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EARTH IS NOW OUR ONLY SHAREHOLDER.

If we have any hope of a thriving planet—much less a business—it is going to
take all of us doing what we can with the resources we have.
This is what we can do.

By Yvon Chouinard

I never wanted to be a businessman. I started as a craftsman, making climbing
gear for my friends and myself, then got into apparel. As we began to witness
the extent of global warming and ecological destruction, and our own
contribution to it, Patagonia committed to using our company to change the way
business was done. If we could do the right thing while making enough to pay the
bills, we could influence customers and other businesses, and maybe change the
system along the way.

We started with our products, using materials that caused less harm to the
environment. We gave away 1% of sales each year. We became a certified B Corp
and a California benefit corporation, writing our values into our corporate
charter so they would be preserved. More recently, in 2018, we changed the
company’s purpose to: We’re in business to save our home planet.

While we’re doing our best to address the environmental crisis, it’s not enough.
We needed to find a way to put more money into fighting the crisis while keeping
the company’s values intact.


“TRUTH BE TOLD, THERE WERE NO GOOD OPTIONS AVAILABLE. SO, WE CREATED OUR OWN.”

One option was to sell Patagonia and donate all the money. But we couldn’t be
sure a new owner would maintain our values or keep our team of people around the
world employed.

Another path was to take the company public. What a disaster that would have
been. Even public companies with good intentions are under too much pressure to
create short-term gain at the expense of long-term vitality and responsibility.

Truth be told, there were no good options available. So, we created our own.

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.

Here’s how it works: 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 funding
will come from Patagonia: Each year, the money we make after reinvesting in the
business will be distributed as a dividend to help fight the crisis.

It’s been nearly 50 years since we began our experiment in responsible business,
and we are just getting started. If we have any hope of a thriving planet—much
less a thriving business—50 years from now, it is going to take all of us doing
what we can with the resources we have. This is another way we’ve found to do
our part.

Despite its immensity, the Earth’s resources are not infinite, and it’s clear
we’ve exceeded its limits. But it’s also resilient. We can save our planet if we
commit to it.




SOME QUESTIONS AND ANSWERS


WHO OWNS PATAGONIA?

Patagonia’s new owners are the Holdfast Collective and the Patagonia Purpose
Trust. The Holdfast Collective owns 98% of the company and all of the nonvoting
stock. The Patagonia Purpose Trust owns 2% of the company and all of the voting
stock. Nonvoting stock carries economic value but not decision-making authority.
Voting stock has both economic value and decision-making authority.


WHAT IS THE HOLDFAST COLLECTIVE AND WHAT DOES IT DO?

The Holdfast Collective (Collective for short) will use every dollar received to
fight the environmental crisis, protect nature and biodiversity, and support
thriving communities, as quickly as possible. As a 501(c)(4) not-for-profit
organization, the Collective can advocate for causes and political candidates in
addition to making grants and investments in our planet.

Funding for the Collective will come from Patagonia: Each year, excess
profits—money we make after reinvesting in the business (including money we want
to save for unforeseen events, like a pandemic)—will be distributed as a
dividend to the Collective to be used for its work.


WHAT IS THE PATAGONIA PURPOSE TRUST?

The Patagonia Purpose Trust was created solely to protect our company’s values
and mission. It owns all of the voting stock of the company, which gives it the
right to approve key company decisions, like who sits on the board of directors
and what changes can be made to the company’s legal charter, including its
reason for being and B Corp commitments.

Put another way, Patagonia’s purpose is: We’re in business to save our home
planet. The Patagonia Purpose Trust ensures the company’s commitment to its
purpose forever.


DOES THIS MAKE PATAGONIA A NONPROFIT?

No. Patagonia continues to be a for-profit business, a certified B Corp and a
California benefit corporation, making the best-quality products and honoring
its obligation to preserve the financial health of the company while always
considering the impact our business has on employees, customers and
communities—and on the health and vitality of the natural world.

Our impact in the world comes from operating as a for-profit business. We will
continue to serve as a beacon for the entire business community by proving that
purpose and profits are inextricably linked.


WHO RUNS THE BUSINESS GOING FORWARD?

Ryan Gellert as CEO and the leadership team, together with all of Patagonia’s
employees, will continue to run the business under the direction of the board of
directors. What’s changed now is that the company has additional stewardship
from the Patagonia Purpose Trust.


WILL PATAGONIA AS A COMPANY CONTINUE TO DONATE 1% OF SALES FOR THE PLANET?

Yes. Patagonia will continue to donate 1% of sales each year to grassroots
environmental nonprofits. This commitment is part of our business charter, which
means it now can’t be changed without the approval of the Patagonia Purpose
Trust.


WHAT WILL THE FOUNDERS DO NOW?

The Chouinard family will guide the Patagonia Purpose Trust, electing and
overseeing its leadership. Family members will continue to sit on Patagonia’s
board, along with Kris Tompkins, Dan Emmett, Dr. Ayana Elizabeth Johnson,
Charles Conn (chair of the board), and Ryan Gellert, our CEO. The family will
also guide the philanthropic work performed by the Holdfast Collective.


WHAT DOES THIS MEAN FOR PATAGONIA EMPLOYEES?

Employees are at the core of Patagonia’s success and this new ownership
structure is an irrevocable commitment to protect the purpose and values that
attracted all of us to the company in the first place. We will keep doing all of
the great things that built Patagonia, and the company will keep doing its best
to be a great employer.


WILL PATAGONIA JUST MAX OUT SALES SO IT CAN GIVE AWAY MORE MONEY EACH YEAR?

No. This is not an excuse to ignore the real tension we’ll continue to face
between growth and the environmental impact of our operations. But the new
ownership structure provides a way to put the value that comes with responsible
growth to work fighting the climate crisis.

Patagonia is 50 years into an experiment, and plans to stay in business,
operating profitably in line with our values, for the next 50 years and beyond.


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