Last month, Yvon Chouinard, Patagonia founder, left the $3 billion company to fight climate change. He split the company into a climate-focused trust and nonprofit organizations. The manner in which he created these entities blocks future stakeholders from changing the company back or diverting this goal. All profits that are not reinvested into the business will be donated to the trust. In an effort to “reimagine capitalism”, he explained:
“While we’re doing our best to address the environmental crisis, it’s not enough. We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact. One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed.
Another path was to take the company public. 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.”
What other companies, if any, do you think will do this? Do you think this was a good idea or was there a better way to go about it? Do the tax benefits of 501 c3 organizations make this a more selfish option than it seems? Leave a comment on our Instagram and engage in the conversation!