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Patagonia founder transfers ownership to environmental trust [1]

['Jennifer Sandlin']

Date: 2022-09-16

Patagonia—the outdoor clothing and gear company founded in 1973—is making huge waves at the moment, in the wake of its founder, Yvon Chouinard, announcing that he and his family are transferring their $3 billion ownership stake in the company to a trust (Patagonia Purpose Trust) created to protest the firm's environmental and sustainability values, and to a climate-focused nonprofit collective (the Holdfast Collective). Lora Kolodny at CNBC explains that Patagonia will now be "dedicating all profits from the company to projects and organizations that will protect wild land and biodiversity and fight the climate crisis." In a public letter on the Patagonia website, Chouinard wrote, "Earth is now our only shareholder. If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have. This is what we can do." The letter further explains that:

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. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.

Lora Kolodny at CNBC provides more context:

The trust will get all the voting stock, which is 2% of the total, and will use it to create a "more permanent legal structure to enshrine Patagonia's purpose and values." It will be overseen by members of the family and close advisors. The Holdfast Collective owns all the non-voting stock of Patagonia, which amounts to 98%. Patagonia expects to generate and donate about $100 million annually depending on the health of the business. The company now sells new and used outdoor apparel, gear 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 was already donating one percent of its sales each year to grassroots activists, and it intends to keep doing so. Fewer than 6,000 companies around the world are certified as B-Corp businesses. They have to meet strict environmental, social and governance standards and benchmarks set by B Labs to gain certification.

While some critics label any environmentally-focused move by any corporation 'greenwashing,' other commentators are praising Patagonia for being serious about promoting sustainable consumption and combating climate change. Last year, Matthew Gannon wrote a piece defending Patagonia's commitment to reducing its environmental impact. And in reaction to Patagonia's new decision to transfer ownership to the Patagonia Purpose Trust and the Holdfast Collective, some retail industry leaders are praising the move as a real step towards sustainability that will hopefully set the bar for others to follow suit. Allyson Chiu at 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," 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."

No company is perfect, but it does seem that Patagonia is really trying to make a positive change in the world. And I know this is a terribly 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 "sustainability ambassador for Boohoo," a fast-fashion company that has a horrendous record of awful working conditions and low wages for workers. And all fast fashion is terrible for the environment, a fact that has been well documented, including in the 2015 educational film, The True Cost, which focuses on the human and environmental costs of fast fashion. Image explains the complete hypocrisy of Boohoo having a "sustainability ambassador" in the first place, and hiring Kourtney Kardashian, in particular, for that job:

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