Any profit not reinvested into the business will now go to organisations to fight the climate crisis, which is an estimated $100m (£87m) a year.
Yvon Chouinard said in a public letter: “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.”
The Patagonia Purpose Trust, which is led by the Chouinard family, will remain the company’s controlling shareholder but will only own 2 per cent of its total stock. The Holdfast Collective, a US charity “dedicated to fighting the environmental crisis” will own the other 98 per cent of the company
So, who is the founder behind the company making big moves in the name of climate change?
Who is Yvon Chouinard?
The 83-year-old began rock climbing in the Yosemite Valley, California, in the 1960s, which was the start of his lifelong passion for the sport.
He began his career as a blacksmith in 1957, making climbing tools which he sold from the back of his car to support his lifestyle of surfing and climbing in California.
In 1965, he partnered with Tom Frost, a fellow rock climber, on his now company Chouinard Equipment, Ltd. In the late 1960s, the pair reinvented their climbing tools.
By 1970, the company was the largest supplier of climbing hardware. At this point, Mr Chouinard and Mr Frost also realised that the improved tools, which now made 70 per cent of the company’s income, were causing significant damage to the cracks of Yosemite.
As a result, the pair moved the company in the direction of “clean climbing”. The new concept contributed to the company’s further success, which really took off in the 1970s.
He founded Patagonia in 1973 after a 1970 trip to Scotland where he wore a rugby shirt to go rock climbing, which prevented the hardware slings from hurting his neck. From there, he began selling clothes as well as climbing gear, and launched Patagonia.
Mr Chouinard committed to environmental activism early on. Since 1985, Patagonia has pledged one per cent of sales to grassroots environmental groups – which will stay as part of the business model even with the ownership changes.
In 2002, he founded a non-profit called 1 % for the Planet to encourage other businesses to do the same.
Mr Chouinard’s net worth is thought to be worth $1.2bn (£1.0bn).