If you plan to buy some speciality outdoors apparel from Patagonia and visit the website, you will be greeted by a message: “Earth is now our only shareholder.”
A truer sentence may not have been uttered by a company after Yvon Chouinard, founder of Patagonia, and his family decided to give away the ownership of their $3 billion company and dedicate all profits to projects and organisations that will fight climate crisis.
In an exclusive interview to New York Times, the 83-year-old Chouinard said: “Hopefully, this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people. We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
The nature-loving Chouinard was described by the newspaper as “the eccentric rock climber who became a reluctant billionaire with his unconventional spin on capitalism”.
His wife and two adult children were party to his decision to give away the business he started 50 years ago. Rather than selling the company or taking it public, the Chouinard family transferred its ownership of Patagonia to a specially designed climate-focused trust (Patagonia Purpose Trust) and a non-profit organisation (Holdfast Collective). They were created to preserve the company’s independence and ensure that its annual profits of approximately $100 million are used to combat climate change and protect undeveloped land around the globe.
In a letter that was published on the Patagonia website on Wednesday, Choiunard explained his decision: “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.”
The trust will own all voting shares of the company (2 per cent of total shares) and ensure that every dollar that is not reinvested back into Patagonia, is distributed to protect the planet. It will be overseen by members of the family and close advisors. The Holdfast Collective now owns rest 98 percent non-voting stock.
“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,” Chouinard added in his heartfelt letter to the employees.
Ryan Gellert will continue to serve as Patagonia’s CEO, and the Chouinard family will remain on Patagonia’s board.
The company sells new and used outdoor apparel, gear for outdoor activities like camping, fishing and climbing, and food and beverages made from sustainable sources.
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