Many would have heard of the outdoor apparel brand Patagonia. But not many would have known about the man behind the brand — eccentric rock climber turned reluctant billionaire, Mr Yvon Chouinard.
Source: The New York Times
83-year-old Mr Chouinard has always had a very different take on business and capitalism than other billionaires, reported The New York Times.
In true Chouinard fashion, the Patagonia founder, along with his wife and two children, have now given the S$4.22 billion (US$3 billion) company to a specially designed trust and nonprofit organisation.
All of Patagonia’s profits – some S$140.6 million (US$100 million) a year – will go towards combatting climate change and protecting undeveloped land around the world.
The Chouinards, who controlled the company until August, now no longer own the company.
Instead of selling the company or going public, all of Patagonia’s voting stock has been transferred to Patagonia Purpose Trust.
Created to protect their values, the trust will be overseen by the Chouinards and their closest advisors.
In tandem with this, all of Patagonia’s non-voting stock – 98% of its common shares – has been given to Holdfast Collective. It is a nonprofit dedicated to fighting the environmental crisis and defending nature.
This will be funded by Patagonia. Besides money used to reinvest in the business, all profits will be distributed as dividends to help climate change.
According to The New York Times, this move means the Chouinards must pay about S$24.6 million (US$17.5 million) in taxes.
They also do not get a charitable deduction for it. But this was a meaningful cost the family was willing to bear to stay true to their principles.
In an open letter penned by Mr Chouinard himself, he said if we have any hope of a thriving planet, it will take all of us doing what we can with our resources. “This is what we can do,” he said.
Source: Patagonia
50 years after founding Patagonia, he proudly announced, “Earth is now our only shareholder.”
The billionaire shared that he never wanted to be a businessman. He was a craftsman who started making climbing gear for himself and his friends before branching into apparel.
However, over time, Mr Chouinard said they began to witness the extent of global warming and ecological destruction as well as their contributions to it.
Patagonia is committed to using the company to change the way business is done.
Mr Chouinard elaborated that they hoped to do the right thing while making enough to pay bills, ultimately influencing customers and other businesses, and maybe changing the system along the way.
The company started by using environmentally less harmful materials for their products and giving away 1% of sales each year.
More recently, Patagonia changed their company purpose to ‘We’re in business to save our home planet’.
But Mr Chouinard said this is not enough. They needed to find a way to put more money into fighting the environmental crisis while keeping the company’s values.
With no good options available, they created their own. Mr Chouinard exclaimed that it was an “ideal solution” for them. He finds it a huge relief that his life is now in order.
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Featured image adapted from Patagonia and Time.
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