When you think about corporate social responsibility pledges toward the environment, you are typically reminded of donation drives and commitments toward becoming more “green”. This week, however, one business owner has just made the statement of a century by announcing that he will be giving away his entire company to fight the climate crisis.
Yvon Chouinard, the founder of Patagonia, has announced that he will be giving his sportswear company to a uniquely structured trust and nonprofit. The trust and nonprofit are designed to take all of the company’s profits and push them towards saving the planet.
“As of now, Earth is our only shareholder,” the company announced in a statement. “All profits, in perpetuity, will go to our mission to save our home planet.”
This means that the total amount the company makes at the end of each year, after reinvesting in the business, will be distributed as a dividend to help fight the climate crisis. This is estimated to come up to about US$100 million a year depending on the company’s health, according to Chouinard, who has an estimated net worth of US$1.2 billion.
“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,” said the 83-year-old. “This is another way we’ve found to do our part.”
Patagonia was founded in 1973, a few years after Chouinard made a winter climbing trip to Scotland where he purchased rugby shirts and later resold them to fellow climbing friends in the US. Today, it’s one of the world’s most successful sportswear and outdoor fashion brands in the world. Patagonia is estimated to make a revenue of US$1.5 billion this year.
“Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source,” added Chouinard.
The American environmentalist mentioned that he had initially considered selling Patagonia and donating the money to charity, or taking the company public.
However, he said both options would have meant giving up control of the business which he did not want to do.
“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 said.