The eccentric billionaire rock climber, whose company manufactures outdoor clothing, transferred his $3 billion in shares to a trust and a nonprofit that will ensure that all excess earnings — roughly $100 million per year — are leveraged to support climate and land preservation initiatives.
“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 in an interview with The New York Times. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
Chouinard, his wife, and his two children transferred Patagonia’s voting stock — roughly 2% of all shares — into the Patagonia Purpose Trust, which will be staffed by family members and advisers to ensure that the company gives away all profits. The Chouinards then donated all common shares — the other 98% of the company — to a new 501(c)(4) organization called the Holdfast Collective, which will receive all of Patagonia’s profits. The latter entity will be able to make political donations.
“Two years ago, the Chouinard family challenged a few of us to develop a new structure with two central goals,” Patagonia CEO Ryan Gellert said in a statement. “They wanted us to both protect the purpose of the business and immediately and perpetually release more funding to fight the environmental crisis. We believe this new structure delivers on both and we hope it will inspire a new way of doing business that puts people and planet first.”
In 2012, Patagonia became a “Benefit Corporation” — a designation granted by nonprofit group B Lab to companies with “an explicit social or environmental mission, and a legally binding fiduciary responsibility to take into account the interests of workers, the community and the environment as well as its shareholders.”
“I didn’t know what to do with the company because I didn’t ever want a company,” Chouinard, who is 83 years old, continued. “I didn’t want to be a businessman. Now I could die tomorrow and the company is going to continue doing the right thing for the next 50 years, and I don’t have to be around.”
In an article for Fortune, Patagonia Chairman Charles Conn encouraged other business leaders to orient their firms’ activities around sustainability. “Instead of exploiting natural resources to make shareholder returns, we are turning shareholder capitalism on its head by making the Earth our only shareholder,” he argued. “As a closely held company, this huge change was easier for us than others. But the point is for companies to make transparent purpose commitments that make sense to their business, and to be held to account by their communities.”
Conn rebutted the notion that his firm is engaging in “woke” capitalism — although he added that stakeholder capitalism is “the future of business if we want to build a better world for our children and all other creatures.”
Earlier this year, an exclusive poll from The Daily Wire showed that American investors would prefer that companies commit solely to the pursuit of profits. Although 29% of respondents agreed it is a “good thing” for companies to leverage their financial power for political or social means supported by executives, 58% said it is a “bad thing.”