Three years in, Patagonia says its radical ownership model is paying off for the planet

"Three years ago, Patagonia's founder Yvon Chouinard made an unprecedented move: he and his family gave away the company. Instead of selling the multibillion-dollar retailer or taking it public, they created a new trust and nonprofit that would use the company's profits to fight climate change and protect nature. In a new report that looks at company's impact over its 52-year history, Patagonia shares how the change has amplified its environmental work."

"Each year, as much as 98% of its profits can now be spent on climate action, after subtracting any funds needed for reinvestment in the business. (The company hasn't shared exactly how much cash goes back to the business itself, but it needs some funds for building retail stores, buying inventory, and having some money in a bank to weather unexpected events like a pandemic.)"

Yvon Chouinard and his family gave Patagonia to a new trust and nonprofit to use the company's profits to fight climate change and protect nature. The company's daily operations remained largely unchanged while funding for environmental work increased significantly. Patagonia pioneered an "Earth tax" in the 1980s, giving 1% of profits to environmental causes, later formalized as 1% for the Planet. Under the new ownership, up to 98% of annual profits can be spent on climate action after reinvestment needs are met. Two percent of profits fund a purpose trust to lock in the company's environmental values. Since late 2022, Patagonia has given $180 million to the Holdfast Collective, a group of five nonprofit trusts that fund environmental work. The company retains funds for stores, inventory, and reserves to weather unexpected events.

Read at Fast Company