“The Earth is now our sole shareholder,” wrote Yvon Chouinard, the tycoon and owner of the outdoor sportswear brand Patagonia, in a letter that, in a completely selfless act, donated the entire company, valued at 3 billion dollars, to a trust for non-profit organizations fighting climate change.
"If we have any hope of a prosperous planet, let alone a business, it will require all of us to do what we can with the resources we have. This is what we can do," he said in the letter that can be read in the Patagonia's website.
The billionaire made it clear that he never wanted to be a businessman. “I started out as a craftsman, making climbing equipment for my friends and myself, and then I moved into clothing.”
But, he said, as it began to witness the extent of global warming and ecological destruction - and our own contribution - Patagonia committed to using the company to change the way business was done.
"If we could do the right thing while making enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way."
In this regard, he stressed that the change began with its products, using materials that caused less damage to the environment. In addition to giving away 1.0 percent of sales each year.
“We became a certified B Corporation and a California Benefit Corporation, writing our values into our corporate charter to be upheld. Most recently, in 2018, we changed the company’s purpose to: We are in business to save our home planet.”
Chouinard explained that while the company is doing everything it can to address the environmental crisis, “it is not enough.”
“We needed to find a way to invest more money in fighting the crisis while keeping the company’s values intact. Truth be told, there were no good options available. So, we created our own,” he stressed.
The businessman clarified that one option was to sell Patagonia and donate all the money, however, they could not be sure that a new owner would maintain the values, the employees, or the entire team of people around the world.
Another route was to take the company public, but, he said, that would have been a disaster.
“What a disaster that would have been. Even well-intentioned public companies are under too much pressure to generate short-term profits at the expense of long-term vitality and responsibility.”
So for Chouinard, there were no good options available, and he decided to do things his way.
“Rather than ‘going public’, I could say we are ‘making a purpose’. Instead of extracting value from nature and transforming it into wealth for investors, we will use the wealth created by Patagonia to protect the source of all wealth,” he said.
How will the transfer of Yvon Chouinard's company work?
100 percent of the company's voting shares are transferred to the Patagonia Purpose Trust, created to protect the company's values; and 100 percent of the non-voting shares had been given to Holdfast Collective, a nonprofit dedicated to combating the environmental crisis and defending nature.
«Funding will come from Patagonia»: Every year, the money earned after reinvesting in the business will be distributed as dividends to help combat the crisis.
“It’s been almost 50 years since we began our experiment in responsible business, and we’re just getting started. If we have any hope of a thriving planet, let alone a thriving business, 50 years from now, it will require all of us to do what we can with the resources we have. This is another way we’ve found to do our part,” he said in the letter.
“Despite its vastness, Earth’s resources are not infinite, and it is clear that we have exceeded its limits. But it is also resilient. We can save our planet if we commit to it,” he concluded.
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