“The Earth is now our only shareholder. Yvon Chouinard, the eccentric founder of the sportswear brand Patagonia, left his empire, valued at $3 billion, to the fight against climate change, he announced to the New York Times and in an open letter. He transferred all the shares of the company to a trust and an NGO responsible for devoting all of the annual profits (about 100 million dollars) to the planet, in particular to the preservation of threatened habitats.
At 83, Yvon Chouinard, an American of Quebec origin, explains that he “never wanted to become a business man”. And even less a billionaire. “One option was to sell Patagonia and give away all the money. But we could not be sure that a new owner would maintain the job and our values,” he wrote. The other was an IPO, “which would have been a disaster.” “Even with the best intentions, listed companies are under pressure to make short-term profits at the expense of long-term vitality and responsibility,” explains the man who aspires to “reinvent capitalism”.
Supported by his children
Chouinard therefore asked his lawyers to be creative. In the end, he transferred the voting shares to a trust overseen by family members and advisers. The entity will be responsible for ensuring that Patagonia meets its commitments. All the rest of the shares (98%) have been bequeathed to a newly created NGO, which will receive the company’s annual profits. Patagonia therefore remains a for-profit company, but “every year, the money that we earn after having reinvested in the company will be distributed as a dividend to fight the (climate) crisis”, specifies the manager.
Unlike the charitable donations of many billionaires, this is not about tax optimization: the Chouinard family will even pay 17.5 million dollars in taxes on the shares transferred to the trust. The patriarch specifies that his two forty-year-old children, who will not inherit the family business, support him 100%.
An atypical boss
A seasoned mountaineer, Yvon Chouinard began in the 1960s by manufacturing his own pitons for climbing and then selling them, he who spent his time climbing the vertiginous facades of Yosemite, California. At the time, he slept in his car and ate dented canned food for cats, he says in his biography.
He began importing rugby shirts and then manufacturing sports and mountain clothing with Patagonia in 1973. But wool has a major problem: it becomes heavy and cold with humidity. That’s when he came across acrylic toilet seat carpet. He transforms it a few years later. The fleece jacket was born.
While Patagonia triples its turnover in a few years, Yvon Chouinard faces a dilemma: he has become an actor in this galloping consumerism which is depleting the planet. In 1985, he made a commitment to devote 1% of turnover to the environment. Then switched to organic cotton, grown without pesticides, and recycled polyester in the early 1990s. New York Timesduring Black Friday, in 2011, and the company has been boycotting Facebook’s advertising program since June 2020. Militant choices praised by customers and cited as an example in many business schools.
Today, Yvon Chouinard is no longer a billionaire. Almost a relief for someone who drives an old Subaru and doesn’t own a PC or a smartphone.