By Business India Editorial

In an attempt to ‘reimagine capitalism’ and save Earth, founder of American outdoor clothing retailer, Patagonia, Yvon Chouinard, and his spouse and two adult children are giving away their ownership in the apparel maker he started some 50 years ago, it is reported.

Chouinard is transferring his family’s ownership to a charitable trust, making Earth the sole shareholder and beneficiary of any profits not reinvested back into the business.

However, the extraordinary move from the 83-year-old former mountain-climber is not completely unheard of. In 2018 the CEO of Ecosia, the search engine that uses ad revenues to plant trees, took action to ensure the company will only ever profit the planet.

Chouinard said the family is dedicating all profits from the company to projects and organisations that will protect wild land and biodiversity and fight the climate crisis.

The company is worth about $3 billion, according to the New York Times.

Patagonia, Inc. is an American retailer of outdoor clothing. Founded in 1973 in Ventura, California, Patagonia operates stores in more than 10 countries globally and has factories in 16 countries.

In a letter about the decision, published on the Patagonia website, Choiunard wrote of “reimagining capitalism,” and said: “The privately held company’s stock will now be owned by a climate-focused trust and group of nonprofit organisations, called the Patagonia Purpose Trust and the Holdfast Collective respectively.”

“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,” he wrote.

The trust will get all the voting stock, which is 2 per cent of the total, and will use it to create a “more permanent legal structure to enshrine Patagonia’s purpose and values.” It will be overseen by members of the family and close advisors.

The Holdfast Collective owns all the non-voting stock of Patagonia, which amounts to 98 per cent.

Patagonia expects to generate and donate about $100 million annually depending on the health of the business. The company now sells new and used outdoor apparel, gear for outdoor activities like camping, fishing and climbing, and food and beverages made from sustainable sources.

As a certified B-Corp and California Benefit Corporation, Patagonia was already donating 1 per cent of its sales each year to grassroots activists, and it intends to keep doing so. Fewer than 6,000 companies around the world are certified as B-Corp businesses. They have to meet strict environmental, social and governance standards and benchmarks set by B Labs to gain certification.

After informing its employees about this move, the company updated its website to state that “Earth is now our only shareholder.”