climate crisis Economy Jessica Corbett

Patagonia’s Founder Found the Only Way to Be a Good Billionaire

“We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact,” Patagonia founder Yvon Chouinard wrote in a letter explaining his family’s ownership decision. [Patagonia/Facebook]

By Jessica Corbett | Common Dreams

Patagonia founder and “reluctant billionaire” Yvon Chouinard just raised the bar for corporate action on the fossil fuel-driven planetary emergency.

“Instead of ‘going public,’ you could say we’re ‘going purpose.'”

The 83-year-old, his wife Malinda, and their adult children, Fletcher and Claire, gave away the company, valued at about $3 billion. The rock climber-turned-businessman explained the decision in an interview published Wednesday by The New York Times, along with a letter on the outdoor clothing retailer’s website.

“While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact,” Chouinard wrote. “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.”

“Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility,” he continued. “Truth be told, there were no good options available. So, we created our own.”

As the Times detailed:

In August, the family irrevocably transferred all the company’s voting stock, equivalent to 2% of the overall shares, into a newly established entity known as the Patagonia Purpose Trust.

The trust, which will be overseen by members of the family and their closest advisers, is intended to ensure that Patagonia makes good on its commitment to run a socially responsible business and give away its profits. Because the Chouinards donated their shares to a trust, the family will pay about $17.5 million in taxes on the gift.

The Chouinards then donated the other 98% of Patagonia, its common shares, to a newly established nonprofit organization called the Holdfast Collective, which will now be the recipient of all the company’s profits and use the funds to combat climate change. Because the Holdfast Collective is a 501(c)(4), which allows it to make unlimited political contributions, the family received no tax benefit for its donation.

The newspaper noted that “Patagonia has already donated $50 million to the Holdfast Collective, and expects to contribute another $100 million this year, making the new organization a major player in climate philanthropy.”

Chouinard told the Times that “I didn’t know what to do with the company because I didn’t ever want a company,” and called the plan an “ideal solution” for his family.

“I don’t respect the stock market at all,” he explained. “Once you’re public, you’ve lost control over the company, and you have to maximize profits for the shareholder, and then you become one of these irresponsible companies.”

As he put it in the letter: “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.”

It was important to Chouinard’s children “that they were not seen as the financial beneficiaries,” he told the Times. “They really embody this notion that every billionaire is a policy failure.”

“I was in Forbes magazine listed as a billionaire, which really, really pissed me off,” he recalled. “I don’t have $1 billion in the bank. I don’t drive Lexuses.”

The family’s move was welcomed by climate action and conservation advocates.

“Wow,” tweeted Fossil Free Media director Jamie Henn. “Patagonia has long been an incredible ally in the fight for climate justice—they’ve offered their stores, funding, and advertising for mobilizations and more—but this takes it to a whole new level. Kudos to the entire team.”

“The world really can be different friends.”

Marine biologist and policy expert Ayana Elizabeth Johnson said she “could not be more proud to serve on the board of directors” of Patagonia, and celebrated that “as of now, Earth is our only shareholder—ALL profits, in perpetuity, will go to our mission to ‘save our home planet.'”

Chouinard suggested the innovative approach could inspire action from others in the business world.

“Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” he said. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”

Supporters agreed. Congresswoman Marie Newman (D-Ill.) simply tweeted: “More please.”

As poet Amanda Gorman pointed out Wednesday, “The world really can be different friends.”

18 comments

  1. The more you’ve literally hugged and or tended the earth, the bond is irrevocable. The author of Braiding Sweetgrass says – when you love the earth the earth loves you back. I agree whole heartedly. I know it to be true.I wonder how many of today’s billionaires have back packed, climbed, or had a serious garden during their earth time. I bet zero. Praises to this man and his adult children whose love of earth is being manifested in such a magnificently generous way. And thank you Scheerpost for featuring this news!

  2. “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.”
    Sadly, Mr Chouinard does not include labor value, only ‘nature’ as creating wealth. We cannot trust that these foundations will substantially help the effort to mitigate climate chaos, but I will be happy to wait and see. Still, when someone starts from a flawed premise, that person cannot offer a useful conclusion, no true solution can arise.

  3. Call me a skeptic.

    Perhaps this truly is grace, a wonderful enlightened act of kindness and caring for planet earth.

    But I will reserve judgement for now. I no longer trust anything I don’t witness with my own eyes.

    The information ecology is so polluted at this point what else can a rational person do.

    1. If you have no trust, you have no faith. If you have no faith, you have nothing.
      Nothing but a bankrupt soul. Please find it in your heart to believe in this man.

      1. This mornings feeding is late said one sheep to the other. But we trust and have faith that the farmer will deliver our nourishment soon, as the farmer readied them for slaughter.

      2. Kathleen thanks for the vicious attack.

        I refer you to an article in today’s Zero Hedge. It is entitled:

        Patagonia Founder’s ‘Donation’: Benevolent Planet-Saver Or Giant Tax-Dodge

        It explains how in doing what he did, Patagonia’s founder avoids 714 million dollars in taxes.

        I’m pretty sure I have a soul, and a good one. You…well you probably have a soul but very little brains.

  4. my astonishment is overwhelming me, the billionaires are a special cult of satanic worshippers with their evil corporations; so to hear this is unbelieveable

  5. Not knowing anything about this guy I saw the headline and expected an obituary.

  6. Good grief.

    As if Patagonia doesn’t greenwash enough, now we have dupes in the media running defense for its exploitative business and fawning over its oligarch founder.

    This article is disgusting in how it overlooks the fact that Patagonia long ago made the decision to outsource the vast majority of its production to parts of the world featuring desperate workers, inadequate protections for same and minimal or non-existent environmental regulations.

    As is obvious to anyone with a brain and the ability to think critically, companies like Patagonia exploit workers and ecological regions located in far away lands primarily to boost profits. The proof of this is the fact that post-off shoring, the prices these companies charge for their products remain the same or (often) increase (!).

    Patagonia and its founder represent the worst in terms of capitalists attempting to deny, minimize and distract from the violence they perpetrate against people and parts of the world least equipped to defend themselves.

    That a so-called “journalist” can’t (or won’t) see through this blatant smokescreen is appalling.

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