The founder of the outdoor brand Patagonia has relinquished his ownership in the business and directed its profits to fight climate change.
Yvon Chouinard, who became famous for alpine climbs in Yosemite National Park and then as a manufacturer of outdoor gear, has transferred his family’s ownership of Patagonia to two new entities, one of them a nonprofit organization that will use the businesses’ annual profits to fight climate change, the company said in a news release Wednesday.
“Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source. We’re making Earth our only shareholder,” Chouinard, 83, said in the statement.
In a letter to customers, Chouinard said Patagonia is now owned by a trust that will determine the company’s direction and a new nonprofit group called the Holdfast Collective, which is dedicated to protecting nature and other environmental causes.
The company’s leadership has not changed.
“While we’re doing our best to address the environmental crisis, it’s not enough,” Chouinard wrote. “... Each year the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”
The company expects to contribute roughly $100 million to the Holdfast Collective through an annual dividend depending on the businesses’ success.
In a question-and-answer section appended to Chouinard’s letter, the company said Patagonia continues to be a for-profit business as a certified B Corp, a designation for companies that consider factors such as social and environmental impacts of their businesses.
It also said that the Chouinard family will continue to “guide the Patagonia Purpose Trust, electing and overseeing its leadership” and sit on Patagonia’s board. The company “will keep doing its best to be a great employer.”
Denis Hayes, who coordinated the first Earth Day and later became the CEO of the environmentally focused Bullitt Foundation in Seattle, said Chouinard has long been a strident environmentalist willing to make bold moves and challenge convention. The Patagonia brand, Hayes noted, charges a premium, in part, because of the values it represents.
“Apparently, they’re putting it into the structure that will institutionalize that beyond his lifetime,” said Hayes, whose foundation operates a for-profit building it claims is the greenest in the world.
Hayes said businesses in manufacturing or extractive industries in a capitalist economy that requires growth ultimately run into conflicts with environmental and climate values.
“The concept of putting this together in a new structure and being experimental and bold is exactly the kind of innovation we need to be trying,” Hayes said.
Chouinard started selling climbing equipment such as pitons in 1957, usually out of his car.
Later, Chouinard became an advocate of so-called “clean climbing,” in which protective gear is placed and removed in rock walls so it does not cause damage from hammering pitons.
He holds several patents, including one for aluminum climbing chocks designed to cause less destruction of rock.
This story first appeared on NBCNews.com.