Do we like Patagonia?
Outdoor clothing and gear maker, certified B Corp, based in Ventura, California.
Our score: 8 out of 10. We'd back them. Profits go to environmental causes and they're open about their problems. Supply-chain pay and the tax treatment of the ownership transfer are the weak spots.
Yvon Chouinard founded Patagonia in 1973. In September 2022 he and his family gave up ownership. The voting stock went to the Patagonia Purpose Trust, and the other 98% went to the Holdfast Collective, a climate nonprofit. The pitch was that "Earth is now our only shareholder", and any profit not reinvested goes out as a dividend.
The money is real. The company's first Progress Report said it had distributed US$180 million to Holdfast since 2022. Patagonia's own head of policy projected roughly $100 million a year going forward. Holdfast says it funds land protection, grassroots groups and politicians fighting the climate crisis.
Not everyone clapped. Critics argue the structure let the Chouinards avoid tax on the 98% transfer, and that the family still steers both the trust and Holdfast. The family did pay about $17.5 million in gift tax on the voting shares, according to the Kentucky Law Journal.
The factories are the soft spot. Follow the Money reported that a newly approved Sri Lankan supplier paid about a quarter of a living wage, and that workers there described high workloads and harassment. Patagonia says it audits regularly and isn't the workers' employer. It also says over a third of its factories pay a living wage.
Overall we like them. Few companies hand their profits to environmental work, push resale through Worn Wear, and say so openly when they fall short. The tax questions and supplier pay keep it from a 10.