The founder of popular outdoor apparel brand Patagonia announced on Wednesday that he is giving the company away to a trust that will use its profits to fight climate change.
Yvon Chouinard, an early pioneer of alpine climbs in Yosemite National Park, transferred ownership of Patagonia to two new entities, a trust designed to preserve the company’s existing values and a non-profit organization working to combat climate change.
A statement by Chouinard, 83, read: “Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder.”
Currently, Patagonia is valued at US$3 billion and nets profits of $100 million a year, The New York Times reported.
“If we have any hope of a thriving planet — much less a thriving business — 50 years from now, it is going to take all of us doing what we can with the resources we have,” Chouinard wrote in the statement. “This is what we can do.”
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Patagonia is a certified B Corp, meaning they are a private, for-profit corporation that voluntarily meets the highest standards for social and environmental performance.
Worried about maintaining the company’s values, Chouinard, his wife and their two adult children did not want to outright sell the company in order to donate the money toward climate action. They also did not want to take the company public for fear of “too much pressure to create short-term gain at the expense of long-term vitality and responsibility,” Chouinard wrote in the company statement.
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“Truth be told, there were no good options available. So, we created our own,” he wrote. “Instead of ‘going public,’ you could say we’re ‘going purpose.’”
One hundred per cent of Patagonia’s voting stock was transferred to the newly established Patagonia Purpose Trust, designed to protect the company’s social and environmental standards.
All of Patagonia’s non-voting stock was given to Holdfast Collective, a non-profit dedicated to fighting the environmental crisis and defending nature. The profits made after reinvesting into the company will be distributed wholly as a dividend to help fight the climate crisis, Chouinard claimed.
Patagonia’s leadership team has not changed.
Chouinard is expected to “guide the Patagonia Purpose Trust, electing and overseeing its leadership” while also sitting on Patagonia’s board.
Chouinard has always been a staunch environmentalist. He founded Patagonia in 1973 and became an early adopter of everything from organic cotton, to “clean climbing” equipment designed to preserve rock faces and on-site child care for employees, according to The New York Times.
Every year since it was established, Patagonia has given away one per cent of its sales to mostly grassroots environmental programs.
The success of Patagonia made Chouinard a reluctant billionaire.
“I was in Forbes magazine listed as a billionaire, which really, really pissed me off,” Chouinard told The New York Times. “I don’t have $1 billion in the bank. I don’t drive Lexuses.”
Still, Chouinard told The New York Times this decision to give away the company was an “ideal solution.”
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it,” he wrote in the Patagonia statement.
© 2022 Global News, a division of Corus Entertainment Inc.
