The Patagonia Purpose Trust and the Holdfast Collective are two new companies that the US-based adventure clothing company is establishing today (Sept. 14) to hold its stock.
All of the company’s shares with voting rights will be held by the Trust. Voting will take place to make sure that the company’s actions are in line with its stated commitments on environmental and social impact.
All of the non-voting stock will be held by The Collective in the meantime. It will be used to fund social and environmental projects with any money Patagonia makes that is not planned for further investment in the company or its value chain. Patagonia has listed the preservation and restoration of ecology and biodiversity as priority subjects.
The initiatives funded by the Collective are anticipated to receive a total of about $100 million annually.
Yvon Chouinard established the 1% for the Planet program while running Patagonia, and he invited Patagonia to join as the first company. More than 5,000 businesses have now used the strategy after 20 years. According to Chouinard, the decision to take things a step further by establishing the Trust and Collective today was made in order to portray Earth as the company’s sole stakeholder. He added that it signaled the company’s purposeful transition away from going public.
He stated that everyone of us must do our maximum effort with the available resources if we are to have any chance of maintaining a healthy world in 50 years. I’m playing my part as the type of company leader I never intended to be. Instead of taking value from nature and turning it into profit, Patagonia uses its fortune to safeguard the source.
The company’s two employees, Claire and Fletcher Chouinard, will stay on as employees and be in charge of monitoring the Collective’s strategic choices.
Dr. Ayana Elizabeth Johnson, a marine biologist and member of Patagonia’s board, claimed that if the climate and environmental crises are to be resolved and social issues are to be addressed, enterprises cannot continue to follow the current economic model. She has urged other businesses to take action and stop making money for their shareholders in favor of sponsoring initiatives to address humanity’s most urgent problems.