Founder Yvon Chouinard said that all the company’s profits will go into rescuing the world The billionaire owner of Patagonia revealed on Wednesday that he would be donating the entire firm in an effort to reverse global warming.
Patagonia founder Yvon Chouinard, who transformed his passion for rock climbing into one of the world’s most successful sportswear firms, is leaving the whole company to a creatively organized trust and nonprofit, meant to pour all of the company’s profits into protecting the planet. The firm stated, “At the present time, Earth is our only stakeholder.” ALL proceeds, forever, will be donated to our cause to “rescue our home planet.”
Chouinard, 83, worked with his wife and two daughters as well as teams of corporate lawyers to establish a structure that will allow Patagonia to continue to function as a for-profit firm whose earnings will go to benefit environmental activities.
“If we have any hope of a thriving world — 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,” said Chouinard in a statement. “This is another way we’ve found to do our part.”
The Chouinard family gave a trust 2% of the company’s shares and the right to make all major decisions so that it could continue to carry out Chouinard’s vision. The remaining 98% of the company’s shares will go to a nonprofit called the Holdfast Collective, which “will spend every dollar donated to fight the environmental crisis, safeguard nature and biodiversity, and promote thriving communities, as rapidly as possible,” according to the announcement.
Each year, the money Patagonia produces after reinvesting in the business will be transferred to the organization to assist battle the environmental catastrophe. According to the statement, the organizational setup was devised to prevent a shift in the company’s ideals as a result of a sale or an IPO.
“Instead of ‘going public, you could say we’re ‘going purpose’,” remarked Chouinard. To paraphrase Patagonia’s founder, “Instead of extracting value from nature and changing it into riches for investors, we’ll use the wealth Patagonia makes to conserve the source of all prosperity.” Patagonia board chair Charles Conn posted an opinion article for Fortune on Wednesday explaining the company’s new course of action and how it aims to prove wrong the classic premise of shareholder capitalism: that corporate goals other than profit will just confuse investors.
“Instead of exploiting natural resources to achieve shareholder profits, we are turning shareholder capitalism on its head by making the Earth our only shareholder,” he said. Chouinard and Patagonia have long been groundbreakers in environmental action and employee benefits. The Ventura, California-based company has built a reputation throughout its nearly 50 years of operation for providing generous benefits to its staff, such as on-site nurseries and afternoons off on good surf days.
The initiative, called “1% for the Planet Scheme,” was established in 2001 and is the formalization of a practice that the corporation began in the 1980s. The corporation claims that as a direct outcome of the program, $140 million has been contributed to environmental protection and revitalization efforts.
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One of the first firms to become a b-Corp by voluntarily being certified as satisfying specific environmental and social standards, Patagonia has recently revised its mission statement to read: “We’re in business to save our home planet.” After starting his company making metal climbing pitons (or spikes to wedge into fissures while rock climbing) and living out of his van at climbing sites for many years, eccentric entrepreneur Chouinard told the New York Times that he was “horrified” to be viewed as a billionaire.
“I was in Forbes magazine listed as a billionaire, which really, really ticked me off,” he continued. I don’t have a million dollars in the bank. If you’re looking for me, I’m not in a Lexus. Many charity and trust specialists have informed the New York Times that the Chouinard family is among the most generous in the world.
David Callahan, the publisher of the website Inside Philanthropy, told the newspaper, “This family is a significant outlier when you realize that most billionaires give only a minuscule fraction of their net wealth every year.”
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