Patagonia Founder Donates Company to Fight Climate Change

• Posted on 29 September 2022
• By Steve Bates
• 0

Earlier this month, Patagonia founder Yvon Chouinard raised the bar for corporate environmental leadership when he and his family announced they would donate the entire company to fight the climate crisis. The outdoor apparel giant, one of the world's most successful sportswear brands, will be given to a trust and non-profit fighting for the cause.

"Earth is now our only shareholder.

If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have.

This is what we can do."

-Yvon Chouinard

Earlier this month, Patagonia founder Yvon Chouinard raised the bar for corporate environmental leadership when he and his family announced they would donate the entire company to fight the climate crisis. The outdoor apparel giant, one of the world's most successful sportswear brands, will be given to a trust and non-profit fighting for the cause. 

This donation is unprecedented, as Patagonia's assets are estimated to be worth $3 billion and $100 million in profit, both of which will go straight to fighting climate change and lobbying for social and environmental justice. Every dollar of profit from here on out will go directly towards saving our planet. 

In the company's announcement, Chouinard stated:

"As of now, Earth is our only shareholder (...) ALL profits, in perpetuity, will go to our mission to save our home planet."

"If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it will take all of us doing what we can with the resources we have (...) This is another way we've found to do our part."

Company History

Chouinard's passion for rock climbing began at a young age. He started Patagonia after a trip to the mountainous Patagonia region of southern Argentina in 1968. While experiencing the extreme weather conditions on that trip, he conceptualized an idea for a retail brand that would sell high-quality outdoor made with adequate insulation and water-wicking materials. 

Patagonia has long been a brand known for its environmental activism. In the early '80s, Patagonia began donating 1% of sales to environmental groups, and in 2001, they officially launched their "1% for the Planet Scheme". Recently, Patagonia changed its mission to state:

"We're in business to save our home planet."

Patagonia was also one of the first companies to meet the specific social and environmental standards required to become a certified b-corp company. 

The California company is also widely known for its company culture and employee benefits, like its on-site nursery. Patagonia has even been known to let employees have afternoons off when it's good surfing weather. 

"Going Purpose"

Chouinard has always had a self-proclaimed distaste for massive wealth and was mortified to be seen as a billionaire. In an interview with the New York Times, he stated, "I was in Forbes magazine listed as a billionaire, which really, really pissed me off. I don't have $1bn in the bank. I don't drive Lexuses." 

When Chouinard resolved to donate the company, he knew specific structures would need to be implemented. The Chouinard family established systems to ensure Patagonia could continue operating as a for-profit company, with all its proceeds going to environmental causes. The structure was also established to maintain company values and avoid selling or taking the company public.

Patagonia stated, "Instead of exploiting natural resources to make shareholder returns, we are turning shareholder capitalism on its head by making the Earth our only shareholder (...) Instead of going public, you could say we're 'going purpose' (...) 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 New York Times wrote, "The Chouinards are renouncing their status as one of the wealthiest families in America," and added that "it felt like a very un-billionaire-like way to fight climate change."

2% of stocks and all decision-making authority have been allocated to a trust overseeing the company's mission and values. The rest of the 98% of the company's stock will go to the Holdfast Collective, a non-profit that "will use every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible." Patagonia will donate the money it makes each year to be distributed to the non-profit and help fight the environmental crisis.