Patagonia founder Yvonne Chouinard, his wife and their two children are relinquishing their ownership of it. Now her profits will go to projects and organizations fighting to tackle climate change.
Chouinard, who is a famous American mountaineer, eco-activist and entrepreneur, founded Patagonia about 50 years ago. His company is valued at $3 billion, according to the New York Times.
In a letter posted on Patagonia’s website this Wednesday, Chouinard explained his decision as being prompted by a “rethinking of capitalism.”
While we are doing our best to deal with the environmental crisis, it is not enough. We need to find a way to put more money into fighting the crisis while preserving the company’s values. One option was to sell Patagonia and donate all the money. But we cannot be sure that the new owner will preserve our values or retain our team of people worldwide, the entrepreneur wrote.
Chouinard also had another option – to make the company public, writes CNBC.
What a disaster that would be. Even well-intentioned public companies are under too much pressure to create short-term profit at the expense of long-term viability and responsibility. To be honest, there were no good options. And that’s why we created our own path, the announcement added.
From now on, the company’s shares will be owned by a trust and a group of non-profit organizations that will fight climate change. They will be called Patagonia Purpose Trust and Holdfast Collective, respectively.
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Patagonia expects to generate and donate about $100 million each year, depending on business performance. It currently sells new and used sportswear, camping, fishing and climbing gear, as well as sustainably sourced food and drink.
As a certified B-Corp and California Benefit Corporation, Patagonia already donated 1% of its sales each year. She intends to continue to do so.
Fewer than 6,000 companies worldwide are certified as B-Corp businesses. They must meet strict environmental, social and governance standards and metrics set by B Labs to receive certification.
After announcing the change, the company updated its website to state that “Earth is now our sole shareholder.”