The founder of Patagonia just announced he and his family will be giving away their ownership of the company and dedicating all profits to fight climate change. The Apparel company is worth $3 billion and was founded nearly 50 years ago. Founder Yvon Chouinard wrote a letter announcing the decision and their want to help begin “reimagining capitalism.”
Source: NBC News/Youtube
Patagonia was already a certified B-Corp and California Benefit Corporation and even donated one percent of its sales each year to grassroots activists (which they will continue to do). But now, the company will take it even further. Less than 6,000 companies across the whole world are certified as B-Corp businesses. These businesses must meet environmental, social, and governance standards to gain certification.”While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact,” the letter read.
The privately held company’s stock will now be owned by a climate-focused trust, and a group of nonprofit organizations called the Patagonia Purpose Trust and the Holdfast Collective.
“Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”
“Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it.”
The Holdfast Collective owns all of the non-voting stock of the company, which amounts to 98 percent. Holdfast Collective is a 501(c)(4), which meant it can make unlimited political contributions, and the family received no tax benefit for its donation. The company expects to generate and Donate $100 million annually, depending on how business is going. Because the Chouinard family donated their shares to a trust, the family will have to pay about $17.5 million in taxes on the gift, The New York Times reported.
“Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” Mr. Chouinard, 83, said in an exclusive interview. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
Source: Climate One/Youtube
Chouinard founded Patagonia in 1973, but in the 1960s, he was a pioneering rock climber in California’s Yosemite Valley living out of his car and eating damaged cans of cat food that he reportedly bought for five cents each. Even after all of his success with the Apparel company, Chouinard continues to wear raggedy clothes, drive an old Subaru, and he does not even own a computer or cellphone.
When Chouinard was featured in Forbes magazine as a billionaire, he was not too happy.
“I was in Forbes magazine listed as a billionaire, which really, really pissed me off,” he said. “I don’t have $1 billion in the bank. I don’t drive Lexuses.”
The Forbes feature, along with the pandemic eventually led to the family making the decision to give away the company.
“I feel a big relief that I’ve put my life in order,” Mr. Chouinard said. “For us, this was the ideal solution.”
Ryan Gellert will continue to serve as the CEO of the company, and the Chouinard family will remain on the board.
The company’s website now reads, “Earth is now our only shareholder.”
We hope that other companies will be inspired by this heartwarming move!
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