Patagonia hands company over to Planet Earth

The founder of Patagonia has relinquished his company to Planet Earth.

In a letter, Yvon Chouinard said he was inspired by the unrelenting climate crisis to reroute nearly all of the company’s profits to environmental preservation organizations.

“Instead of ‘going public,’ you could say we’re ‘going purpose,’” Chouinard wrote in the statement titles, “Earth is now our only shareholder.”

“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.”

The $3 billion company will continue making activewear and gear, as well as operating as a for-profit business. Patagonia will use profits as needed to reinvest in the company and compensate employees, but all other wealth will be given to its new owners Holdfast Collective and Patagonia Purpose Trust.

Holdfast Collective, a nonprofit dedicated to protecting biodiversity and nature, owns 98% of Patagonia and will use all of the company’s nonvoting stock to invest in environmental protection projects.

The newly formed Patagonia Purpose Trust will own the remaining 2% of the company. It will oversee the company’s voting stock, meaning has the right to approve key company decisions and board member appointments. The trust was created to protect the company’s mission of saving the planet.

Denis Hayes, who coordinated the first Earth Day and later became the CEO of the environmentally focused Bullitt Foundation in Seattle, applauded the groundbreaking decision.

“The concept of putting this together in a new structure and being experimental and bold is exactly the kind of innovation we need to be trying,” Hayes told NBC.

In his letter, Chouinard said he never intended on becoming a businessman, even telling The New York Times he abhors wealth.

“I was in Forbes magazine listed as a billionaire, which really, really pissed me off,” he told the paper. “I don’t have $1 billion in the bank. I don’t drive Lexuses.”

Chouinard gained notoriety as a rock climber in the ’60s, but dabbled in various outdoor sports, such as ice climbing, kayaking, surfing and more.

He started Patagonia in 1973 and dedicated the company to environmentalism nearly from the get-go. In 2002, Chouinard founded 1% for the Planet, making Patagonia become the first business to commit 1% of annual sales to natural causes. Chouinard said Patagonia will continue the practice of donating the percentage to grassroots even as ownership changes hands.

“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,” Chouinard said.