Patagonia founder Yvon Chouinard, who has previously expressed reluctance to amass wealth, is donating his company.
The outdoor clothing business will now be in the hands of a trust and a non-profit organization. All future profits will be donated to help fight climate change, the company announced on Wednesday.
“It’s been half a century since we started our responsible business experience,” said Chouinard, 84. “If we have any hope of a prosperous planet 50 years from now, it requires that we all do everything we can with the resources we have. As the business leader I never wanted to be, I do my part.”
He added: “Instead of extracting value from nature and turning it into wealth, we are using the wealth created by Patagonia to protect the source. We are making the Earth our sole shareholder. I am very serious about saving this planet.”
The Patagonia Purpose Trust will control all of the company’s voting shares (2%), while Holdfast Collective, a climate change nonprofit, will own all of the non-voting shares (98%).
Chouinard, who is currently a board member, said in a statement that in trying to tackle climate change, he realized his company was contributing to it. So he had thought about what to do with the business.
One option was to sell it and donate the money, but Chouinard said he was worried the new owners might not have the same values or keep the same employees. The other option was to become a publicly traded entity.
“What a disaster that would have been,” he said. “Even public companies with good intentions are under too much pressure to create short-term gains at the expense of long-term vitality and responsibility.”
The company will continue to donate 1% of its profits to grassroots environmental groups, and management will not change.