The founder of Patagonia’s outerwear manufacturer is donating his company to a larger cause: the fight against climate change.
Yvonne Chouinard, rock climber turned billionaire, and his family transferred their ownership of Patagonia to the newly created Patagonia Purpose Trust and the nonprofit Holdfast Collective. The company announced Wednesday that the two entities will ensure that all profits from Patagonia will go toward combating the climate crisis and protecting undeveloped lands around the world.
The company said Patagonia expects to generate $100 million in profits and donate annually, depending on the health of the company. The company, which Chouinard founded in 1973, is worth $3 billion, according to the New York Times.
Chenard himself has a net worth of $1.2 billion, as of Thursday morning. “Earth is now our only shareholder,” he wrote in a letter posted on the company’s website late Wednesday, adding, “While we do our best to address the environmental crisis, it is not enough. We needed to find a way to put in more money to address the environmental crisis.” crisis while keeping the company’s values intact.”
Accessing comment, a Patagonia spokesperson referred to CNBC Make It to the company’s announcement on Wednesday.
“The Patagonian Purpose Fund … exists to create a more permanent legal structure to enshrine Patagonia’s purpose and values,” the declaration states. “This will help ensure that there is absolutely no deviation from the founder’s intent and better facilitate what the company continues to do: demonstrating that capitalism can work for the planet, as a for-profit company.”
The company’s mission can be traced back to Chouinard’s humble beginnings. In the 1960s, he was a pioneering rock climber in California who lived out of his car and ate cans of damaged cat food he bought for 5 cents a piece, The Times reported. He was also a craftsman making climbing equipment and clothing for himself and his friends.
“I never wanted to be an entrepreneur,” Chouinard wrote in his letter, adding that he only realized “the extent of global warming and environmental destruction and our contribution to it” once he entered the apparel industry.
Today, Patagonia is a B Corporation, a designation given to private companies that meet the highest environmental, social and governance standards set by the global non-profit organization B Lab. As part of these efforts, Patagonia obtains environmentally friendly clothing materials and annually donates 1% of its total sales to grassroots activists.
The company plans to continue these efforts, according to Chouinard’s letter. As of this year, about 88% of its products are made from recycled or renewable materials such as recycled polyester and organically grown cotton, the company says.
Patagonia’s overall goal is to use 100% of these materials in its products by 2025. The company says it already uses 100% renewable energy in its stores, offices and distribution centers.
In 2019, the United Nations Environment Program recognized Patagonia for its commitment to environmental sustainability and advocacy. The company has also become more politically outspoken in recent years, suing the Trump administration in 2017 over plans to scale back several national monuments in Utah.
“Despite the enormity of the Earth, its resources are not infinite, and we have clearly crossed its limits,” Chouinard wrote on Wednesday. “But it’s also resilient. We can save our planet if we stick to it.”
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