Profits flow into environmental protection: Patagonia founder transfers his company to foundations
Founder Yvon Chouinard and his family have transferred all ownership rights in the Patagonia company to the Patagonia Purpose Trust and the Holdfast Collective. This means that from now on, every dollar that is not reinvested will be used to protect the planet.
At 83, Yvon Chouinard no longer makes compromises. "The earth is now our only shareholder," says the founder of the outdoor brand Patagonia, describing his motives for a special step that is being announced big and wide on the company's website. After 50 years in business, he is not monetising his company or taking it public. Instead, he is directing it so that in the future an estimated US$100 million a year will go to environmental projects and the company can continue in his spirit.
The Patagonia Purpose Trust now holds all voting shares. As of now, it has the decision-making power and is to protect the company's values. Already since 2018, the company's purpose has read, "We are in business to save our home planet."
Holdfast with a new purpose
The Holdfast Collective owns all non-voting shares. In future, it will be endowed with the profits that are not reinvested in the company or needed as a reserve for unforeseen events (such as the Corona pandemic). Every dollar received will be used to fight the environmental and climate crisis, to protect nature and biodiversity and to support communities active in environmental protection. And to do so as quickly as possible.
As a social welfare organisation recognised under US law, the Collective can also advocate for political causes. If you want to delve into the intricacies of the new corporate structure, you can find more information here. The bottom line is that Patagonia will remain a for-profit company. It's just that profit should serve the only goal that the founder believes there can be, even more so than before.
Wenn wir darauf hoffen wollen, in 50 Jahren einen lebenswerten Planeten zu haben, müssen wir mit den uns zur Verfügung stehenden Ressourcen alles unternehmen, was wir können. Als Geschäftsmann, der ich nie sein wollte, übernehme ich Verantwortung. Anstatt die Natur für den Profit auszubeuten, nutzen wir den Reichtum, den Patagonia schafft, um die Quelle allen Reichtums zu schützen: die Natur.
Source: Tom Frost
No sell-off of values
The no-longer-billionaire also comments on the decision as to why he thinks the foundations route is the right one. The company's value is about three billion US dollars. A sale followed by a donation would have brought a lot of money, but that would have meant giving up the company values: "We could not be sure that a new owner would maintain our values and continue to employ our people around the world," Chouinard writes.
A stock market flotation, he says, would have meant "a disaster" and pressure to make short-term profits. The businessman he never wanted to be, Chouinard is now no longer. Instead, he is one who, after five decades of "responsible entrepreneurship", consistently acts according to his convictions: "I am deadly serious about saving this planet," he is quoted as saying. He won't be able to do it alone. But he is leading the way and setting an example with his step.
Titelbild: Campbell Brewer
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