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Patagonia founder ‘goes purpose’
Patagonia is embracing a radical new corporate structure that is designed to ensure the outdoor clothing and equipment brand will continue to back environmental causes long after 83-year-old founder Yvon Chouinard dies.
Already the company – a certified B Corp – gives away 1% of sales each year. With Chouinard’s children unwilling to simply inherit the company, the usual options of selling the company or taking it public were rejected.
Instead, 100% of the company’s voting stock (2% of the total) has been transferred to the Patagonia Purpose Trust, created to protect the company’s values (its mission statement is “We’re in business to save our home planet”).
At the same time 100% of the non-voting stock (98% of the total) has been given to the Holdfast Collective, a non-profit dedicated to fighting the environmental crisis and defending nature; funding for Holdfast will come from Patagonia in the form of a dividend – expected to be in the region of $100m this year.
Why it matters
If ever there was a case of ‘putting your money where your mouth is’, this is it: Chouinard has effectively given away his company. “Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” he told The New York Times.
“Instead of ‘going public’, you could say we’re ‘going purpose’. 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” – Yvon Chouinard, founder, Patagonia.