“Earth is now our only shareholder.”
Yvon Chouinard, former owner of Patagonia
What’s the opposite of greed? The owner of Patagonia showed us last week. Yvon Chouinard, the company founder and sole owner, made an extraordinary decision. Last week, he announced that instead of going public, Patagonia is “going purpose”. And that purpose is to solve climate change.
Earth: an unlikely shareholder
This announcement has taken the business world by surprise because it is so unconventional. In a world where keeping Wall Street happy is high priority, most companies are making decisions to maximize short-term profit. Mr. Chouinard has taken a much different stance.
Since the beginning, Patagonia has operated a bit differently than most companies. True, private companies are able to operate without some of the constraints of public ones, because they aren’t beholden to shareholders. But this company has long been doing business in a responsible and values-driven way, while still growing.
For example, the company donates 1% of its profits to environmental efforts. Also, they are a benefit corporation – or B corp, meaning they are focused on social responsibility. Further, their Worn Wear program encourages people to wear their items as long as possible, and only buy new things when truly needed. Customers can send items back to be repaired and returned to them, or recycled properly.
A worthy purpose
Instead of selling it, Mr. Chouinard gave ownership of the $3 billion dollar company to a trust and a nonprofit. Going forward, profits from Patagonia will be distributed from the trust to Holdfast Collective, “a nonprofit dedicated to fighting the environmental crisis and defending nature”. Because the nonprofit is a 501(c)(4), there was no tax benefit from the donation. A truly altruistic move.
Ripple effect
This announcement created a lot of buzz about climate change and the massive task we face. Let’s hope the news creates a ripple effect, and influences other companies and individuals to think about going purpose, and choosing to be part of the solution.
What can we do?
Even if you don’t own your own business, you have power as a consumer. We all have choices about what we buy and which companies we patronize. Something we can all do is try to buy from, and invest in, socially responsible companies.
Let’s do something about climate change. Learn about it. Think about it. Talk about it.