A new step towards environment stewardship: Patagonia’s restructuring

I was so impressed in 2018 when I read the biography of Yvon Chouinard titled “Let my people go surfing” that I decided to publish a blog in BSL website:

The deep concern of Chouinard for the environment was already very clear in the book and illustrated in the following example: “His passion for fly-fishing lead him to fight for the dismantlement of dams, which prevent the breeding of salmons and the restoration of spawning areas”. This deep concern is also evident in most of Patagonia’s policies and the creation of 1% for the Planet: https://onepercentfortheplanet.org.

Ref: https://tinyurl.com/fz6mask3
Image credit: Fabian Marelli/GDA/AP
Ref: https://tinyurl.com/mr3ncebb

On September 14, 2022, Chouinard, aged 83, sent a letter to his 3’650 employees explaining that the Earth is now the unique stakeholder of Patagonia. He, his wife, Malinda, and their two adult children no longer own the outdoor gear and apparel company.

Instead of selling the company and distributing the money received or going public, Chouinard chose to split the capital of the company between two entities. Hold Fast Collective (98 % of capital) must collect the dividends of Patagonia, whereas Patagonia Purpose Trust (2 % of capital but 100 % of voting rights) must decide the allocation of dividends collected.

This new structure will increase dramatically the contribution of Patagonia to projects in favor of the environment: Up to date, Patagonia has spent approximately 150 million USD since its creation. With the new structure, Patagonia’s future contribution is expected to reach 100 million USD yearly.

In conclusion, the opinion of Ken Tucker, former COO of Timberland and Senior Lecturer at The Fletcher School of Law and diplomacy, Tufts University, on this impressive commitment:

“By “purpose,” Chouinard means that the company’s profits will be used to protect the planet, as opposed to enriching shareholders. I see this choice as a valiant extension of Patagonia’s years of struggle to make capitalism more compatible with planetary sustainability. It also acknowledges the difficulty of trying to balance the interests of employees, customers and shareholders with the precarious state of the planet”.

Author: Philippe Du Pasquier, President of the Board