Products of Change

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Thu 15 Sep 2022 | by Rob Hutchins

Patagonia donates entire business to fight Earth's climate crisis

In a continuation of its mission to reshape the face of corporate leadership, the billionaire owner of Patagonia is making his biggest donation to the fight against the Earth’s climate devastation to date: the entirety of the Patagonia business. In an unprecedented and landmark move for any brand, Patagonia founder Yvon Chouinard is giving the entire company to a uniquely structured trust and non-profit both of which are designed to put all the company’s profits into saving the planet. “Earth is now our only shareholder,” Yvon announced in a statement issued on the Patagonia website. “If we have any hope of a thriving planet – much less a business – it is going to take all of us doing what we can with the resources we have. This is what we can do.” The arrangement will see 100 per cent of the company’s voting stock transferred to the Patagonia Purpose Trust, an entity that has been created to protect the company’s values of purpose, while 100 per cent of the nonvoting stock has been given to the Holdfast Collective, a non-profit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia and each year the money the company makes after reinvesting in the business itself will be distributed as a dividend to help fight the climate crisis. In his statement issued this week, Yvon admitted that he “never wanted to be a businessman”, but started as a craftsman, making climbing gear for his friends before getting into apparel. “As we began to witness the extent of global warming and ecological destruction, and our own contribution to it, Patagonia committed to using our company to change the way business was done,” he writes. “If we could do the right thing while making enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way. “While we’re doing our best to address the environmental crisis, it’s not enough. We need to find a way to put more money into fighting the crisis while keeping the company’s values intact. 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. “Truth be told, there were no good options available. So we created our own. “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. “Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it.”