Yvon Chouinard, the founder of Patagonia, is transferring the company to a newly constituted trust and nonprofit in order to ensure that proceeds go toward combating the climate issue. Chouinard, the billionaire rock climber, revealed the decision in a statement.
“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 wrote.
83-year-old, Chouinard stated that he chose the unusual ownership model over selling the firm to an owner who may potentially compromise Patagonia’s ideals or going public and making the company first and foremost beholden to shareholders. Instead, ownership of the $3 billion outdoor gear firm will be given to the Patagonia Purpose Trust and Holdfast Collective.
“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,” Chouinard explained.
According to an extra statement supplied to Insider, Patagonia stated that going forward, all revenues that are not put back into the firm will be distributed to Holdfast Collective to benefit environmental causes. The business anticipates that this amount will be around $100 million per year.
Patagonia, founded nearly 50 years ago by Chouinard, is well renowned for defying standard business norms and committing to sustainability. Chouinard told that he thinks the ruling would “influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people.”
“We are going to give away the maximum amount of money to people who are actively working on saving this planet,” he stated.
“In my 30 plus years of estate planning, what the Chouinard family has done is really remarkable.” said Dan Mosley of merchant bank BDT & Co., who assisted Patagonia in structuring the transaction.
“It’s irrevocably committed. They can’t take it back out again, and they don’t want to ever take it back out again,” Mosley stated.
Chouinard and his family have given away the majority of their money throughout the course of his life, making them one of the most philanthropic families in the United States. Chouinard has also famously stated that Patagonia’s environmental decisions have also been excellent for business.
“I didn’t know what to do with the company because I didn’t ever want a company,” Chouinard explained to the reporters.”I didn’t want to be a businessman. Now I could die tomorrow and the company is going to continue doing the right thing for the next 50 years, and I don’t have to be around.”
