The billionaire founder of the outerwear brand is transferring all of the company’s shares to a nonprofit dedicated to fighting the climate crisis.
The billionaire founder of the outdoor clothing brand Patagonia, known for its support of environmental causes, says he is ceding the company to a foundation that will use its profits to fight the climate crisis.
Yvonne Chouinard, 83, who is best known for alpine climbing in Yosemite National Park and has a net worth of $1.2 billion, could have sold the brand — worth $3 billion, according to the New York Times — or made it public. This was announced on Wednesday.
Instead, he, his wife, and their two children agreed to transfer all of the Patagonia’s voting shares, or shares that give its holder voting rights, in the company to a trust that is responsible for ensuring that the brand’s environmental values are respected.
All non-voting Patagonia shares have been transferred to a non-profit body dedicated to combating climate change and protecting and preserving nature. The company’s profits will also be donated to non-profit organizations.
Chouinard wrote in “The Earth Now Is Our Only Shareholder” open letter Posted Wednesday on the Patagonia website.
“I never wanted to be an entrepreneur,” he explained. “I started as a craftsman, making climbing gear for my friends and myself, and then dressed up.”
He added, “When we started seeing the extent of global warming and environmental destruction and our contribution to it, Patagonia committed to using our company to change the way business is done.”
Instead of “appearing in public,” you could say we’re “working on a goal.” Instead of extracting value from nature and turning it into wealth for investors, we will use the wealth that Patagonia creates to protect the source of all wealth.
– Patagonia September 14, 2022
Founded nearly 50 years ago, Patagonia quickly became committed to preserving nature, by carefully selecting raw materials and donating one percent of its sales each year to environmental NGOs or NGOs.
But Chouinard decided that this was no longer enough.
One option was to sell Patagonia and donate the money. “But we cannot be sure that the new owner will maintain our values or keep our team of people around the world employed,” he said in the letter.
Going public, he said, would have been a “disaster”: “Even well-intentioned public companies are under great pressure to make short-term gains at the expense of long-term vitality and responsibility.”
Patagonia will remain a company that cares about its financial health and will work with a board of directors and CEO.
The Chouinard family will no longer receive any money from the company but will remain on the board of directors and oversee the trust and direct the philanthropic work of the nonprofit.
After the announcement, members of the Board of Directors of Patugania celebrated the decision.
“Instead of exploiting natural resources to generate returns for shareholders, we are turning shareholder capital on its head by making land our sole shareholder,” said Charles Cohn, Chairman. open letter.
“As a closely held company, this huge change has been easier for us than for others. But the point is that companies make transparent commitments with a purpose that make sense for their business, and are accountable to their communities.”