Yvon Chouinard, the eccentric outdoor enthusiast, rock climber, and founder of the outdoor apparel company Patagonia, has given the company away. The news spread quickly in the fashion and sustainability world, as Patagonia has been around for half a century, and has made Chouinard into a billionaire.
The catch is that Yvon Chouinard did not sell the company or turn it public, instead, along with his wife and 2 children, they transferred ownership of the company to a nonprofit organization and a specially designed trust called the Patagonia Purpose Trust. The company will continue its operations as a for-profit corporation based in Ventura, California, but the family no longer has voting stock in it.
Patagonia is valued at around $3 billion. The designed trust was created to ensure the company’s independence and all of its profits, which can rack up to $100 million yearly, will be used to protect undeveloped land around the globe as well as combat climate change.
This bold move seems very appropriate for both the company, Chouinard and his family, as well as the current state of our planet. Not only this, but billionaire owners of corporations that claim to fight climate change while also being instigators and contributors of it, have been under a lot of scrutiny recently (and with reason).
But the relinquishing of the family fortune that Chouinard’s family has amassed over the years is very much in line with his love for the environment as well as his general eccentric approach to capitalism and disregard for business norms and greed for profit.
The hope is that this move impacts and potentially changes the ways capitalism makes the rich richer and the poor poorer — a battle that many are experiencing with ongoing economic crises and debilitating inflation.
The trust is designed to make sure that Patagonia follows through on its promise to run a socially responsible business and donate its profits. It will be supervised by family members and their closest advisors. The Chouinard family will pay around $17.5 million in taxes on the shares they donated to the trust — which is equivalent to 2% of the overall shares.
The other 98% of Patagonia is now a part of a newly established nonprofit organization called the Holdfast Collective, which will be getting all the company’s profits and will be utilizing these funds to combat climate change. Seeing as this nonprofit is a 501(c)(4), it is allowed to make unlimited political contributions.
Chouinard wanted to ensure that Patagonia stayed true to its principles and its core values as detailed on their website: “Cause no unnecessary harm: We know that our business activity — from lighting stores to dyeing shirts — is part of the problem. We work steadily to change our business practices and share what we’ve learned. But we recognize that this is not enough. We seek not only to do less harm, but more good.” As well as using business to protect nature and to not be bound by convention. This, after all, is a brand built by climbers and nature lovers.
This honorable and endearing move seems not only necessary but urgent for the times we live in. So the next time you purchase an item from Patagonia, know that you will be directly contributing to the fight for ending climate change.
This is not the first time Patagonia has taken a political stand, Patagonia clothing labels read “VOTE THE ASSHOLES OUT” in 2020, and in case you missed it, climate activists are gluing themselves to art as an act of protest.
Photo via Patagonia