Patagonia founder Yvon Chouinard has given the billionaires and founders of the world a fast lesson in their responsibilities to the planet this week.
He has announced he’s giving away his outdoor apparel brand Patagonia, in order to help fight the climate crisis.
The 84 year old Chouinard made the announcement via an open letter and video shared across social media. The move sees him signing away his family’s ownership of the US$3 billion ($4.4 billion) Patagonia to a non-profit organisation.
He says the money the business makes will be distributed as a dividend to initiatives that aim to help fight the climate crisis. The New York Times reports that under the new structure, neither the founder nor his family will financially benefit – rather, they will face a tax bill as a result of the donation.
Chouinard shares how they considered different paths for the company, including the idea of going public. But instead decided to go “purpose”. That purpose, as the website puts it, is that: “we’re in business to save our home planet.”
It’s an inspiring move, up there with the greatest philanthropists of our time. But this move doesn’t come from a founder who is only just starting to consider his legacy, or one starting to make moves on his wealth while considering his retirement.
Patagonia has long held a reputation built on purpose and progressive causes. It was and is known as doing more than any other retailer to resist Trumpism, and running a significant campaign during the last presidential elections. Following the murder of George Floyd in May 2020 and the Black Lives protests that followed, Patagonia was upfront about declaring itself a “white-led outdoor company reliant on recreation on stolen Native lands that are not yet safe for all.” It decided it must confront its own lack of progress and take ownership for its failures. It has stood up to presidents, to media outlets and even started a spending boycott of Facebook to pressure the social media giant to fix its products.
Patagonia also promotes a strong family-friendly culture and workplace – arguably beating every other major US employer when it comes to policies for supporting team members. Its home office in California is reported to be a place where parents regularly bring kids to work, and coworkers get to know the families of other co workers. They have strong paid parental leave policies, with an on-site childcare centre available to all families that has been in operation for decades. The company has also previously boasted impressive, eye-watering, records for the retention of new parents.
The new company will be governed by The Patagonia Purpose Trust, which has voting power to approve key decisions including board members and changes to its legal charter. The letter announcing the move stated the Trust will ensure the company stays true to its purpose forever. The current CEO Ryan Gellert will continue in the role.
“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 letter stated.
Chouinard founded the company in the late 1950s, initially creating products based on materials found in a junkyard, before moving into apparel in the 1970s (following a stint served in the Korean War). It started sharing a portion of profits back to environmental preservation in the mid 1980s, and has been doing so ever since.
On a video posted to social media, the founder carefully wrote the quote on a piece of paper: “Earth is now our only shareholder.”
“Not a lot of people understand how serious we are about saving the planet,” he said. “I am dead serious.”
Chouinard’s experienced an incredible life and career to be known as one of the greatest entrepreneurs of our time. He is one that should be celebrated for his innovation around how-to-build a business, create a great, supportive company culture, and do capitalism in a way that supports the planet. All while achieving a stunning legacy.