Patagonia’s founder transfers ownership into two entities to help fight the climate crisis

CNN Business  — 

Patagonia’s founder is transferring ownership of the company after nearly 50 years into two entities that will help fight the climate crisis.

Patagonia is a private company based in Ventura, California, that sells outdoor apparel and equipment. Yvon Chouinard founded the company in 1973.

Patagonia said in a press release on Wednesday that, effective immediately, Chouinard and his family will transfer their entire ownership stake into two newly created entities. Those entities will ensure that the company’s values will continue to be upheld — and that Patagonia’s profits are used to combat climate change.

“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,” Chouinard said in a statement Wednesday. “Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source.”

The biggest share of the company — or 98% of Patagonia’s stock — will now be under the Holdfast Collective. This nonprofit will make sure that the company’s annual profits, about $100 million per year, will be used to “protect nature and biodiversity, support thriving communities and fight the environmental crisis.”

The rest of the company’s stock will fund the newly created Patagonia Purpose Trust.

This trust will create a permanent legal structure so that the company can never deviate from Chouinard’s vision: That a for-profit business can work for the planet.

“Two years ago, the Chouinard family challenged a few of us to develop a new structure with two central goals,” said Patagonia CEO Ryan Gellert in the press release. “They wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis. 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.”