Yvon Chouinard, the founder and CEO of outdoor apparel and gear company Patagonia, has always been a climate activist. Most of Patagonia's products are made using renewable and recycled raw materials. Additionally, since 1985, the company has been donating one percent of its annual sales to protect and restore the environment.
On September 14, 2022, the 84-year-old entrepreneur took his quest to protect the planet to a new level. He transferred the ownership of Patagonia, now valued at $3 billion, to a trust and a nonprofit organization dedicated to fighting the climate crisis.
"It's been a half-century since we began our experiment in responsible business," Chouinard said. "If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. As the business leader, I never wanted to be, I am doing my part."
The company's voting shares (two percent of the total stock) will now be owned by the Patagonia Purpose Trust, specially created to protect the company's values. The non-voting shares (98 percent) are being transferred to the Holdfast Collective, a nonprofit dedicated to fighting climate change and preserving undeveloped land worldwide. Patagonia will donate all its profits — about $100 million a year— to the nonprofit.
Chouinard says he came up with the radical idea after realizing that his company was not doing enough about the environmental crisis. He wanted to find a way to donate more money without losing the company's values. The easiest way would have been to sell the company and donate the proceeds. However, the 84-year-old was concerned the new owner would not maintain Patagonia's sustainable culture.
Making the company a publicly traded entity was also an option. But Chouinard believes that would have been a disaster. He says, "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."
Hopefully, Chouinard's bold and generous decision will encourage other billionaires to step up the fight against climate change as well.
Resources: Patagonia.com, NPR.com, News.Yahoo.com
