The founder of Patagonia, Yvon Chouinard along with his family, have turned over their ownership of Patagonia to combat the issues of climate change. The company is estimated to be worth $3 billion, out of which roughly $100 million will be contributed yearly.
The company is prioritizing the climate crisis. The profits in a given year not reinvested in the company, will be attributed to the environment.
Until the decision to turn over ownership in the company was finalized, Patagonia was already making great strides to deal with the climate crisis. However, Chouinard decided that what the company was doing was not enough.
Chouinard considered different options—from taking the company public to selling the company entirely. Patagonia decided that their beliefs and values would stay best intact by creating their own option: turning over ownership to the Patagonia Purpose Trust.
While Chouinard’s decision appears to be for the greater good of the environment, the business world has had its speculations.
By not selling the company and turning over ownership to the Patagonia Purpose Trust, they are able to dodge paying roughly $100 million in taxes they would have paid had they sold the company instead. Ultimately, Chouinard’s decision has not only increased support in the cause Chouinard believes in, but the company itself.
What Chouinard has done with Patagonia will impact the future of businesses and how businesses handle their money.
Business teacher Janene Murphy envisions other companies will follow suit by supporting their own causes at a much larger scale. Murphy hopes businesses will “choose causes [Murphy believes] in, both as a consumer and a taxpayer.” This would help businesses to gain more support in their companies as well as the cause that they advocate for.
By dedicating a certain amount of profits—or in Chouinard’s case all profits—to a cause, consumers will feel more inclined to support those causes via purchases. “Consumers have another way to support the climate change cause outside of just giving it to a charity outright. They can ‘vote’ for the cause with their dollars,” Murphy continued.
It also should be noted that the majority of Patagonia consumers are invested in environmental issues, with many of their products being functional. The decision of Chouinard is supported by Patagonia’s consumers, who value taking action against environmental issues.
Junior Otto Hofmann is a consumer of Patagonia products and supports the decision made by Chouinard. “It’s actually pretty cool for such a huge business to take action against climate issues,” Hofmann stated. “I really like Patagonia as a consumer because they are true to their messages.”
The option to turn over the company reflects the beliefs of what Patagonia is by giving back to what consumers care about most, the environment.
In the future, it can be expected that businesses will contribute more of their profits to a cause, following in Patagonia’s footsteps. Patagonia has a bright future ahead of them as they keep the Earth as their only shareholder.
Cole Pearson • Sep 29, 2022 at 1:41 pm
I think it is a good decision to combat climate change and have a large corporation help out with the issue. However, I could see how turning the company over could be a business decision because they will dodge a lot of money in taxes. I’m not sure their true intention by turning the company over but ill believe its for good intentions until im proven wrong.