Patagonia founder Yvon Chouinard is known for his love of the outdoors. It is this passion that eventually prompted him into building Patagonia, a $3 billion-dollar sportswear company that was known for its environment-friendly policies and practices. But recently Yvon Patagonia made news for how the entrepreneur secured the future of the company and the planet.
He transferred 98% of Patagonia shares to Holdfast Collective, a nonprofit that will deploy its roughly $100 million in annual profits “to fighting the environmental crisis and defending nature.” Meanwhile, the world is also working to reduce its carbon footprint and recently launched the largest carbon capturing plant in Iceland.
Who owns the company Patagonia?
Yvon Chouinard’s Patagonia was completely owned by his family, before the transfer. However, after transferring 98% of the shares, he moved the family’s 2% share to an entity called the Patagonia Purpose Trust.
The billionaire founder has always expressed his desire to better the planet and his aversion to accumulating wealth. He is part of a small but growing community of business leaders who are using non-profits to exert their influence lost past their lifetimes.
Yvon Chouinard’s Patagonia transfer is also a master lesson in shrewd investing. Holdfast is a non-profit that can make unlimited political donations but is not eligible for income-tax deductions. The move also saves Chouinard from having to pay federal capital gains taxes, which would have been the case if he had sold the company for profit.
He also managed to circumvent the US estate and gift tax, as he did not transfer the company to his heirs. The US estate and gift tax levies 40% of tax on gifts of large fortunes.
“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 Times. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
Is Patagonia financially successful?
Patagonia makes around $100 million in profits every year. However, while addressing the recent changes, Yvon Chouinard was quick to point out that the company’s mission statement says nothing about profits.
With sales of approximately $1 billion every year, the brand is one of the beloved sportswear brands around the world. It is also known for its fight against anything that harms the environment – oil drilling, deforestation, and ecosystem destroying construction.
Patagonia’s efforts are in line with its mission statement- “We’re in business to save our home planet.” Unlike other brands that often harp about its superior products or the services they offer, Patagonia has always been clear about what it wants to do – run a business that will help people preserve and appreciate nature.
Does Patagonia give back to the community?
Patagonia’s idea of service is to ensure that the planet is safe for future generations. The first true environmental campaign conducted by the company was against the Edwards Dam in the US. They then focused their efforts on “cleaning out their supply chain.
Through their Worn Wear program, the company also takes back products people return for recycling. Yvon Chouinard’s Patagonia is also mindful of the waste it generates and is constantly looking for ways to reduce, reuse, and recycle.
It is the flagbearer of sustainable fashion and has tailored its policies to be environment-friendly. By 2025, the brand aims to eliminate virgin petroleum fiber from its products. Also, they will shift to using completely reusable, home-compostable, and easily recyclable packaging. The company is also targeting net emissions and is working towards achieving net zero by 2040. Like Patagonia, the Brookfield Global Transition Fund is an investment fund that is looking to support economies to achieve net zero emissions.
Known as a considerate employer, it is also part of the Fair Labor Association, the Sustainable Apparel Coalition and B Lab coalitions that work for positive change in the industry.
