By: Ethan Pu
Yvon Chouinard, the owner of the famous outdoor clothing company Patagonia, declared in September that he is donating his company to a nonprofit organization for environmental protection and a specially designed trust. Mr. Chouinard is an avid rock climber passionate about preserving the environment. He started Patagonia in the 1970s and has donated 1% of the profits to environmental efforts since 1986. His desire to protect the environment has influenced the way he did business such as the materials used in his clothing.
In a recent transaction, Chouinard has given 2% of Patagonia to a small group called the Patagonia Purpose Trust. Mr. Chouinard’s family and advisers will oversee this group, which will make all the decisions about the way the company is managed, particularly by keeping a commitment to running a socially responsible business and giving away profits to support climate philanthropy. The other 98% of the company will go to a non-profit organization called the Holdfast Collective. The profit that Patagonia makes, estimated at about $100 million a year, will be used to combat climate change and preserve wild lands.
Despite old age, the billionaire continues to target for his goal. When explaining his decision to donate to his company, Mr. Chouinard notes that he does not mind how much money he is giving away to people as long as they are actively helping to protect the planet. His estate planning is also driven by his long standing disregard for capitalism. “hopefully,” he says, “this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people.”
As one of the few wealthy business owners who give away their companies for philanthropic and political causes, Mr. Chouinard sets a remarkable example in light of the growing controversy on social justice and business ethics. There may not be an ideal solution, but at least it is for Mr. Chouinard, “I feel a big relief that I’ve put my life in order…For us, this was the ideal solution.”