Chouinard collaborated with his wife and two children to develop a framework that will allow Patagonia to remain operational as a for-profit business, with earnings going out to only climate-action efforts.
Yvon Chouinard founded the sports apparel company Patagonia more than 50 years ago, turning his passion for rock climbing into one of the world’s most successful sportswear brands.
Now, Chouinard and his family—his wife and two adult children—have decided to set yet another example in the world of corporate leadership. The family took going green to the next level when they announced they are all giving up their stake in the brand. They will be donating all proceeds to initiatives and organizations that promote climate action and biodiversity.
Hey, friends, we just gave our company to planet Earth. OK, it’s more nuanced than that, but we’re closed today to celebrate this new plan to save our one and only home. We’ll be back online tomorrow.https://t.co/fvRFDgOzVZ— Patagonia (@patagonia) September 14, 2022
Yvon is donating the whole firm to a specifically structured trust and nonprofit with the goal of directing all of the company's income toward environmental initiatives, according to The Guardian. “As of now, Earth is our only shareholder,” the company announced. “ALL profits, in perpetuity, will go to our mission to save our home planet.”
Chouinard, 83, collaborated with his wife and two children, as well as teams of corporate attorneys, to develop a framework that will allow Patagonia to remain operational as a for-profit business, with earnings going out to only climate-action efforts.
“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,” announced the company in a statement. The owners contemplated that an option could have been to sell Patagonia and donate, but they “couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.” They contemplated taking the company public, but thought that option would be a "disaster.”
Patagonia founder Yvon Chouinard is giving away the company. He and his family have transferred all the company’s voting stock into a trust, with the rest of the shares going to a nonprofit.— Kim Bhasin (@KimBhasin) September 14, 2022
Here's the letter from Yvon: pic.twitter.com/gPUxcuRItN
So Chouinard and his family devised their own plan of action. Chouinard's family gave 2% of all equity to a trust called the Patagonia Purpose Trust, with the entire decision-making ability to supervise the company's purpose and principles. According to the statement, the remaining 98% of the company's shares will be donated to a charity named the Holdfast Collective, which “will use every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible.”
“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,” said Chouinard in a statement. “This is another way we’ve found to do our part.”
Patagonia's new strategy is intended to debunk the classic shareholder capitalism tenet that business aims other than profit would just confuse investors, wrote Patagonia board chair Charles Conn in an editorial published on Wednesday in Fortune magazine. “Instead of exploiting natural resources to make shareholder returns, we are turning shareholder capitalism on its head by making the Earth our only shareholder,” he wrote.
this is what conscious wealth looks like - Patagonia's owner has given it to a set of trusts and nonprofits designed to use every profit to combat climate change— Hazel Southwell (@HSouthwellFE) September 15, 2022
pretty different from a personal space programme, as billionaire decisions go https://t.co/g9BVHFEpzJ
Chouinard and Patagonia have been trailblazers in environmental action and employee benefits for many years. In its almost 50-year history, the Ventura, California-based firm has been recognized for providing substantial staff benefits, including on-site nurseries and afternoons off on good surf days.
The corporation began contributing 1% of its revenues to environmental organizations in the 1980s, a scheme that was codified in 2001 as the "1% for the Planet Scheme." The campaign resulted in $140 million in donations for the preservation and rehabilitation of the natural environment. Patagonia was among the first firms to become a B Corp, submitting to certification as satisfying specific environmental and social requirements, and has recently amended its mission statement to state: "We're in business to save our home planet."