Patagonia is unique when it comes to handling its climate impact. The outdoor clothing company has always been relatively concerned about sustainability. For years, it’s been donating 1% of its annual income to help the climate, and in 2018 it put climate goals into its company charter. Back in 2015, it even ran an ad called “Don’t Buy This Jacket,” which essentially asked consumers to not buy clothes they didn’t need.
Now, founder Yvon Chouinard is doing something different to help the planet out – he’s giving the company away to a climate nonprofit.
“Here’s how it works,” Chouinard said in an open letter announcing the shift. “100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.”
The idea is simple in that the company isn’t going to be for-profit anymore, instead working to fund the nonprofit. But it’s magnificently elegant. The company could have been sold off, with the profits donated to a nonprofit, but Chouinard wasn’t convinced a buyer would have treated the environment well with the company. And it could have gone public, but again, he said that short-term gain wasn’t the goal here, and that’s what public companies are after.
“Instead of ‘going public,’ you could say we’re ‘going purpose,’” he said. “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.”