Patagonia Founder Transfers Ownership to Environmental Trust
Patagonia, the outdoor apparel and gear company founded in 1973, is making huge waves right now, in the wake of its founder, Yvon Chouinard, announcing that he and his family were transferring their $3 billion stake dollars in the company to a trust (Patagonia Purpose Trust) created to protest the company’s environmental and sustainability values, and to a climate-focused nonprofit collective (the Holdfast Collective). CNBC’s Lora Kolodny explains that Patagonia will now “dedicate all company profits to projects and organizations that will protect wild lands and biodiversity and fight the climate crisis.” In a public letter on the Patagonia website, Chouinard wrote, “Earth is now our sole shareholder. If we have any hope of a prosperous planet, let alone a business, we’re going to have to do all we can with the resources. we have. That’s what we can do. The letter further explains that:
100% of the voting shares of the company are transferred to the Patagonia Purpose Trust, created to protect the values of the company; and 100% of the non-voting shares had been donated to the Holdfast Collective, a non-profit organization dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: every year the money we earn after reinvesting in the company will be distributed as a dividend to help fight the crisis.
CNBC’s Lora Kolodny provides more context:
The trust will get all the voting shares, or 2% of the total, and use them to create a “more permanent legal structure to enshrine Patagonia’s purpose and values.” He will be supervised by family members and close advisers. The Holdfast Collective owns all of Patagonia’s non-voting shares, which amount to 98%.
Patagonia expects to generate and give away around $100 million per year depending on the health of the business. The company now sells new and used outdoor clothing, equipment for outdoor activities like camping, fishing and climbing, and food and beverages made from sustainable sources.
As a certified B-Corp and California Benefit Corporation, Patagonia already donates one percent of its sales each year to grassroots activists, and it intends to continue to do so. Fewer than 6,000 companies worldwide are certified as B-Corp companies. They must meet strict environmental, social and governance standards and criteria established by B Labs to achieve certification.
While some critics refer to any company’s environmentally-focused initiative as “greenwashing,” other commentators praise Patagonia for being serious about promoting sustainable consumption and fighting climate change. Last year, Matthew Gannon wrote an article defending Patagonia’s commitment to reducing its environmental impact. And in response to Patagonia’s new decision to transfer ownership to the Patagonia Purpose Trust and the Holdfast Collective, some retail industry leaders are hailing the move as a real step towards sustainability that will hopefully put set the bar high for others to follow suit. Allyson Chiu of The Washington Post explains:
Some retail industry experts said the move could reverberate beyond a single company.
Chouinard has just “set a new bar for retailers,” wrote Paula Rosenblum, managing partner at retail consultancy RSR, in an email. “No greenwashing here. He put his money where his mouth was.”
No company is perfect, but it seems like Patagonia is really trying to make a positive change in the world. And I know that’s an awfully low bar, but if you compare what Patagonia is doing with what Kourtney Kardashian just announced, the two attempts to be “environmentally responsible” aren’t even on the same planet. Image reports that Kardashian just accepted a position as a “sustainability ambassador for Boohoo,” a fast fashion company that has an abysmal record of appalling working conditions and low wages for workers. And any fast mode is terrible for the environment, a fact that has been well documented, including in the 2015 educational film, The real cost, which focuses on the human and environmental costs of fast fashion. Image explains the utter hypocrisy of Boohoo having a “sustainability ambassador” in the first place, and hiring Kourtney Kardashian, in particular, for this job:
Always quick to dispel greenwashing, public relations stunts and the paradoxical nature of the fashion world, Diet Prada reminds us that “Boohoo has been named one of the least sustainable fashion brands by the environmental audit committee of the UK Parliament in 2019, and was found to be paying Leicester garment workers £3.50 an hour the following year.” The Instagram account also points out that in 2021, ShareAction reported that the brand had failed to make a significant improvement in protecting workers in its supply chain, citing “the low prices paid by Boohoo, its encouragement of price competition between suppliers and the demand for short order times.” as “factors in illegally low wage payments and poor working conditions”, as reported by The Guardian.
Following the announcement of the collaboration, many remembered the recent report that Kourtney and her sister Kim were among the top celebrities accused of violating unprecedented drought restrictions in California. Younger sister Kylie Jenner has also been in the news lately for her behavior as a ‘climate criminal’ as she couldn’t decide which private jet to take for a 17-minute flight. Jesus wept.
Fair fashion campaigner Venetia La Manna called the move the “peak of fashion greenwashing” and put the statistics on the table. “The Boohoo PLC group brings together 13 fast fashion brands. Together, they sell 207 million items each year,” she explains. “Over the next three years, the CEO of Boohoo is expected to receive a bonus equivalent to 200% of his salary.” “They pride themselves on working proactively on sustainability, despite being named one of the two least sustainable brands in the UK.”