Billionaire founder of the outdoor apparel brand Patagonia, Yvon Chouinard, is giving away his entire company to a trust that will use its profit to fight the climate crisis.
His company is worth around $3 billion, the New York Times reported.
In an open letter on the company's website Chouinard said that instead of selling or going public, he and his family have given away Patagonia to a non-profit organisation which has been specially developed to help fight climate change.
In his open letter titled "Earth is now our only shareholder," Chouinard, 83, mentioned, "Truth be told, there were no good options available. So, we created our own.”
Chouinard wrote that the option to sell was available, but he couldn’t be sure that the new owner would maintain the company’s values or keep their employees who are working around the world.
He added that Patagonia could have also gone public, but he considered the move could be an inevitable "disaster." Thus, the Chouinard family created their own purpose. He explained, "Instead of ‘going public, you could say we are 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."
In August, Patagonia’s voting stock (2 percent of the shares) which was previously owned by his family, was transferred to the new Patagonia Purpose Trust. The trust aims to guarantee the company's vision and morals to run sustainable businesses.
The other 98 percent of Patagonia's common shares are now transferred to a newly established non-profit organisation called the Holdfast Collective. The non-profit will now receive all the company’s profits and use the funds to fight climate change.
"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," Chouinard mentioned in his letter.
Meanwhile, Patagonia will continue to operate as a private, for-profit corporation, but the Chouinard family will no longer own the company.
Chouinard is known to be a rock climber, environmentalist, and philanthropist. He is also a surfer, kayaker, and falconer and is particularly fond of tenkara fly-fishing.