The founder and previous owner of outdoor company Patagonia, Yvon Chouinard, has donated his company to charitable foundations. The 83-year-old wants to use it to combat climate change and continue his experiment in responsible entrepreneurship.
Some 50 years after the company was founded, the Chouinard family transferred its ownership rights to the Patagonia Purpose Trust and the Holdfast Collective. All profits that are not reinvested in the company are made available for environmental protection – in particular for measures to combat climate change.
“Instead of exploiting nature for profit, we use the wealth Patagonia creates to protect the source of all wealth: nature. We make the earth our sole shareholder. I’m dead serious about saving this planet,” Chouinard said in a letter published on the Patagonia website Wednesday.
A new form of capitalism
According to the US newspaper New York Times, Patagonia’s company value amounts to around 3 billion US dollars (3.01 billion euros). According to the report, the company generates about $100 million a year in profits that are not reinvested back into the company. This amount is to be used in the future via the two foundations mentioned for the fight against global warming and for nature conservation.
“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,” Chouinard told the newspaper.
The Californian outdoor outfitter became known as a sustainable clothing company. Patagonia is a certified B Corp and incorporated as a California nonprofit corporation. In its products, Patagonia uses materials that have a lower impact on the environment. Each year, the company also donates 1 percent of sales to environmental nonprofits. Since 2018, the corporate goal has been: “We are in business to save our home planet.” But that wasn’t enough for the founder.
Why isn’t Yvon Chouinard selling Patagonia and donating the proceeds?
Patagonia is already doing its best to address the impact of the environmental crisis, but it hasn’t been enough, Chouinard said. “We had to find a way to put more money into fighting this crisis while keeping the company’s assets intact.”
In his letter, the founder went through the usual options: Selling the company and donating the proceeds from it was not an alternative. It is uncertain whether a new owner would preserve the values or continue to employ employees around the world.
Another way would have been to take the company public. “What a disaster that would have been,” says the Patagonia founder. Because even publicly traded companies with good intentions are under too much pressure to make short-term profits.
“To tell the truth, there weren’t any good options. So we created our own,” writes Chouinard, before explaining how the foundations are structured.
Nothing will change in the management of the company
Patagonia has transferred 100 percent of the company’s voting shares to the Patagonia Purpose Trust. Created to protect the company’s values, this foundation is managed by the Chouinard family. This allows her to elect and oversee Patagonia’s board of directors and oversee the philanthropic work of the Holdfast Collective.
The non-profit organization Holdfast Collective will get 100 percent of the non-voting shares. This foundation is dedicated to fighting the environmental crisis and protecting nature. Patagonia takes care of the financing: Every year, the profit that is not invested in the company is distributed as a dividend.
Nothing will change in the management of the outdoor outfitter. Ryan Gellert remains CEO and the Chouinard family remains on Patagonia’s board of directors, along with fellow members Kris Tompkins, Dan Emmett, Ayana Elizabeth Johnson, Charles Conn. (FashionUnited/dpa)
