“Another path was for the company to go public. What a disaster that would be,” comments the businessman, among other things.
The founder of Patagonia, Yvon Chouinard, decided to donate his entire company to the fight against climate change. The businessman, who founded the outdoor clothing company in 1973, was a billionaire and decided, as he says, to “redesign capitalism”.
Patagonia, which has annual revenue of $1.5 billion and is worth $3 billion according to the New York Times, will now be owned by a climate-focused trust and a consortium of nonprofits. “Every dollar (of its profits) not reinvested in Patagonia will be distributed as a dividend to protect the planet.”
Chouinard, who before giving away his company was worth $1.2 billion, made the decision with his wife and two grown children.
“While we are doing our best to address the environmental crisis, it is not enough. We had to find a way to allocate more money to fight the crisis while keeping the company’s values intact. One option was to sell Patagonia and donate all the money. But we could not be sure that the new owner would maintain our values or continue to employ our team of people around the world,” he explained in a letter.
“Another path was for the company to go public. What a disaster that would be. Even well-intentioned listed companies are under excessive pressure to generate short-term profits at the expense of long-term sustainability and responsibility,” he continued.
To conclude: “To tell the truth, there were no good options available. So, we created our own.”
The company’s shares will now be held by a climate-focused trust and a group of non-profit organizations, called Patagonia Purpose Trust and Holdfast Collective respectively. All profits that are not necessary for the operation of the company will be allocated, through these organizations, for the protection of the environment. The trust will be overseen by family members and close advisers.
Patagonia estimates it will donate about $100 million a year, depending on how the business goes.
The company sells new and used outdoor clothing, equipment for outdoor activities such as camping, fishing and climbing, and sustainably sourced food and beverages.
After informing its employees of this move, the company changed its website, where it now states that “Earth is now our sole shareholder.”
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