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“Earth is now our sole shareholder.”
This is how the . begins public letter written by billionaire Yvon Chouinard. In it, the American businessman announces his decision to donate the company he founded nearly half a century ago to the fight against climate change.
Chouinard, 83, is the founder of Patagonia, the California-based outdoor clothing and equipment company estimated to be worth $3 billion.
Patagonia has already donated 1% of its annual profits to environmental organizations and groups. But more had to be done, says the businessman in his message.
“If we have any hope for a prosperous planet, let alone a business, we will all have to do what we can with the resources we have.”
Property of Patagonia will be transferred to a trust and an organization without purposes gain.
And any profits that aren’t reinvested in running the business will go toward fighting climate change.
Chouinard estimated that the profit to be donated for this purpose will be approximately: $100 million a yeardepending on the health of the company.
“Instead of taking value from nature and turning it into wealth for investors, we are using the wealth that Patagonia generates to protect the source of all wealth,” the businessman says in his letter.
A new solution
Chouinard says he initially considered selling the company and donating all the money earned to environmental organizations.
“But we couldn’t be sure that a new owner would keep our values or our employees around the world,” he said.
Another option was to put the company on the stock exchange through a so-called takeover bid, an operation on the stock exchange to sell all or part of the shares.
“It would have been disastrous. Even well-meaning public companies are under a lot of pressure to make a profit in the short term,” says Chouinard, who opted for a new solution instead.
100% of the voting shares of the company will be transferred to: a trust, Patagonia Purpose Trust, established to protect the company’s values; and 100% of the non-voting shares will be delivered to the Holdfast Collective, a non-profit organization dedicated to fighting the environmental crisis and protecting nature.
“We had to find a way to invest more money in the fight against the environmental crisis while keeping the company’s values intact,” adds the businessman.
“We can save the planet”
Patagonia was born in 1973, when Chouinard turned his passion for climbing into his source of income.
“I never wanted to be a businessman. I started out as a craftsman, making climbing gear for my friends and myself, and then devoted myself to clothing,” says the businessman.
“As we witness the magnitude of global warming and ecological destruction, and our own contribution, Patagonia is determined to use our company to change the way business is done.”
The Patagonia brand has had a loyal following for decades for its sustainability campaigns, such as: offer a lifetime warranty on your clothing and repairs at reasonable prices.
A famous ad from the company was titled “Don’t buy this jacket” and asked consumers to think about the impact of their purchases on the environment.
The businessman ends his letter with a reflection.
“Despite their vastness, the Earth’s resources are not infinite and it is clear that we have exceeded their limits.”
“But it’s also resilient. We can save our planet if we commit.”
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