Patagonia founder Yvon Chouinard, who has previously expressed his reluctance to accumulate wealth, is giving away his company.
The outdoor clothing company will now be in the hands of a trust and a not-for-profit organisation. All future profits will be donated to help fight climate change, the company announced on Wednesday.
“It’s half a century since we began our experiment in responsible business,” said Chouinard, 84. “If we have any hope of a thriving planet in 50 years, it requires all of us doing everything we can with the resources we have. As the business leader I never wanted to be, I’m doing my part.”
He added, “Instead of extracting value from nature and transforming it into wealth, we use the wealth Patagonia creates to protect the source. We make the Earth our sole shareholder. I am absolutely serious about saving this planet.”
Patagonia Purpose Trust will control all voting shares in the company (2%), while Holdfast Collective, a non-profit climate change organization, will own all non-voting shares (98%).
Chouinard, who is currently a board member, said in a statement that while trying to fight climate change, he realized his company was contributing to it. So he had thought about what to do with the business.
One option was to sell it and donate the money, but Chouinard said he was concerned that new owners might not have the same values or retain the same employees. The other option was to become a listed entity.
“What a disaster that would be,” he said. “Even public companies with good intentions are under too much pressure to create short-term profit at the expense of long-term vitality and responsibility.”
The company will continue to give 1% of revenue to grassroots communities, and management will not change.