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Journalism of Courage
Yvon Chouinard, the billionaire owner of American outdoor apparel firm Patagonia, has decided to give away ownership of the company, valued at nearly $3 billion, to fight climate change. The company also changed its Twitter bio or profile description to “Earth is now our only shareholder”.
Patagonia has been associated with climate issues for years; it has been giving away 1 per cent of its annual sales (worth $100 billion) to environmental activists for years. Now, Chouinard, his wife and two adult children have transferred the company’s entire non-voting stock to a non-profit organisation. All profits earned henceforth by Patagonia, which is famous for its hiking gear and outdoor clothes, will go to Holdfast Collective, an American charity working towards saving the environment.
According to The New York Times, Chouinard, 83, was once a rock climber who lived out of his car and ate cans of cat food to survive. Even today, he drives an old car and doesn’t have a computer or a cell phone, according to the report. On his decision to give away his fortune, Chouinard told the NYT, “Hopefully, this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people.
Chouinard said his plans to use his wealth to do more for the environment were accelerated by Forbes listing him as a billionaire, and how uncomfortable he felt with the title.
Chouinard initially planned to sell his company and donate the entire amount to charity. He even considered taking the company public. But he feared that a public company would not be able to focus on Patagonia workers’ well-being and also fund climate action, according to the NYT.
For now, the Chouinard family has given away all its assets to two different firms. As much as 100 per cent of the company’s voting stock will be transferred to Patagonia Purpose Trust and 100 per cent of the non-voting stock will go to Holdfast Collective, the organisation dedicated to fighting climate change.
The funding for Holdfast Collective will come from Patagonia, and all profits the business makes each year will be used to fight climate change. The annual profits, estimated to be nearly $100 million a year, will be used to tackle climate issues and protect undeveloped land.
Chouinard had earlier donated $50 million to the non-profit and is set to give $100 million more this year. With these hefty donations, Holdfast Collective is slated to become one of the biggest players in climate action. His children will remain associated with the company, as employees on its payroll, but no share of any of the profit in the future will go to them.
Not only will the Chouinard family not get any tax breaks for its decision to give away its wealth, but it will also instead have to pay nearly $17.5 million in taxes as the amount it transferred to the Trust will be considered as a ‘gift’ under American law.
In an open letter on Wednesday, Yvon Chouinard stated, “… In 2018, we changed the company’s purpose to: we are in business to save our home planet. While we are doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact.”
“… Truth be told, there were no good options available. So we created our own…,” he stated in the letter.
