Corporate transforms wealth into purpose
Patagonia founder Yvon Chouinard is giving away his company. He's transferring it to a newly formed foundation and nonprofit organization to ensure profits go toward fighting the climate crisis.
Chouinard, the billionaire mountaineer-turned-businessman, announced the move in a statement Wednesday.
"Instead of 'going public,' you could say we're 'purpose-driven.' Instead of extracting value from nature and turning it into wealth for investors, we will use the wealth Patagonia creates to protect the source of all wealth," he wrote.
Company shares worth three billion euros
Chouinard, 83, said he chose this unique ownership model and did not want to sell the company to an owner who could potentially jeopardize Patagonia's values.
Instead, ownership of the outdoor apparel company, valued at about three billion euros, will be transferred to the "Patagonia Purpose Trust and Holdfast Collective."
"It's been nearly 50 years since we began our experiment in responsible business, and we're just getting started. If we want to have any hope of a thriving planet - let alone a thriving business - 50 years from now, we all need to do what we can with the resources we have. This is another way we have found to do our part," Chouinard said.
Up to 100 million euros a year could be invested in climate protection
The Patagonia company announced that in the future, any profits that are not reinvested in the company will be distributed to Holdfast Collective to be used for sustainable and environmental purposes, according to an additional statement to Business Insider. The company estimates that this will amount to about 100 million euros per year .
Founded by Chouinard nearly 50 years ago, Patagonia is known for breaking with conventional business practices and championing sustainability. In an interview with „The New York Times“ about the decision, Chouinard said he hopes the move will "influence a new form of capitalism that doesn't end up with a few rich people and a bunch of poor people."We will give away as much money as we can to people who are actively working to save this planet," he said.
Dan Mosley of merchant bank BDT & Co, who helped Patagonia structure the move, told the Times he had never seen anything like it, "In my 30-plus years in estate planning, what the Chouinard family has done is truly remarkable."
The family has given away large portions of its assets before to fight climate change and achieve certain Sustainable Development Goals until it’s too late.
"It's irrevocably fixed. They can't take it back, and they never want to take it back," Mosley said.
Chouinard and his family have given away most of their wealth over the course of their lives, making them one of the most charitable families in the United States."I didn't know what to do with the business because I never wanted to have a business," Chouinard told the Times. "I didn't want to be a businessman. Now I could die tomorrow and the company will do the right thing for the next 50 years and I won't have to be around for it."Patagonia’s actions are a powerful step to kickstart the transition of economy to a wiser, kinder, more sustainable future.
More information: https://www.patagonia.com/ownership/