Yvon Chouinard announced Wednesday he is giving away his multi-billion dollar company, Patagonia.
Chouinard said instead of selling it or taking it public, Patagonia will be owned by a trust and nonprofit.
The trust is set up to ensure Patagonia's profits go towards addressing climate change.
Patagonia founder Yvon Chouinard is giving away the company by transferring it to a newly established trust and nonprofit in order to ensure its profits go towards combatting the climate crisis.
Chouinard, the rock climber-turned-billionaire, announced the move in a statement on Wednesday.
"Instead of 'going public,' you could say we're 'going purpose.' Instead of extracting value from nature and transforming it into wealth for investors, we'll use the wealth Patagonia creates to protect the source of all wealth," he wrote.
Chouinard, 83, said that he opted for the unique ownership model instead of selling the company to an owner that could potentially compromise Patagonia's values, or going public and leaving the company beholden to shareholders first.
Instead, ownership of the outdoor apparel company, valued at around $3 billion, is being transferred to the Patagonia Purpose Trust and Holdfast Collective.
"It's been nearly 50 years since we began our experiment in responsible business, and we are just getting started. If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we've found to do our part," Chouinard said.
Patagonia said going forward all profits that are not reinvested back into the company will be distributed to Holdfast Collective to go towards environmental causes, according to an additional statement provided to Insider. The company estimates this amount will total about $100 million each year.
—Patagonia (@patagonia) September 14, 2022
Founded by Chouinard nearly 50 years ago, Patagonia is well known for breaking with conventional business practices and for its commitment to sustainability.
In an interview with The New York Times about the decision, Chouinard said he hopes the move will "influence a new form of capitalism that doesn't end up with a few rich people and a bunch of poor people."
"We are going to give away the maximum amount of money to people who are actively working on saving this planet," he said.
Dan Mosley of merchant bank BDT & Co., who helped Patagonia structure the move, told The Times he's never seen anything like it: "In my 30 plus years of estate planning, what the Chouinard family has done is really remarkable."
"It's irrevocably committed. They can't take it back out again, and they don't want to ever take it back out again," Mosley said.
Chouinard and his family have given away most of their wealth throughout his lifetime, making them one of the most charitable families in the US.
Chouinard has also famously said that Patagonia's decisions that were good for the planet have also been good for business.
"I didn't know what to do with the company because I didn't ever want a company," Chouinard told The Times. "I didn't want to be a businessman. Now I could die tomorrow and the company is going to continue doing the right thing for the next 50 years, and I don't have to be around."
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