Patagonia owner Yvon Chouinard donates company to charitable trust to fight climate change
It is a company that has always trodden its own path in its quest to help the environment – by asking customers if they really need to buy the items they sell.
Now the billionaire owner of outdoors brand Patagonia has donated the firm to a charitable trust in a bid to battle climate change and growing environmental challenges.
Yvon Chouinard has always insisted he never intended to be a businessman, having started Patagonia after making climbing gear for friends. He said his company’s previous efforts to help the planet – such as using materials that caused less harm to the environment and giving away 1 per cent of sales every year – were no longer enough.
Mr Chouinard said in an open letter to customers he had considered various options for the firm to monetise donations to environmental causes, including turning it into a public company, which he warned would have been “a disaster”.
He said: “While we’re doing our best to address the environmental crisis, it’s not enough. We need to find a way to put more money into fighting the crisis while keeping the company’s values intact.
"One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed. Truth be told, there were no good options available. So we created our own.”
In 2011, Patagonia took out a full page advert in the New York Times, urging customers "don't buy this jacket". The advert explained the environmental costs of manufacturing the item, and asked people to think twice before they bought one. It has run similar ad campaigns once a year since then.
Mr Chouinard said profits to be donated to climate causes will amount to around $100 million (£87m) a year, depending on company sales. Each year the money made after reinvesting in the business will be distributed as a dividend to help fight the climate crisis.
The businessman said: “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.”
He added: "It’s been nearly 50 years since we began our experiment in responsible business and we are just getting started. If we have any hope of a thriving planet – much less a thriving business – 50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part.
“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.”
Mr Chouinard said 100 per cent of the company’s voting stock would be transferred to the Patagonia Purpose Trust, created to protect the company’s values, while 100 per cent of the non-voting stock had been given to the Holdfast Collective, a non-profit dedicated to fighting the environmental crisis and defending nature.
John Lotspeich, Executive Director of Trillion Trees, a joint venture between WWF, WCS and BirdLife International focused on forests said, "This is an exciting development in exploring how to link environmental goals with the growing awareness of the responsibility business has to steward the natural world it draws resources from."
"We hope that the focus of the Trust will help evolve global business thinking towards longer term solutions that work for the planet as well as enterprise, particularly in focusing on protecting natural resources that we already have on our side, such as forests."
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