Yvon Chouinard, the billionaire founder of outdoor fashion retailer Patagonia, has given his company away to an environmental trust and non-profit.
Patagonia will continue to produce clothing, camping supplies and other goods but all profits will go to the organisations to fight climate change and pursue other environmental goals.
The company is well known for taking on a leading role in activism, particularly on environmental causes. “Instead of extracting value from nature and transforming it into wealth for investors,” Chouinard wrote in a public letter, “we’ll use the wealth Patagonia creates to protect the source of all wealth.”
Chouinard explained that he thought about selling Patagonia and donating the money to charity or taking the company public. But both options would have meant giving up control of the business. “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.
83-year-old Chouinard is a former rock climber and founded Patagonia in California in 1973. Since then, the company has grown into a multi-billion-dollar corporation. Patagonia’s estimated revenue was $1.5bn this year, while Chounard’s net worth is thought to be $1.2bn. “I never wanted to be a businessman,” he wrote. “I started as a craftsman, making climbing gear for my friends and myself, then got into apparel.”
During the Trump administration, the company’s activist role started to become much more prominent. Back in 2018, Patagonia said it would donate all the money it gained from tax cuts signed by then-President Trump to environmental causes. In 2017 the company joined a lawsuit attempting to stop the federal government from shrinking the Bears Ears and Grand Staircase-Escalante national monuments in Utah.
The new non-profit which will use the company’s earnings, The Holdfast Collective, is a type of non-profit that can make political donations. Therefore, the Chouinard family did not receive any tax break for its donation to the group, the New York Times reported.
“The current system of capitalism has made its gains at an enormous cost, including increasing inequality and widescale uncompensated environmental damage. The world is literally on fire,” Charles Conn, chair of the Patagonia board, said in a statement.
“Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty. They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.”