Patagonia: Entire company donated to fight climate control

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Everyone knows the world is facing a climate crisis (and control) and while many agree we need to do what we can to help, how many actually follow through? We’ll tell you who Yvon Chouinard.

In 1973 Yvon Chouinard, an American rock climber, set up the outdoor apparel company Patagonia

Since then, the company has been hugely successful and was last valued at circa $3 BILLION. As the company’s success grew, so did Chouinard’s own net worth, and when it was reported that he was a billionaire, much to his disgust, he told the  New York Times that he was “horrified to be seen as a billionaire.” Not many people (maybe none) have such a mindset. Despite all this success, Chouinard’s eco-focused ideals have remained as the company’s core principles.

Patagonia has a long history of focusing on sustainability, social activism and specifically environmental protection, with examples including offering lifetime guarantees on products, marketing campaigns asking potential customers to only buy what they need, annually donating 1% of the company’s sales to grassroots activists .

The company is also known for its focus on ensuring the well-being of its employees. Too good to be true, isn’t it? Hold on…

While Chouinard has managed to ensure that the company has remained committed to his idealistic principles, he is fully aware that without him or his family in charge of the company, this may not remain the case. Consequently, Chouinard turned his attention to preserving the ideals of the company he has grown over nearly half a century. 

Although he did consider selling or taking the company public and donating the profits to initiatives in line with his eco-centred interests, he decided that he couldn’t trust that the company, in the control of others, would remain committed to certain current company practices such as prioritising employee well-being.

Chouinard’s advisors considered many potential options with none really fulfilling all of Chouinard’s requirements, including the possibility of leaving the company to Chouinard’s children who were not interested in assuming full ownership of the company and the financial benefit that would entail. However, a crafty solution was finally devised that ticked all the boxes.

What else?

It was decided that the Chouinard family would transfer their voting stock in the company, amounting to 2% of the company’s stock, into Patagonia Purpose Trust, a trust that will be overseen by the family and which will ensure that the company continues to operate in the manner Chouinard has focused on all of these years. And just to be clear – this transfer was a donation, meaning not only did the family not make any money from transferring the shares but instead lost money as they still had to pay taxes on the donation.

The remaining 98% of the company’s shares would then be transferred to a non profit organisation called the Holdfast Collective, who will receive the company’s profits – estimated to be roughly £100 million a year – and “advocate for causes and political candidates and make grants and investments that fight environmental crises, protect nature and biodiversity and support thriving communities.” 

In essence, the company’s profits will be used to fight climate change

Not to mention, the company will continue its annual donation of 1% of sales to grass roots organisations – as guaranteed by the new arrangement.

In summary, Chouinard has found a way to ensure that the company will not only continue to operate with its founding principles in mind but also that the profits of the company will go to protecting our planet. Not only did this solution tick all the boxes, but it also created new boxes and ticked those too. Some people say you can’t have the cake and eat it. Chouinard clearly disagrees.

Chouinard and his family are a sterling example to today’s wealthy on how those who are so privileged can REALLY make a difference and put their money where their mouth is. While the jury is currently out on whether any others will follow in Chouinard’s footsteps, at the very least, everyone now has a new reason to buy a new jumper from Patagonia – buy a jumper, save the planet!

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