The philanthropist and owner of a famous clothing brand was "horrified" by his position as a billionaire and donated his $1.5 billion company in the name of combating climate change.
The billionaire owner of Patagonia announced on Wednesday that he is donating the entire business to help stop the destruction of the Earth's climate, setting a new standard for environmental corporate leadership.
Yvon Chouinard, the owner of one of the most famous sportswear companies in the world who founded Patagonia out of his passion for rock climbing, is giving away the entire operation to a non-profit trust with a unique structure that will use all of the company's profits to protect the environment.
The business declared in a statement that Earth is currently its only shareholder.
Indefinitely, all profits will support their effort to "save their home planet."
Yvon Chouinard
The 83-year-old Chouinard collaborated with teams of business lawyers, his wife, and their two children to design a framework that will enable Patagonia to carry on as a for-profit business, with the proceeds going toward environmental causes.
It will take everyone doing what they can with the resources they have if the company is to have any chance of having a thriving planet, let alone a thriving business, in 50 years.
The business has discovered yet another way to play its part.
The Chouinard family gave a trust that will be in charge of the company's vision and values 2% of all the stock and all the decision-making power.
The Holdfast Collective, a non-profit organization, will receive the remaining 2% of the company's stock and use it as quickly as possible to fight the environmental crisis, preserve biodiversity and nature, and support thriving communities.
Patagonia
The profit Patagonia makes after investing it back into the company will be given to the non-profit each year to aid in the fight against the environmental crisis.
The structure, according to the statement, was created to prevent the company from being sold or going public, which could have resulted in a change in the company's values.
Chouinard said that instead of "going public," the company is "going purpose."
Instead of taking value from nature and resources and turning it into just income for investors, the company will use the income Patagonia generates to protect the source of all fortune.
According to Charles Conn, Patagonia's board chair said in an opinion piece published in Fortune magazine on Wednesday, the company's new strategy is intended to demonstrate the fallacy of the old shareholder capitalism axiom that businesses with objectives other than profit will only confuse investors.
He wrote that the business is reversing shareholder capitalism by making the Earth its sole shareholder, rather than exploiting natural resources to increase shareholder returns.
Chouinard and Patagonia have long been pioneers in employee benefits and environmental activism.
The Ventura, California-based business has a reputation for offering its staff a wide range of benefits, such as on-site nurseries as well as afternoons off on days with good surf.
One of the famous slogans of Patagonia is the "Don't Buy This Jacket" campaign.
The purpose is to promote environmental awareness, asking the shoppers to be conscious of the environmental costs of some products.
1% for the Planet Scheme
The business started giving 1% of sales to environmental organizations in the 1980s; the program was formally known as the "1% for the Planet Scheme" in 2001.
According to the business, the program has raised $140 million in donations for the protection and restoration of the environment.
One of the first businesses to submit for certification as meeting specific social and environmental standards was Patagonia.
More recently, the company changed its mission to reflect its commitment to protecting the environment.
Chouinard, the notoriously eccentric businessman who built his company making metal climbing pitons and spent many years living out of his van at climbing locations, reportedly felt horrified to be listed as a billionaire.
He claimed that the Forbes magazine's listing of him as a billionaire infuriated him because he didn't have $1 billion in the bank and didn't own a Lexus.
When it comes to charitable giving, the Chouinard family is at the forefront, as philanthropy and trust experts said to the New York Times.
David Callahan, the founder of the website Inside Philanthropy, said that given that the majority of billionaires donate only a small portion of their net worth each year, this family stands out significantly from the norm, The Guardian reported.
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