Is Patagonia ethical?

Hundreds of customers of outdoor clothing company Patagonia may have had their bank details stolen after hackers breached its Australian website.

Patagonia, whose owners just gave away their full stake in the company to fight climate change, is “in business to save our home planet.”

The majority of Patagonia is now owned by the nonprofit Holdfast Collective, which will give $100 million annually to combat climate change.

Over the years, Patagonia has evolved significantly since its founding by Yvon Chouinard. Two years ago, the company transferred ownership to the Patagonia Purpose Trust and the Holdfast Collective, marking a pivotal moment in its history.

In a new report that looks at the company’s impact over its 52-year history, Patagonia shares how the change has amplified its environmental work.

Since the company restructured in late 2022, Patagonia has given $180 million to the Holdfast Collective, a group of five nonprofit trusts that the company created to fund environmental work.

In addition to the Holdfast Collective's work, Patagonia donates 1% of its annual revenue to environmental causes.

After reinvesting some of its profits back into the company, Patagonia gives everything else to the Holdfast Collective to spend on protecting the environment and fighting climate change.

Pattie Gonia: Patagonia Is Trying to “Bully” and “Erase” Her With Lawsuit | Them

Patagonia will pay for travel, lodging, and food for staff on its healthcare plans.

Patagonia’s corporate activism is a large part of its brand identity. In 2017, the company sued then-President Donald Trump over his administration’s move to dramatically shrink two national monuments in Utah.

Patagonia is an accredited and founding member of the Fair Labor Association...And yet, despite these aspirations, four years ago internal audits turned up multiple instances of human trafficking, forced labor, and exploitation in Patagonia’s supply chain, according to Cara Chacon, the company’s director of social and environmental responsibility, and Thuy Nguyen, the manager of supply chain social responsibility and special programs.

Description This recall involves Patagonia Infant Capilene Midweight Base Layer Sets, sold in sizes 0 months through 24 months with style number 60910.

Patagonia Recalls Patagonia Infant Capilene Midweight Base Layer Sets Due to Choking Hazard

Patagonia Recalls Patagonia Infant Capilene Midweight Base Layer Sets Due to Choking Hazard

[{"ConsumerContact":null,"Description":"March 9, 1995 Release # 95-090 Washington, DC - CPSC, Patagonia Inc. of Ventura, Calif., is voluntarily recalling 3,000 of its Patagonia Penguino stuffed penguin toys.

For the first time in its history, hippie favorite Patagonia is endorsing political candidates

It’s the first time Patagonia has made political endorsements.

It's the first time Patagonia has made political endorsements.

Patagonia's Official Endorsement of Two Senate Candidates Is a First for the Company

The company also sparred with Interior Secretary Ryan Zinke, who accused Patagonia of lying after it claimed on its website that Trump "stole" public lands by shrinking Bears Ears and another monument in Utah.

Patagonia’s CEO, Ryan Gellert, said on Tuesday “that instead of celebrating democracy in action, a group of lawmakers in Georgia and states across America are doing everything in their power to make it harder for their constituents to vote”.

Patagonia layoffs 2024: CEO Ryan Gellert announces restructuring - Fast Company

Patagonia channels all its profits, excluding those reinvested in the company, through an entity named Holdfast Collective, which has established and oversees five different 501(c)(4) nonprofits, according to the NYT.

Chouinard, his wife, and their two adult children transferred all of the company’s voting stock, or 2 percent of all shares, to the newly created Patagonia Purpose Trust, as first reported by the New York Times.

2 While Patagonia itself would continue to operate as a traditional private for -profit corporation, the Chouinard family transferred all of the company’s voting stock (two percent of total shares) into a new entity called the Patagonia Purpose Trust.3 Close advisors and family members would oversee the trust, which has the decision-making authority to ensure that Patagonia maintains its socially responsible business methods and charitable giving practices.4 The remaining 98% of Patagonia, its common shares, were donated to the Holdfast Collective, a newly established 501(c)(4) nonprofit which will receive all of Patagonia’s profits and use them to fund efforts to combat climate change.5 On Patagonia’s website, the company declared: “Earth is now our only shareholder.”6 Patagonia’s new business structure7 is the latest innovation in the world of “social enterprises,” broadly defined as companies that 1.

