Patagonia is donating all its shares away to its own charity foundation. The founder of the outdoor brand is putting all capital into two funds, so that profits will go entirely to social and environmental projects.
Wealth for the planet
Patagonia’s profits will soon go entirely to ecological and social causes. Founder Yvon Chouinard and the board of directors are transferring all shares of the company, which has been privately owned since its foundation in 1973, into two new entities: the Patagonia Purpose Trust and the Holdfast Collective. The aim is to turn capitalism on its head, by making Earth the sole shareholder, board chairman Charles Conn explained.
The Trust will get all the voting shares of the outdoor brand, so the Trust’s overseers can ensure that the company’s actions are always in line with its stated environmental goals and social values. The Collective, in turn, contains all non-voting shares. Through the Collective, all profits that are not reinvested in Patagonia or its value chain, will go to mainly environmental projects. It is estimated that the supported projects will receive some 100 million dollars a year, Edie reports.
“If we have any hope of a thriving planet 50 years from now, it demands all of us doing everything we can with the resources we have. Instead of extracting value from nature and transforming it into wealth, we use the wealth Patagonia creates to protect the source”, Chouinard explains.
No ‘woke’ capitalism
Chairman Conn calls on other companies to follow suit, in an open letter in Fortune. Although as an investor and CEO himself, he owes much to shareholder capitalism, everyone sees that it cannot continue like this. “We have subsidised buoyant shareholder returns by fraying the fabric of our societies and using up the planet we live on”, he wrote.
A few years ago, Patagonia therefore officially changed its mission: the company’s mission is now to save the home planet. The brand opts for “purpose capitalism” and has since been experimenting with innovative business models such as reusing old jackets, second-hand and rental.
“This is not ‘woke’ capitalism”, Conn argues. “It is the future of business if we want to build a better world for our children and all other creatures.” “Over time, the market will continue to work and responsible, purpose-led companies will attract more investment, better employees and deeper customer loyalty.”