The founder of Patagonia, billionaire Yvon Chouinard, has handed his company over to a charitable trust… for free.
From now on, the popular outdoor fashion brand Patagonia — already an established activist brand — will be managed by a charitable trust and any profit that is not reinvested into the company will go towards the fight against climate change.
Founded in 1973, the brand has been dedicated to environmental causes since the 80s, pledging 1% of its income to the “preservation and restoration of the natural environment”. In 2002, the brand formalized this arrangement by creating a non-profit organization, “1% for the planet” — and encouraged other companies to do the same.
In 2012, Patagonia was certified with B Corp status and, just a year earlier, was registered as a California Benefit Corporation — a status which allowed it to consider “the triple bottom line of profit, people, and planet when making business decisions.”
In 2018, the brand’s company purpose was altered to reflect an even stronger environmentalist sentiment — “We’re in the business to save our home planet.”
This latest move of handing the company over to a charitable organization was motivated by a desire to do even more for the environment while preserving the Patagonia brand. A complete sale was initially considered, but Chouinard wanted to preserve the brand’s values and keep team members employed — and this could not be guaranteed once control was handed over.
They also decided against taking the company public because, in their view, even businesses with good intentions are “under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.”
To that end, they created their own solution to preserve Patagonia’s brand values while directing revenue towards environmental causes. “100% of the company’s voting stock” was transferred to the Patagonia Purpose Trust — the charitable organization that was created “to protect the company’s values”
On top of this, 100% of the non-voting stock was then given to the Holdfast Collective, “a nonprofit dedicated to fighting the environmental crisis and defending nature.”
From now on, the money that Patagonia makes that is not reinvested into the brand will be “distributed as a dividend to help fight the crisis.”
The brand’s homepage now contains a message from founder Chouinard with a statement certifying that “Earth is now our only shareholder.”
The move creates a new standard for activist brands. It cements Patagonia’s status as an authentically environmentalist brand that is committed to fighting climate change rather than simply greenwashing its brand identity in order to connect with consumers.
Chouinard has previously said that he was “horrified to be seen as a billionaire” and “never wanted to be a businessman” — but these traits have clearly influenced the hugely successful Patagonia brand and helped direct it in building a brand that is seen as authentic, sustainable, and ethical.
Indeed, Patagonia’s marketing and branding campaigns have often focused on environmental causes and encouraged consumers to “buy only what they need”. Its 2011 Black Friday campaign “Don’t Buy This Jacket” had an intentionally anti-consumerist message, urging those reading to not “buy what they don’t need” and to “think twice before you buy anything.”
The brand’s common threads initiative was launched to encourage customers to buy fewer items and use them for longer. It included the five Rs:
WE make useful gear that lasts a long time
YOU don’t buy what you don’t need
WE help you repair your Patagonia gear
YOU pledge to fix what’s broken
WE help find a home for Patagonia gear
you no longer need
YOU sell or pass it on*
WE will take back your Patagonia gear
that is worn out
YOU pledge to keep your stuff out of
the landfill and incinerator
TOGETHER we reimagine a world where we take only what nature can replace.
While critics have argued that these very tactics have actually increased the brand's prominence and encouraged more spending, those consumers that do spend certainly have to be prepared to pay the price — as Patagonia products are priced well above many other fashion brands. For example, a typical Patagonia puffer jacket costs upwards of $200.
Patagonia has clarified that the high cost of its products means its clothes are “meant to last a lifetime” and allows the brand to “invest in making sure we use the least water, the least dangerous chemistries and dyes, and use the least carbon in the production of our products.”
Whether or not all consumers genuinely do buy Patagonia products and use them for a lifetime rather than throwing them out when fashion trends move on, the brand is undoubtedly doing a lot to ensure that its environmental impact is reduced. And, to be fair, this is much, much more than can be said for many fast-fashion brands that actively encourage consumption, while also producing their products in ways that are harmful to the environment.
Cover image credit: Unsplash