French-Canadian handyman who moved to the US, he started out as a craftsman making gear for his friends and then moved on to apparel. Over time, the brand became part of the identity of fans of outdoor life who are concerned about the deterioration of the environment. The company promoted a philosophy of consumption that broke with the main lines of capitalism. Unlike fast fashion, the brand invites its buyers to use its garments until these reach the end of their useful life. Patagonia stores do not open on Black Friday, a day when American consumerism is given free rein. They also allocate, and will continue to do so, 1% of their sales to environmental organizations. Despite this, the company has enjoyed phenomenal sales of more than $1 billion annually.
Chouinard, his wife and the couple’s two adult children, Fletcher and Claire, have transferred the company and fortune to two organizations: the Patagonia Purpose Trust, which will hold 2% of the company’s stock, and a non-profit organization for-profit company Holdfast Collective, which will own 98%. These were created to use the $100 million that the company earns annually in profits to fight the environmental crisis and defend nature around the world.
Located in the city of Ventura, California, north of Los Angeles, Patagonia will remain a for-profit brand. The trust obliges the members of the Chouinard family to ensure that the resources are being used in a good way. In his letter, the founder defends his choice. “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.”
“The Earth is now our only shareholder,” he writes.