Earth is in peril, life as we have known it, is under imminent threat of man made climate change and environmental destruction. When they are not looking for clever ways to avoid regulations to mitigate global warming, most corporations are focused on the profit margin, to the exclusion of all else. Which makes sports wear company Patagonia’s announcement all the more eye catching.
“As of now, Earth is our only shareholder” the company announced Wednesday 14th, all profits, in perpetuity, will go to our mission to save our home planet.”
The announcement gives new meaning to putting your money your mouth is. Patagonia’s billionaire founder, Yvon Chouinard, who hates being referred to as a billionaire, will now be putting those billions into environmental activism.
Now 83, Chouinard built up the company that would become Patagonia, by selling handmade tools, for his favourite sport of rock climbing. An accomplished climber, he initially made the climbing equipment for his own use, before selling to other sportspeople.
In 1973, Chouinard opened the first shop, near his blacksmiths, in Ventura, California. Success followed success, and the company grew to become one of the most popular sports equipment brands.
In a complex structure, Patagonia will remain a for profit enterprise, but managed within a trust, that will allocate all of its profits to the protection of the environment, making the company’s statement, that Earth will be the only shareholder, true in a literal sense.
Billionaires, like Microsoft’s Bill Gates, Berkshire Hathaway’s Warren Buffett, have established charitable foundations, into which they have poured billions, and a number of corporations give out large sums, as part of their corporate responsibilities.
But until now, anyone even suggesting devoting the entire profits of any successful, let alone a billion dollar company, to good causes, would have been considered, certainly naïve, if not a little unhinged.
Anyone familiar with Chouinard and Patagonia, will however not find the announcement especially surprising. The company was giving 1% of its profits to environmental groups, long before it became a popularly acknowledged cause. Employees’ benefits included creches at work, and where others made much of “dress down Fridays” Patagonia gave its employees afternoons off, whenever the waves were particularly good for surfing.
Throughout his company’s existence, Chouinard did more than the most radical environmental activist would ask of a commercial enterprise, but he himself does not see his company as sustainable.
“There is no such thing as sustainability” he says, “the best we can do, is cause the least amount of harm.” All that companies can do, he says, is be “responsible.”
While he credits some companies for following his example, he sees their contributions as a mere drop in the ocean. The major corporations, simply pay lip service to environmental awareness, “greenwashing.”
Restructuring his company to profit the environment, was a preferred alternative to floating it on the stock exchange. He has little love for public corporations.
“I would like to see and end to public corporations because we are not going to revolutionise them, we are not going to change them” he has declared.
The billionaire who famously gets irritated, when he is called one, prefers a comfortable, but otherwise ordinary lifestyle, which does not necessarily stand out. Ironically, it is this very characteristic that will now make him, and his company, particularly noticeable.