Yvon Chouinard, the billionaire founder of the outdoor apparel brand Patagonia, said on Wednesday he is giving away the company to a trust that will use its profit to fight the climate crisis.
Instead of selling the company or taking it public, Chouinard, who became famous for alpine climbs in Yosemite National Park and has a net worth of $1.2 billion, is transferring his family's ownership of the company to a trust and a non-profit organization.
"Earth is now our only shareholder," a statement from the company said. "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."
In addition, profits that aren't reinvested back into the business will be distributed by Patagonia as a dividend to the Holdfast Collective to help address climate change, according to a news release. The company projects that it will pay out an annual dividend of about $100 million - an amount that could change depending on the health of the business.
"It's been a half-century since we began our experiment in responsible business," Chouinard, 83, said in the release. "If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source."
"I am dead serious about saving this planet," he added.
While rich individuals often make financial contributions to causes, the New York Times said the structure of the Patagonia founder's action meant he and his family would get no financial benefit - and in fact would face a tax bill from the donation.
The decision, which was first reported by the New York Times, reflects Chouinard's maverick approach to tying his business to conservation and political activism over his roughly five-decade career. The company lambasted President Donald Trump and members of his administration for scaling back public land protections, and even sued Trump over his move to cut Utah's Bears Ears National Monument by 85 percent.
Several of Chouinard's allies said that his move reflected his long-standing approach to environmentalism.
"It's kind of crazy to say it doesn't surprise me," said Josh Ewing, who worked with Patagonia to expand Bears Ears' boundaries while heading the nonprofit Friends of Cedar Mesa.
"I've had the opportunity to appreciate the just unique and unprecedented leadership that the Chouinards, as well as staff at Patagonia, have put into conservation and climate leadership," said Ewing, who now directs the Rural Climate Partnership.
Always for activism
In 2021, Patagonia announced it would no longer sell its merchandise at a popular Wyoming ski resort after one of the owners hosted a fundraiser featuring Rep. Marjorie Taylor Greene (Ga.) and other Republicans who support Trump.
The company has also pursued more traditional forms of activism. Beyond making products with materials that cause less harm to the environment, for years Patagonia has donated 1 percent of its sales largely to grass-roots environmental nonprofits, and will continue to do so.
Patagonia funded a 2014 documentary film called "DamNation," which aimed to mobilize support for demolishing dams in order to revive wild fish populations.
Chouinard has also supported groups that work directly on elections, such as the League of Conservation Voters. LCV President Gene Karpinski said the retail magnate backed the group's efforts to register and turn out young voters and voters of color.
Chouinard has "been a model for building a sustainable business and now he's a model for doing sustainable giving," Karpinski said. "From the beginning, his company had a vision for being best in class as a sustainable company, and now he's ensuring that will be the path going forward."
In Wednesday's letter, Chouinard explained that selling Patagonia or going public were both flawed options. While the company could have been sold and all the profits donated, there wasn't a guarantee that a new owner would maintain the business's values or ensure that all of its workers stayed employed. And taking the company public, Chouinard wrote, would have been a "disaster."
"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," he wrote.
Choosing to give away Patagonia is the latest step in the company's lengthy experiment in responsible business, Chouinard wrote.
"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," he wrote. "This is another way we've found to do our part."
Ryan Gellert, Patagonia's CEO, said in a statement that the Chouinard family "challenged" him and a few others two years ago to develop a new structure for the company with two central goals: "They wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis," he said. "We believe this new structure delivers on both and we hope it will inspire a new way of doing business that puts people and planet first."
Under the new arrangement, the Chouinard family will guide the Patagonia Purpose Trust and the philanthropic work carried out by the Holdfast Collective, according to the news release. The company's leadership also will not change. Gellert will continue to serve as the company's CEO while the Chouinard family remains on Patagonia's board.
To mark the occasion, Patagonia tweeted, "We're closed today to celebrate this new plan to save our one and only home. We'll be back online tomorrow." On Wednesday night, staff attended a "party for the planet" at the company's campus in Ventura, Calif., a spokesperson said.
Members of Patagonia's board praised the transfer of ownership. "Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty," Charles Conn, chair of the board, said in a statement.
"They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now."
Some retail industry experts said the move could reverberate beyond a single company. Chouinard has "just set a new bar for retailers," Paula Rosenblum, managing partner of at the retail consulting firm RSR, wrote in an email. "No greenwashing here. He put his money where his mouth was."