‘Taking the company public would be a disaster’: Patagonia founder gives his company away

Patagonia founder, long-term environmentalist and “reluctant billionaire” Yvon Chouinard is putting his life’s work where his mouth is by giving away his $3 billion company in an audacious bid to tackle climate change.

Chouinard says Patagonia’s non-voting stock will go to a collective that will skim every dollar of profit off the top of the business operations to invest into projects and organisations that protect land and biodiversity.

But it’ll be jackets-as-usual for Patagonia’s private for-profit operations, based in California with a network of shopfronts on all five continents generating revenue upwards of $1 billion a year.

In a letter about the monumental announcement, published on the Patagonia website on Wednesday, Choiunard says the company’s efforts to address the environmental crisis were good but “not enough”.

“We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact,” he wrote.

Choiunard says he considered selling Patagonia and donating all the proceeds to environmental organisations, but they were conscious a new owner may not retain Patagonia’s unique values, or its workforce.

“Another path was to take the company public,” he wrote.

“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.”

Chouinard founded Patagonia in 1973, and the avid rock climber became known as a “reluctant billionaire” as his outdoorsy store grew to a multinational company with factories in 16 countries.

But in many ways, he has stayed true to his roots, from living out of his car and eating cat food in the ’60s, to not owning a computer or phone, driving a beat-up Subaru and wearing raggedy clothing nowadays.

Meanwhile Patagonia became known as the anti-hero of capitalism. The company famously discouraged customers from buying its apparel with a splashy Black Friday ad that simply read “Don’t Buy This Jacket”.

“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, 83, told 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.”

Patagonia’s founding family — Chouinard, his wife Malinda, and their children Fletcher and Claire — transferred all the company’s voting stock (2% of all shares) into the Patagonia Purpose Trust.

It’s an entity that will keep Patagonia honest about its socially responsible operations and profit donations, though the family will pay the equivalent of $25.9 million in taxes on the gift because the shares were donated to the trust.

The other 98% was donated to not-for-profit Holdfast Collective which will put Patagonia’s profits into climate ventures.

One might assume Fletcher and Claire, the biological heirs to the business, would be disgruntled by the move, but it was quite the opposite. Neither wanted the company, Patagonia’s chief executive Ryan Gellert says.

“It was important to them that they were not seen as the financial beneficiaries,” he continued.

“They felt very strongly about it. I know it can sound flippant, but they really embody this notion that every billionaire is a policy failure.”

The Chouinards are new entrants in a growing list of billionaires parting with their wealth in the name of civic responsibility. Bill Gates pledged to part with “virtually all” of his wealth, while Meta’s Mark Zuckerberg made a 2015 pledge to donate 99% of his Facebook shares for charity.