Giveaways are an impactful opportunity for companies to win customers’ hearts by making them buy stuff they probably don’t need. On the contrary, what if a whole company becomes a giveaway, but for the purpose of saving the world? How heroic would that be? This happened recently in August (2022) when the founder and owner of outdoor clothing and gear Patagonia founder Yvon Chouinard did exactly that: Donating his life’s work to fight the climate crisis. 

Without a big show, Patagonia founder Yvon Chouinard gave away his company with a simple announcement in an open letter on Patagonia’s website:

Earth is now our only shareholder.

What might be already old news in our modern world of constant news turnovers, is something I want to draw attention to – again. The act of giving Patagonia away to protect the environment is not something we should brush under the rug. Yvon Chouinard’s decision, which was probably a natural one for him, can usher in a new era: a business model which serves the people and the environment. It’s beautiful, and to be honest I have tears in my eyes right now because it gives me hope. Hope is a wonderful feeling when we are inspired and excited by change.

Our situation on Earth is precarious, which can mostly be traced to the economy. Finding new ways of making business is a milestone that has the potential to solve so many different crises. Firstly, let’s have a look at what it means that Patagonia’s shareholder is now the environment:

Patagonia Founder Yvon Chouinard gives company entirely away to fight the climate crisis

Since September 2022, all of the company’s stock has been in the hands of a trust and a nonprofit. The new owners of Patagonia are Holdfast Collective with 98% and the Patagonia Purpose Trust with 2% of the company’s voting stock. The responsibility of Holdfast Collective – or Collective – is to use every cent of the funding to fight the environmental crisis and defend nature. Any excess profit after reinvesting in the business goes into the fund.

The Patagonia Purpose Trust serves simply to the protection of Patagonia’s values and mission.

What are the motives to give Patagonia away to the environment?

Since its founding in 1973,  the Patagonia founder was always committed to changing the way business was done. As a passionate climber, Yvon Chouinard took it for granted that we depend on nature and not the other way around. His strong values committed him to addressing the environmental problems within his business.

Any excess profit goes to battle the many crises our planet has to endure. Overall, the aim of the Collective is to protect nature and biodiversity and to contribute to the thriving of communities as quickly as possible. Everything a good life and our well-being depends on.

Business as usual is not an option any longer

In 2018, Patagonia’s purpose changed: They were in business to save our home planet. Yvon Chouinard didn’t only acknowledge the severity of the environmental crises, but also committed to the well-being of his employees and communities. 

To conscientiously address the environmental crisis, there was the option to sell Patagonia and donate the money. The trouble with this option was the uncertainty of what a new owner would do. Would they continue Patagonia’s commitment to the planet and its people? Are Patagonia’s employees safe in the eye of such a change? The risk was too high, thus designating the environment as a shareholder was a brilliant idea. If we take care of nature, nature will take care of us. 

We can save our planet if we commit to it.

Another option was to make Patagonia public, but the short-term gain would not have been worth it. Instead of going public Patagonia’s owner and his family decided “going purpose” was the best way to use their wealth to protect the most valuable thing we have: our Earth.

The other unsuitable option was to convert Patagonia to a nonprofit. Nonetheless, a bigger impact can be achieved from for-profit organisations. Naturally, Patagonia will continue donating 1% of sales towards saving our planet.

What is so special about Yvon Chouinard’s decision to make the environment a shareholder?

One business issue is how they can justify their profit while exploiting natural resources. Patagonia founder Yvon Chouinard’s net worth is estimated at $1.2 billion. With this amount of money comes a lot of responsibility; for the people and the planet. Profit cannot exist without any of the latter. 

Increasingly, we need business models which acknowledge the interdependence of our well-being with the health of natural systems. If humanity wants a future, it is a non-negotiable undertaking to place people and the planet before profit in the 21st century.

The decision to give Patagonia away to fight the climate crisis has the potential to influence a new form of capitalism. For too long, capitalism only developed to generate profit, but now we need to restructure capitalism to benefit everyone. Historically, natural resources and communities have been depleted, exploited and destroyed for the sake of the extreme financial wealth of a few.

The Triple Bottom Line includes all three perspectives 

Patagonia has ushered in a period of change: a 50 years long experiment and beyond to save the planet and its people by implementing a sustainable business model. Operating profitably without harming the planet and people are strong business drivers.

Wait a second… that sounds too good to be true

Of course, such a high-impact decision also draws criticism from different corners. With huge amounts of money comes a lot of power. Are we going to be informed about how the money is used? Will it truthfully contribute to fighting the climate crisis?

Another sceptic perspective points out that the Patagonia founder wants to avoid taxes. Possible, but I haven’t found any information that proves this assumption. There are many ways to commit tax fraud, but is it justifiable to do it to fight the climate crisis?

We need more pioneers who reflect company values in their actions: For a better and safer future 

The responsibility lies with the business owner. The business owner and executive floor are responsible for the company’s impacts. Any person making decisions on behalf of others and the planet is responsible. Often sustainable business models suggest focusing on employees or resources to structure sustainably. Financial models are not so often taken into account because it might mean that the executive floor might lose some play money. 

