As climate change continues to be the most urgent threat facing humanity, the issue has become a matter of immediate action. It’s no longer permissible to simply talk about future plans or strategies; as the impacts of climate change become impossible to ignore – bushfires, flooding, and those unprecedented climate events that have now become the norm – our focus immediately shifts to the things we can do, now.
For those in the spotlight, particularly the millionaires who often tout the importance of sustainability, too often their lifestyle is one that goes against the ethos of the very companies they stand at the helm of. But in what is now a powerful lesson to all those looking to affect change or combat climate change, Yvon Chouinard, the reluctant billionaire founder of outdoor apparel brand Patagonia, has given away the company in an effort to fight the climate crisis.
For those uninitiated with Chouinard, the man never sought out to become wealthy or a famed figure in the world of business. Rather, he was a prolific rock climber with a passion for the outdoors, someone who transferred that passion to a clothing brand in 1973 with a reputation for supporting environmental causes. Since 1985, the company has committed 1 per cent of its total sales to fighting climate change through One Percent for the Planet, an organisation that includes Chouinard as a founding member.
What’s more, Patagonia announced in 2019 plans to be carbon neutral by 2025, while in 2021 they said they would stop putting their trademark permanent branding on products because “adding an additional non-removable logo reduces the life span of a garment, often by a lot, for trivial reasons.”
With a net worth of US$1.2 billion, Chouinard has transferred the family’s ownership of the company to a trust and a non-profit organisation that will now control 98 per cent of Patagonia, including all non-voting shares. “Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis,” wrote Chouinard in an open letter now published on the company’s website.
For most in Chouinard’s position, the options for stepping away from Patagonia would have been those that saw the clothing company sold or taken public and selling its shares on a stock exchange. By eschewing such options though, Chouinard opted for a future with a purpose, rather than one that simply saw his own pockets widen.
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
“Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.”
According to the New York Times, Patagonia is valued at $4.4 billion and will continue to operate as a private, for-profit corporation. The only difference however, will be that the Chouinard family will no longer own the company. Now, environmental not-for-profit Holdfast Collective owns it and all non-voting stock, while newly formed Patagonia Purpose Trust owns 2 per cent and all the voting stock in the company. This trust will approve key company decisions, such as who sits on the board of directors.
As the New York Times reports, Chouinard’s actions mean he and his family will receive no financial benefit and will even face a tax bill from the donation, making it a decision that serves only to reinforce his passion and commitment to changing the world and protecting it for future generations to come.
“I never wanted to be a businessman. I started as a craftsman, making climbing gear for my friends and myself, then got into apparel. As we began to witness the extent of global warming and ecological destruction, and our own contribution to it, Patagonia committed to using our company to change the way business was done,” wrote Chouinard.
“It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started. 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. This is another way we’ve found to do our part,” he added.
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it.”