Yvon Chouinard, the “reluctant billionaire” and owner of outdoor apparel company Patagonia, as well as his spouse and two adult children have given away their ownership in the company. Chouinard founded the popular company in 1973 and now all profits from the company will go to to projects and organizations that are fighting climate change. According to The New York Times, the company is currently worth about $3 billion.
“It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have,” said Chouinard in a press release. “As the business leader I never wanted to be, I am doing my part. Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder. I am dead serious about saving this planet.”
An avid rock climber, Chouinard began his work by making metal climbing spikes for himself and his friends. He eventually pivoted to outdoor and recreational clothing, creating the enormously successful brand. The company is a certified B-Corp and California Benefit Corporation and already donating one percent of its annual sales to grassroots activists. There are fewer than 6,000 certified B-Corps, and to gain certification, they must meet strict environmental, social, and governance standards set by B Labs.
Patagonia made a splash with its marketing campaigns that urged consumers to buy only what they need and promote its Common Threads Initiative. Their “Don’t Buy This Jacket,” advertisement first ran in in The New York Times on Black Friday in 2011, a major shopping holiday and consumer bonanza.
Patagonia’s stock will be owned by a climate-focused trust called the Patagonia Purpose Trust and a group of nonprofit organizations known as the Holdfast Collective. Patagonia stressed that every dollar not put back into running the company will be “distributed as dividends to protect the planet.”
In a letter posted on the Patagonia website, Chouinard discussed making this decision, stressing that the planet’s resources are not infinite. “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.”
Another billionaire who made headlines for giving away wealth is Microsoft founder Bill Gates who vowed to “drop off” the world’s rich list in July and made a $20 billion donation to his philanthropic fund. Founder of the hi-fi chain Richer Sounds Julian Richer handed over 60 percent of his business to his staff in 2019 by placing shares in an Employee Ownership Trust.
This bold move could signal the start of a greater shift towards more environmental stewardship from corporations worldwide.
“The current system of capitalism has made its gains at an enormous cost, including increasing inequality and widescale uncompensated environmental damage. The world is literally on fire. Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty” Charles Conn, chair of Patagonia’s board of directors said in a press release. “They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.”