The times are over when businesses simply exist to generate profit, exploit natural resources and drain any positivity from their employees. Understanding the immense dependency of business on the dimensions of people and the planet turns the table around. Business models should be based on reciprocity, the simple responsibility of taking care and influencing in the most positive way. Wealth builds on exploitation, so we need models which make wealth honourable. Patagonia founder might have set a milestone in the development of sustainable business models.

There are many suggestions to make business practices sustainable. Some of them have good intentions. Others distract from the real problem: faulty systems. Here are some examples I find valuable in transforming the economy sustainably. 

Be real about sustainability

It does no one any good if we only half-heartedly approach the topic of sustainability. Even worse, we can’t afford it – money and time – anymore. Understanding the inner core of sustainability and continuously improving one’s actions to drive sustainable results is non-negotiable. Sustainability efforts and communication have to be aligned.

There is no way around it and people don’t forgive lightly these days. Sustainability is not only about fulfilling corporate responsibility practices, reporting and ESG disclosures, it’s about laying the foundation for the future of all of us.

Address the issues at the root

We need solutions that not only treat the symptoms, but restructure the underlying systems to stop the symptoms from occurring in the first place. Sustainability is not another make-up colour to cover malpractices that harm the well-being of people and the planet. For too long, businesses have exploited natural as well as human resources to generate profit. We not only experience a dramatic decline in natural resource renewability, but also our workforce suffers from social crises like mental health decline, poverty, racism, injustice etc. 

It’s hard to believe that almost every system made by humans is based on exploitation. The responsibility of businesses and governments is to actively and profoundly change the systems they operate. There is no other way unless common people take matters into their own hands. We urgently need the global, human-made systems to change to be able to reverse the impacts of the challenges we are facing.

Involve your natural and social surroundings

Businesses don’t depend solely on generating revenue. Businesses depend on the resources they receive from the natural environment and societies. The impact a business has on those two entities needs thorough investigation to ensure sustainable and responsible decisions. Furthermore, determining the scope of the impact and involving it in creating sustainable systems is a crucial undertaking toward real, sustainable impact. If businesses want to continue their practices they need to value and take care of what they depend on: people and the planet.

Transparency is the key to credibility

Transparency is often used in conversations about sustainability. It’s not as easy to cover up secrets as it used to be, and it should not be a practice in the first place. Every decision and every impact counts tremendously because we are in an era where we walk on eggshells. Good and bad practices will increasingly influence business operations. Getting it right is not a matter of courtesy anymore, it is a matter of security and decency. People are fed up with the lies they have been told. Making business practices transparent is non-negotiable.

Collaboration needs to be utilised

Our business world depends on competitive advantage to thrive, so traditionally intercompany collaboration has been avoided. Teamwork shouldn’t only take place within the company’s walls, but be extended outside. It’s interesting to witness the hype of collaboration, and yet see that the understanding and approaches of collaboration are not well developed. This leads to many missed opportunities for growth. Soft skills are as important as hard skills; maybe even more important. 

Related:

From Hardie To Softie: 7 Soft Skills Which Will Change The World For Good

Collaboration within a company is important for success. Often we read how employees can perform better to benefit their company. What if the companies or the board’s decisions naturally laid a foundation for employees to thrive? Turning the tables and pointing out the responsibility of the executive floors needs to be addressed. 

Respect the traditional and truthful owners of the land

A lot of knowledge and wisdom have been wiped away by colonialistic and capitalistic forces to make a lot of money and increase individual wealth. Consequently, the basis of real wealth and well-being has been destroyed and little is left. Therefore, we urgently have to preserve what remains. 

As every country has their own traditional and truthful owners of the land, I want to encourage you to research the traditional owners of the place or country where you live. Learn about them: their culture, traditions, language, impact, beliefs, missions, purpose etc. Also, find out whether the traditional owners live among us. There might still be an opportunity to learn from them.

It is not your fault that the world is the way it is. It would only be your fault if she stays like this

Yvon Chouinard’s decision to make the natural world the shareholder of Patagonia might be exactly what we need in our world. A shift away from sole profit making, to a business world full of purpose and responsibility. The Patagonia founder might have become a pioneer who will create the impact we so urgently need. The natural environment has for too long been neglected and exploited, it’s time to give back and try to restore what we have destroyed. Interestingly, this will lead us to more: potential, more well-being, more wealth, more time, more passion and more of everything we need. 

Sustainability is a passion project for me. I’m very much looking forward to following the progress of Patagonia for our planet. Instead of labelling this story as old news, we need to try our best to make it work. It’s not Patagonia’s sole responsibility to fight the climate crisis. It’s the responsibility of us all to make it work.

In this regard, I would like to end the article with a quote from Patagonia founder Yvon Chouinard’s open letter:

If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have. This is what we can do.