We all know and love the company Patagonia, which was founded in 1973 by Yvon Chouinard. This company quickly became an American classic when it comes to outdoor clothing, specifically for outdoor sports. Chouinard catered this company to people like him, as he is a rock climber, environmentalist, and philanthropist.
Recently the Chouinard family has made the decision to donate the company to saving the planet, now what does that really mean for the future of Patagonia?
Patagonia has historically been a privately traded company, and in efforts of maintaining the company’s integrity and morals the Chouinard family decided that public trading is not something that they wanted to do. Rather, they broke the company’s assets into two trusts. The Patagonia Purpose Trust contains 2% of the company and that is meant to maintain the company's values. The Holdfast Collective Trust contains the assets of the remaining 98% of the company and the purpose of this trust is “fighting the environmental crisis and defending nature,” which Yvon Chouinard wrote in a statement regarding his decision. This fund will donate roughly 100 million dollars in annual profit.
Some are saying that Patagonia made this decision as a way to get out of paying millions in taxes. The Holdfast fund is a 501(c)(4) which allows the Chouinard family to maintain control of the company, but exempts that large share from tax deductions. This protects them from potential tax hits which could have been hundreds of millions of dollars.
The family has released multiple statements about how this move was not about financial gain, but rather their way of contributing some of their wealth to the climate crisis.
This decision has proved to be a smart marketing strategy, as Patagonia is now known as having Earth as their only shareholder, which is stated on the company’s website. Patagonia’s target market is individuals who are extremely involved in the outdoors, so this change that they made will make customers inherently feel better about purchasing from the company as their money is going directly to climate change funds.
Any decision this large is bound to spark controversy, but we can only hope that this new trust will do as it says and that it will have a positive impact on the world we live in. Large companies have managed to become the climate’s largest rival. As awareness for climate change increases, hopefully more billionaires such as Yvon Chouinard make the decision to share their wealth with the world that they live in.
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