“The Earth is our sole shareholder”: the boss of Patagonia bequeaths everything to an NGO

The Patagonia company, which produces outdoor clothing, is not being sold to a successor or launched on the stock exchange: all its profits will now be donated to a new environmental NGO. A unique case of its kind.

« The Earth is our sole shareholder “. That’s what proclaims a letter from Yvon Chouinard sent to more than 3,000 employees and published online. The 83-year-old is the founder of Patagonia, a successful brand for clothing suitable for outdoor activities.

Selling your business by collecting the money from the estate? No. List Patagonia on the stock market? No more. ” We will give the maximum amount of money to those who are actively working to save this planet “, explains Yvon Chouinard in an exclusive interview au New York Times.

Yvon Chouinard. // Source: Official Patagonia photo

« I didn’t want to be a businessman. Now I could die tomorrow and the company will keep doing the right thing for the next 50 years, and I don’t have to be here. he says. But what form does this approach take?

$100 million per year

Ownership of Patagonia was transferred to two new structures — a trust and an NGO — created specifically for actions in the fight against climate change. Everything has been secured so that all of the company’s profits are donated. That’s $100 million a year.

In practice: every year, Patagonia will carry out all the ” investments necessary for the sustainability of the company “. Then the remaining sum (about 100 million dollars) will be distributed in the form of dividends thanks to the two newly founded entities:

  • The first structure — the trust — now has all the shares with voting rights and owns 2% of the company. This is Patagonia Purpose Trust. His role will be to protect values of the company, and therefore to monitor that the allocation of profits does indeed go to the climate — that is, to the second structure.
  • The second is a new NGO called Holdfast Collective, she owns all the non-voting shares and owns the remaining 98% of the company. It will be the recipient of the profits and will be responsible for redistributing them entirely to environmental causes. Among them, “ the preservation of wild lands says Yvon Chouinard.

It should be added that insofar as the shares were donated to a trust, the Chouinard family (Yvon, his wife Malinda and their two children) will not benefit from tax advantages on this process. On the contrary, according to the calculations of the New York Times, they will pay about $17.5 million in taxes. Similarly, the form of the NGO authorizes unlimited political donations and does not allow for significant tax advantages.

“I have no respect for the stock market”

This action is actually in the continuity of the company, which manufactures its clothes according to an eco-design logic, with organic cotton in particular. Cotton is disastrous for the environment, in particular because of its water consumption and the use of chemicals which are dangerous for the soil and for the workers. Organic cotton still consumes a lot (too much) water, but is much less toxic to the environment and relies on better irrigation systems.

“A new form of capitalism”

Yvon chouinard

In addition, Patagonia has also given for several years 1% of its annual turnover to environmental NGOs, in addition to a commitment to recycling. It also has the B Corp certification granted according to social and environmental criteria. The newly announced new stage is therefore a continuation.

« Hopefully this will influence a new form of capitalism that doesn’t end with a few rich and a bunch of poor “, confides Yvon Chouinard to the New York Times. According to David Callahan, founder of the Inside Philanthropy site, quoted by the magazine, Yvon Chouinard’s approach is rare: most millionaires usually donate only a fraction of their fortune to causes.

This announcement can revive the ecological debate around the possible or impossible existence of a “green capitalism”: is it a real solution or is it inherently incompatible with ecology since capitalism is the very cause of the problem? This case, however, is unique and quite distinct from the question of greenwashing. Because it is also the fruit of a personality in its own right, Yvon Chouinard having always expressed his dislike for the status of businessman or millionaire – and this has visibly translated into action.

« I have no respect for the stock market “, he details in the interview. ” Once you are [lancé]you have lost control of the company, and you need to maximize profits for the shareholder, and then you become one of those irresponsible companies. »

Source: Numerama by www.numerama.com.

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