"The Earth is now our sole shareholder," noted in a letter Yvon Chouinard, the tycoon and owner of outdoor sportswear brand Patagonia, who in a completely selfless act donated the entire company, valued at $3 billion to a trust for nonprofits fighting climate change.
"If we have any hope of a prosperous planet, much less a business, it will be necessary for all of us to do what we can with the resources we have. Here's what we can do," he said in the letter, which can be read on the Patagonia's website.
The billionaire made it clear that he never wanted to be a businessman. "I started as a craftsman, making climbing gear for my friends and myself, and then I went into apparel."
However, he said, as he began to witness the extent of global warming and ecological destruction, and our own contribution, Patagonia became committed to using the company to change the way business was done.
"If we could do the right thing while earning enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way."
In that sense, he emphasized 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 preserved. 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 all 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 entrepreneur 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 path was to take the company public, however, he said, it 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 accountability."
Therefore, for Chouinard, there were no good options available, and he decided to do things his own way.
"Instead of 'going public,' I could say we are 'making it purposeful.' Instead of extracting value from nature and transforming it into wealth for investors, we will use the wealth Patagonia creates to protect the source of all wealth," he said.
How will Yvon Chouinard's company transfer 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 non-profit organization dedicated to combating the environmental crisis and defending nature.
"Funding will come from Patagonia": Each year, money earned after reinvesting in the business will be distributed as a dividend 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, much less a thriving business, 50 years from now, it will be necessary for all of us to do what we can with the resources we have. This is another way we have found to do our part," he said in the letter.
"Despite its vastness, the Earth's resources are not infinite and we have clearly exceeded its limits. But it is also resilient. We can save our planet if we commit to it," he concluded.
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