According to the initial New York Times article announcing the change, Patagonia itself will continue to operate as a private for-profit public benefit corporation based in Ventura, California.170 All of the company’s voting stock, two percent of total shares, was transferred from the Chouinard family to the newly - established Patagonia Purpose Trust, overseen by “members of the family and their closest advisers.”171 The Patagonia Purpose Trust intends “to ensure that Patagonia makes good on its commitment to run a socially responsible business and give away its profits.”172 The remaining 98% of the shares, the common shares of the company, were donated to the Holdfast Collective, a newly established nonprofit organization that will receive all the company’s profits and use the capital to combat climate change.173 As a 501(c)(4), the Holdfast Collective can also make unlimited political contributions and has distributed over $71 million to more 166.

Patagonia and the Chouinards set up a series of trusts, limited liability corporations and charitable groups designed to protect the independence of the clothing company while distributing all of its profits through an entity known as the Holdfast Collective.

What should we make of Patagonia founder Yvon Chouinard’s decision to transfer ownership of his company to a special trust and nonprofit dedicated to environmental values? It’s hard to say, given that the public hasn’t been given any details on the matter.

The family transferred its voting shares, around 2 percent of its stock, to the Patagonia Purpose Trust to protect the company’s values.

To date, the collective groups have received $210 million in dividends from Patagonia and deployed roughly $175 million of that capital.

On Patagonia’s tax forms filed with the IRS, the private foundation said its grants to AFGJ were “to support environmental projects.” Patagonia’s focus on environmentalism is no anomaly: With the stated aim of combating climate change, Patagonia underwent an unusual corporate restructuring in 2022, as its founder, Yvon Chouinard, and his family transferred their ownership of Patagonia to a trust and nonprofit group.

With Chouinard’s blessing, Patagonia’s ownership was transferred to the Holdfast Collective and the Patagonia Purpose Trust.

Patagonia was founded by Yvon Chouinard, a lifelong rock climber so uncomfortable with his wealth that he pushed to get himself removed from the Forbes billionaire list.

And he got to make sure his pet causes were cared for — much like Chouinard has done with the donation of Patagonia to his own nonprofits that he says will advocate for climate change. It was a huge move, and it instantly lit up the business world.

Over the years, Patagonia has pioneered ecological innovations to reduce its carbon footprint, taken activist political stances even at the expense of its bottom line, and given $145 million to environmental causes.

Patagonia founder Yvon Chouinard, his spouse and two adult children are giving away their ownership in the apparel maker he started some 50 years ago, dedicating all profits from the company to projects and organizations that will protect wild land and biodiversity and fight the climate crisis. The company is worth about $3 billion, according to the New York Times.

Yvon Chouinard donates Patagonia to fight climate change, protect land

Despite this change, Gellert insists that the company’s mission and values remain intact: “Many people have asked me how Patagonia has changed since its founders, the Chouinards, transferred ownership of the company to the Patagonia Purpose Trust and the Holdfast Collective two years ago,” Gellert wrote.

The two nonprofits will donate 100 percent of Patagonia’s future profits (roughly $100 million annually as of 2022) to environmentalist efforts.

In 2024, Patagonia transferred approximately $79.8 million in profits to the Holdfast Collective, including $63.3 million to the Holdfast Trust and about $16.5 million to four other affiliated trusts.

Patagonia had previously donated $50 million to Holdfast prior to the sale and another $100 million was donated from Patagonia following the transfer.

In August 2022, Patagonia founder Yvon Chouinard, his wife, and their two children, transferred all voting shares (about 2% of total company shares) of the company to the Patagonia Purpose Trust, a trust overseen by the Chouinards dedicated to using Patagonia’s profits for philanthropic environmental purposes.

According to the letter: “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.

Addressing CEO Ryan Gellert, the board of directors and the company’s Purpose Trust, Pattie Gonia opened by praising Patagonia as an “exceptional company” with a long-standing commitment to environmental protection.

“How do we ensure that traditional living and practices that have been going on for the better part of a century or more don’t get disrupted?” said Alex Perry, the Latin America general manager for Patagonia, which has been funding local conservation groups in the Cochamó Valley for more than a decade and in 2024 donated $4m through the company’s non-profit owner, Holdfast Collective.

Patagonia adopted a new ownership structure in 2022 that involves giving excess profits to a nonprofit.

Patagonia CEO Ryan Gellert publicly opposes the Trump administration's proposal to overturn the "Roadless Rule," urging the public to comment before the deadline this Friday.

In September 2009, Patagonia Building Supplies, Inc., dba as W. Los Angeles Building Materials, agreed to pay $9,000 in penalties; $6,750 to the California Air Pollution Fund, $1,125 to the Peralta Community College District, and $1,125 to the California Pollution Control Financing Authority for violating air quality regulations.