Patagonia founder gives away company, ensuring profits go to fight climate change

The founder of outdoor brand Patagonia gave up his ownership in the company and directed its profits to fight climate change.

Yvon Chouinard, who became famous for his alpine climbs in Yosemite National Park and then as an outdoor equipment manufacturer, transferred his family’s ownership of Patagonia to two new entities, one of them a non-profit organization that will use annual corporate profits to fight climate change, the company said in a press release Wednesday.

“Instead of extracting value from nature and turning it into wealth, we use the wealth that Patagonia creates to protect the source. We make the Earth our sole shareholder,” Chouinard, 83, said in the communicated.

In a letter to customers, Chouinard said Patagonia is now owned by a trust that will determine the company’s direction and a new nonprofit group called Holdfast Collective, which is dedicated to protecting nature and other environmental causes.

The management of the company has not changed.

“Although we are doing our best to deal with the environmental crisis, it is not enough,” Chouinard wrote. “…Each year, the money we earn after reinvesting in the business will be distributed as a dividend to help fight the crisis.”

The company plans to pay approximately $100 million to the Holdfast Collective through an annual dividend based on the companies’ success.

In a question-and-answer section appended to Chouinard’s letter, the company said Patagonia continues to be a for-profit company. a certified B Corpa designation for companies that consider factors such as the social and environmental impacts of their activities.

He also said the Chouinard family will continue to “guide the Patagonia Purpose Trust, electing and overseeing its officers” and serving on Patagonia’s board of directors. The company “will continue to do its best to be an excellent employer”.

Denis Hayes, who coordinated the first Earth Day and later became CEO of the environment-focused Bullitt Foundation in Seattle, said Chouinard had long been a vocal environmentalist willing to take bold action and challenge conventions. The Patagonia brand, Hayes noted, charges a premium, in part because of the values ​​it represents.

“Apparently they’re building it into the structure that will institutionalize this beyond his lifetime,” said Hayes, whose foundation operates a for-profit building that she says is the greenest in the world.

Hayes said companies in manufacturing or extractive industries in a capitalist economy that requires growth ultimately come up against conflicts with environmental and climate values.

“The concept of putting this together in a new structure and being experimental and bold is exactly the kind of innovation we need to try,” Hayes said.

Chouinard began selling climbing equipment such as peaks in 1957, usually out of his car.

Later, Chouinard became an advocate of so-called “clean climbing”, in which protective gear is placed and removed in rock faces so that it does not cause damage from hammering pitons.

He holds several patents, including one for aluminum climbing holds designed to cause less rock destruction.

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