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"Earth is now our only shareholder" Patagonia and its ownership recast will shake the business world

In this historical moment, we have assisted to less examples of visionary entrepreneurs guiding their enterprises through accelerated growth and development than in the past. We are also experiencing a circumscribed drawback for some investors affecting ESG in the Americas [1]. We already talked about the Danone CEO’ case that sparked much contrast among investors, leading to its sacking. [2] Compared to the last century, capitalism has radically changed its approaches in a faster and much more high tech world. Now, when I first read what Yvon Chouinard has done, I was indeed very surprised. The owner and frontman of Patagonia, an American apparel and fashion company, took a decision shaping future generations: Patagonia shares would have been sold to the Patagonia Purpose Trust and Holdfast Collective, both in charge invest the company’s revenues in sustainable activities – as explained by the New York Times [3]. This doesn’t mean in any way that the company would stop looking for a pure business is business activity but rather that it will focus on a specific business model. Something new, even revolutionary.

Cases as such inevitably make us think about better corporate governance practices. Even though the partial devolution of revenues for a company’s purpose is something rather ethical or responsible than sustainable [4], such pratices allow us for better thinking anyway.

Patagonia’s choice is in line with the OECD Principles of Corporate Governance, and much specifically with the Fair Treatment of Shareholders principle [5] that the OECD included in its Guidelines for multinational enterprises back in 1976 [6]. The choice of assigning the controlling shares to a trust is a genuine move to ensure that the company will keep on the pathway of sustainability: it gives it the opportunity to invest and keep operations working. It calls up future generations and the Planet itself as stakeholders. And it enforces a structured mechanism of shareholders’ protection, even for the minorities. This alltogether is, of course, a set of sustainable corporate governance practices.

The reasons shared by Chouinard in his open and public statement are also very convincing:

“While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact. One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.

Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.

Truth be told, there were no good options available. So, we created our own. Instead of “going public,” you could say we’re “going purpose.” Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.

Here’s how it works: 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”.

Source: Patagonia website [7]

Finally, thanks to his leadership, Patagonia has been pledging 1% of its sales revenues to the preservation and restoration of the natural environment. The initiative is called “1% for the Planet” and it’s a sharp way to show the entire world that sustainability is not a bubble, that some virtuous companies are paving the way towards a new business model. To see that this change is coming from the industry that is responsible of the very high amount of CO2 emissions is even more encouraging. [8] I believe this is very encouraging for future generations. In a nutshell, I warmly recommend everyone to dive in that initiative. [9]


[1] Horowitz J. (2022) ‘Investing ethically won’t buy protection in this market’. URL:

[2] Morello M. (2021) ‘Sustainability cannot go ahead without governance – the Danone’s case shows why’. URL:

[3] New York Times (2022) ‘Billionaire no more: Patagonia’s founder gives away the company’. URL:

[4] Morello M. (2020) ‘Sostenibilità: l’approccio istituzionale’. URL:

[5] OECD (2015), G20/OECD Principles of Corporate Governance, OECD Publishing, Paris.

[6] OECD (2011), OECD Guidelines for Multinational Enterprises, OECD Publishing.

[7] Chouinard Y. (2022) ‘Earth is now our only shareholder’. URL:

[8] The World Bank (2019) ‘How Much Do Our Wardrobes Cost to the Environment?’. URL:

[9] ‘1% for the Planet’. URL:

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