One of America’s favorite experimental businesses has taken a bold step forward in protecting our planet. Stepping onto the road–or more so, trail– less traveled, the founder and former owner of Patagonia, Yvon Chouinard, announced that the company would hereby be donating its profits to a specially-formed collective and a nonprofit charity. In a characteristic fashion on their website, Chouinard states in a letter, “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.”

Rather than selling the company to an outside source or going public (by selling shares in the stock market), which Chouinard recognizes would be “disastrous,” Patagonia and its executives established the Patagonia Purpose Trust, which will receive all of the voting stock of the company, which is about two percent of profits and will have decision-making authority. This was done to ensure that the values and core purposes of Patagonia will be upheld indefinitely, which could not have been guaranteed if the ownership of the business was transferred.

The Holdfast Collective is a nonprofit charity that will receive the other ninety-eight percent of the company’s profits to “fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible,” according to Patagonia’s website. Since it is a nonprofit organization, the Holdfast Collective will have footing to endorse political candidates, advocate for causes (relating to, but not limited to, those regarding environmentalism and climate concern), and put money into sources that directly support the company’s mission and direction.

The company states that ownership will remain the same, under its CEO, Ryan Gellert, and all current employees will be able to stay with the company. This is another reason they decided to not sell the company: it would have created an unwanted tumultuous time of uncertainty for all of their current, beloved employees. Patagonia is still a for-profit company, which is how they can ensure their employees are paid, and profits are made to be put into their newfound collectives, to help save the planet.

Patagonia was officially branded as a company in 1973, in Ventura, California, after undergoing significant developments. From its very origin, before it even took its modern name, the company had been making environmentally-conscious decisions and showing ecological consideration in business choices. Founded as Chouinard Equipment, the business got its start by selling climbing equipment, and eventually pulled a majority of its products off the shelves after realizing that the equipment was doing damage to natural rocks and the natural areas that climbers were exploring. The owners quickly got to work developing new technology in chocks and pitons and other climbing tools, ones that would not damage the environment. These products quickly became highly in demand, and shortly thereafter, the name Patagonia was adopted for the brand.

On Patagonia’s website, you can find Chouinard’s official statement as well as many thoroughly-answered FAQs regarding the change.
Rather than wait for an arbitrary milestone in the company’s timeline, Patagonia announced this change in business after 49 years as a company. Patagonia continues to set the example of ecoactivism, by insisting that the prioritization of the health of our planet could not wait another minute, much less a year.

Article by Gisele Ortega