Reimagining Capitalism — Patagonia
Media today are reporting that Yvon Chouinard have basically given away their ownership interests in Patagonia to a trust and non-profit corporation. The earnings from those interests will be used to fund projects confronting climate change. The family didn’t undertake the transaction for tax benefits. In fact, had the family done this transaction as most of the hyper rich families do, they would have benefitted from a substantial tax break. So, this isn’t the typical play by a rich guy, but an honest philanthropic move to save the habitability of Earth for all its inhabitants.
This post is a link to a letter written by Yvon Chouinard to all of us, explaining what he’s doing and why. No firewall, but here’s the letter:
One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.
Another path was to take the company public. What a disaster that would have been. Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility.
Truth be told, there were no good options available. So, we created our own.
Instead of “going public,” you could say we’re “going purpose.” Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.
Here’s how it works: 100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature. The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.
It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started. If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part.
Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it.