Chouinard’s inventive approach across these spheres makes the recent biography Dirtbag Billionaire by The New York Times journalist David Gelles an intriguing read.
The anti-authoritarian entrepreneur started out making basic rock-climbing equipment. He then built a business reputation based on ethical commerce, and eventually gave away his company, promising all profits to fighting the climate crisis.
From an Australian perspective, there are lessons to learn given growing environmental and climate concerns, while both corporate giving and corporate distrust have surged in the past decade.
The wild early years
Chouinard prefers the “dirtbag” label to that of businessman or billionaire. It’s a reference from his 1960s lifestyle, a term for someone who sleeps rough, roams widely and disdains material possessions.
As a young climber chasing adventures with friends on rock faces, rivers and waves, Chouinard lived frugally. He ate cat food, squirrels and porcupines.
In these years, inventive Chouinard revolutionised climbing. Using a junkyard forge, he hand-crafted innovative, reusable, softer metal spikes to drive into rock faces. At first selling from his car boot, he built up a US and international customer base.
But, faithful to his environmental values, Chouinard then risked the company by ditching his original top-selling metal spike that damaged rock faces for one that did less harm to the cliff face.
Along the way he employed many fellow climbing, surfing and kayaking enthusiasts, prioritising employee wellbeing and engagement in the business. This was decades before employees were seen as a stakeholder, or internal culture was considered important in a business.
A clash of values
However, with the success of his Patagonia clothing business formed in 1973, Chouinard the conservationist had entered a highly capitalistic sector. The retail market was based on trend-driven overconsumption and exploitative labour and environmental practices.
His quest to do capitalism differently is instructive.
Despite higher costs, Chouinard moved the company into organic cotton use and encouraged regenerative topsoil practices. The principled actions built customer trust and loyalty.
His approach also inspired others who saw decisions that put environmental considerations above profit were good business all round.
As Patagonia grew into a billion-dollar company, he maintained a policy of donating 1% of sales (not just profit) to the environment, no matter how tight the times.
Chouinard co-established 1% for the Planet in 2001 as an accrediting body to encourage companies worldwide to donate 1% of their sales to environmental organisations. Since founding, over 11,000 companies in 110 countries have donated a total of US$823 million (A$1.2 billion).
Chouinard also actively called out corporate greenwashing, and Patagonia was a corporate activist on multiple issues. This included suing US President Donald Trump in 2017 to keep wilderness reserves safe from oil and gas exploration and land development.
One of the first B Corps
In another leadership move, Patagonia in 2012 became the first California company to become a certified Benefit Corporation, better known as a B Corp.
This is a legally binding, transparently measured commitment to act sustainably, live up to independent performance standards and consider worker, society and environmental interests.
Then, aged 83 in 2022, Chouinard established a pioneering succession trust structure and nonprofit collective for the business. This would see Patagonia continue as an independent, environment-led activist company rather than be floated or sold and have its values and foundations diluted.
This organisational restructure supercharged Chouinard’s philanthropy.
The family retains a voice, while giving away 100% of their estimated US$3 billion and all of Patagonia’s future profits that are not reinvested in the business. (US$100 million in 2022).
Even the legendary industrialist and philanthropist Andrew Carnegie only gave away 90% of his fortune.
Lessons for future philanthropists
My previous research records the top five motivations for Australian philanthropists as:
- making a difference
- giving back to the community
- personal satisfaction
- aligning with moral or philosophical beliefs, and
- setting an example.
Chouinard’s philanthropy touches on all of these.
US philanthropy researcher Paul Schervish uses the phrase “hyperagency” to capture the character and capacity that some individuals have to achieve the outcomes they deem important for society.
Schervish suggests such changemakers build their own world rather than staying within the constraints of traditional approaches.
Chouinard built his own version of capitalism. He continues to argue the Earth is the only resource base for business, and is therefore the prime business stakeholder. Without it, there are no customers, shareholders, employees or business.
Patagonia’s core mission became: “We’re in business to save our home planet”. The company established Earth as its major shareholder.
A message in Dirtbag Billionaire for givers small and large, individual and corporate, is that authentic giving is about values.
Such authentic giving across a lifetime using money, time, voice, networks, workplaces and ethical principles is rarely so well on display as in the life of Yvon Chouinard.
Wendy Scaife, Adjunct Associate Professor and Director, Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology
This article is republished from The Conversation under a Creative Commons license. Read the original article.