Patagonia is a company that’s always been on the cutting-edge of sustainability with environmentalism and love of nature being at its core.
There’s not much more former billionaire Yvon Chouinard, the founder of Patagonia, can do for the environment than to give the company away to combat climate change and protect nature.
Rather than selling the company or taking it public, Mr Chouinard, his wife and two adult children have transferred their ownership of Patagonia (valued around $3 billion) to a specially designed trust and nonprofit organisation. The trust is designed to preserve the company’s independence and ensure that all of its profits (on average $100 million a year) are used to combat climate change internationally and protect undeveloped land around the globe. This selfless act will have a lasting effect to help the environment.
The selfless act is refreshing to see compared to other billionaires choices and corporations actions. Many of which focus on maintaining a public image of doing good whilst hiding their real business practices.
Mr. Chouinard’s relinquishment of the family fortune is in keeping with his longstanding disregard for business norms, and his lifelong love for the environment. Mr Chouinard, an eccentric rock climber got his start in his parents back yard, forging steel pitons for climbing. Word got around through friends of his quality — he could forge two pitons an hour and sold them for $1.50 each. After living a very frugal and humble climbing lifestyle in his youth, Mr Chouinard went into business redesigning and improving almost all climbing equipment. The company grew, took on new goals and missions and has since become the $3 billion business it is today. An amazing achievement for a pioneering rock climber in California’s Yosemite Valley. The wealth contrast in extreme — the billionaire started in the 1960s living out of his car and ate damaged cans of cat food that he bought for five cents apiece.
Mr Chouinard prides himself on quality and design, having little to no economic motivation in his work. Their guiding design principle came from Antoine de Saint Exupéry, the French aviator: “In anything at all, perfection is finally attained not when there is no longer anything to add, but when there is no longer anything to take away, when a body has been stripped down to its nakedness.”
Mr Chouinard quickly became the largest supplier of climbing hardware in the United States in 1970, however, Patagonia gained a reputation for becoming somewhat of an environmental villain. This was because its gear was damaging the rocks. Fragile cracks appeared after the hammering of pitons during placement and removal. In 1972, Mr Chouinard decided to do something about it, creating and popularising the amazing alternative of aluminium chocks that could be wedged by hand rather than hammered in and out of cracks. Since then, Patagonia published many environmental research papers and has made numerous other commitments to sustainability.
The company has given away 1 percent of its sales for decades, mostly to grass roots environmental activists. And in recent years, the company has become more politically active, going so far as to sue the Trump administration in a bid to protect the Bears Ears National Monument.
Patagonia will continue to operate as a private, for profit corporation, selling more than $1 billion worth of jackets, hats and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company. The family irrevocably transferred all the company’s voting stock into a newly established entity known as the Patagonia Purpose Trust. The trust, which will be overseen by members of the family and their closest advisers, is intended to ensure that Patagonia makes good on its commitment to run a socially responsible business and give away its profits. Because the Chouinards donated their shares to a trust, the family will pay about $17.5 million in taxes on the gift.
The Chouinards then donated the other 98 percent of Patagonia, its common shares, to a newly established nonprofit organization called the Holdfast Collective, which will now be the recipient of all the company’s profits and use the funds to combat climate change. Because the Holdfast Collective is a 501(c)(4), which allows it to make unlimited political contributions, the family received no tax benefit for its donation.
Dan Mosley, a partner at BDT & Co outlined “There was a meaningful cost to them doing it, but it was a cost they were willing to bear to ensure that this company stays true to their principles.”
Patagonia has already donated $50 million to the Holdfast Collective, and expects to contribute another $100 million this year, making the new organisation a major player in climate philanthropy.
As for how the Holdfast Collective will distribute Patagonia’s profits, Mr. Chouinard said much of the focus will be on nature-based climate solutions such as preserving wild lands. And as a 501(c)(4), the Holdfast Collective will also be able to build on Patagonia’s history of funding grass roots activists but it could also lobby and donate to political campaigns.
About Us
Our name is Valuuti and we want to do some good in the world and help fight climate change.
We’re a small start-up brand with an important mission — help nature and fight climate change! Specifically, we want to work with endangered animal charities, plant trees, clean up beaches and start/aid carbon capture and other environmental regeneration projects.
We also want to increase awareness through our environmental blog — talking about important issues, environmental wins and Valuuti updates. Please follow us along for our journey!
In the next few months, we’re launching our sustainable clothing brand, each design linked to its own unique cause and charity. We’ll have:
- Tree hoodies that when purchased, a real tree will be planted.
- Elephant hoodies that support Elephant Conservation charities
- Other services that will fund climate projects and general ideas that do good.
Thank you for reading and we hope you follow our journey!
The Valuuti team.
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This post was previously published on MEDIUM.COM.
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