Yvon Chouinard, the billionaire owner of US outdoor giant Patagonia, has given the company away to help support efforts to fight the climate crisis in a move that sets new standards for environmental activism in the fashion industry.
Instead of selling the company or going public, Chouinard has decided to give the retailer’s profits not invested back into the business - estimated to be about 100 million dollars a year - to a charitable trust.
“Earth is now our only shareholder,” Chouinard said in an open letter to customers. “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.”
Under a new structure, 100 percent of Patagonia’s nonvoting stock- or around 98 percent of the company - has been transferred to the Holdfast Collective, a nonprofit dedicated to protecting nature and biodiversity, and supporting communities.
Meanwhile, 100 percent of Patagonia’s voting stock - the remaining 2 percent of the company - are now owned by the Patagonia Purpose Trust, which is led by the founding family.
The money Patagonia makes each year after reinvesting in the business will be distributed as a dividend to help these causes.
Patagonia owner gives company to charity
“It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started,” Chouinard said.
“If we have any hope of a thriving planet - much less a thriving business - 50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part,” he said.
Founded in 1973, Patagonia has over the years become the face of environmental activism in the fashion industry.
The Ventura, California-based business was already donating 1 percent of its annual sales towards the preservation and restoration of the natural environment under its “1 percent for the Planet” scheme. That scheme will continue under its new ownership.
The unique and decisive move to give Patagonia away sets a new standard for environmentalism in the notoriously damaging fashion industry at a time when companies are facing mounting pressure to back up their green commitments with actions, not words.
Chouinard said Patagonia will continue to be a for-profit business, with the founding Chouinard family will continue to sit on the company’s board.
Today, Patagonia is estimated to be worth about 3 billion dollars.