American rock climber and businessman Yvon Chouinard is giving away his company, Patagonia, in order to play a part in fighting the world's ongoing climate crisis.
Chouinard, who founded the outdoor clothing and gear company nearly 50 years ago, has transferred his ownership of Patagonia to a newly established nonprofit organization and trust, designed to fuel all profits from the business into environmental and conservative efforts. According to The New York Times, his wife and two children have done the same; altogether, the company is valued at around $3 billion.
In a statement on Patagonia's website, titled "Earth is now our only shareholder", Chouinard announced the move, as well as the journey to making this decision. The founder and his team decided against selling the company or taking it public.
"Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth," the letter reads.
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The Chouinards donated 2 percent of their voting stock to the specially created Patagonia Purpose Trust, which the Times reports will be overseen by family members and their advisors. The remaining 98 percent of the company's common shares will go towards the newly founded Holdfast Collective, a nonprofit "dedicated to fighting the environmental crisis and defending nature".
Patagonia will continue to function as a private and for-profit organization. Funding for the Collective will come from Patagonia itself.
Meanwhile, Ryan Gellert will remain as CEO, overseeing the wider leadership team and the rest of the company's employees. The change in leadership will be seen via the Patagonia Purpose Trust, who will possess "additional stewardship", according to Patagonia's Q&A section.
"It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started. If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have," Chouinard continues in the statement.
"This is another way we've found to do our part."
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The largely unprecedented move sets Chouinard apart from the overwhelming majority of billionaires and their companies. He told the Times that he hopes "this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people." Chouinard also described his reluctance to be a businessman, to both the Times and in his letter, adding how he always wanted to shape his company in an ethical manner.
The California-based firm has donated 1 percent of its annual profits since the '80s, giving this portion of sales to organizations committed to protecting the environment. The Times reports Patagonia has already donated $50 million to the Holdfast Collective.
"Despite its immensity, the Earth’s resources are not infinite, and it's clear we’ve exceeded its limits," Chouinard concluded in the statement. "But it’s also resilient. We can save our planet if we commit to it."
