The outdoor clothing manufacturer, Patagonia’s millionaire founder, has donated his business to a nonprofit trust. According to Yvon Chouinard, any money made that wasn’t used to run the company would be used to combat climate change.
Due to its commitment to sustainability, the brand has developed a cult following. Examples include offering free lifetime guarantees on its clothing and delivering affordable repairs. In addition, it is well-known for its “Don’t buy this jacket” advertisement, which implores consumers to think about the environmental consequences of their purchases. Earth is now our sole stakeholder, according to the company’s website.
Mr. Chouinard has consistently said that he has no desire to work in business.
He was an avid rock climber who first made metal climbing spikes for himself and his pals to wedge into rocks before switching to clothing. He finally became a tremendously popular sportswear company with a cult following.
Patagonia, which was founded in 1973, reported revenues of almost $1.5 billion this year, and Mr. Chouinard’s net worth is estimated to be $1.2 billion. However, he has never publicly acknowledged his fortune, telling the New York Times that he was mortified to be thought of as a billionaire.
Depending on the company’s health, he asserted that profits to be contributed to environmental charities would total about $100 million (£87 million) annually.
The company’s marketing tactics, which center on urging customers to buy only what they need, have not decreased sales, and detractors have claimed that increasing its notoriety has encouraged more spending rather than less.
Jumpers, for instance, cost over £200, and T-shirts cost about £40, but the company claims the high prices reflect the fact that their clothing is supposed to last a lifetime.
The Californian company was already devoted to sustainable business practices and donated 1% of its yearly sales to grassroots organizers. But the hesitant businessman said in an open letter to clients that he wanted to accomplish more.
He claimed that at first, he had thought of either selling Patagonia and giving the proceeds to a good cause or going public.
But he claimed that both possibilities would have required giving up management of the company. Even publicly traded companies with the best of intentions face too much temptation to prioritize short-term profit over long-term vitality and accountability.
Yvon Chouinard joins an exclusive list of givers
Bill Gates, the creator of Microsoft, made a $20 billion commitment to his philanthropic fund this year and pledged to “drop off” the world’s rich list. The computer executive, whose estimated net worth is $118 billion, had promised to donate his fortune to charity in 2010, but since then, his wealth has more than doubled.
After becoming a billionaire when his company was listed, the CEO of the Hut Group, which owns several online nutrition and beauty companies, gave £100 million to a charitable foundation last year. Matthew Moulding recently became wealthy and said he “couldn’t even understand the figures” and was working to change the world.
In 2019, Julian Richer, who created the hi-fi retailer Richer Sounds, gave employees a 60% ownership stake in the company.
The Chouinard family has instead given control of the entire business to two fresh organizations. According to Mr. Chouinard, the family-run Patagonia Purpose Trust will continue to have a majority stake in the business but will only possess 2% of its total stock.
It will direct the generosity of the Holdfast Collective, a US nonprofit battling the environmental problem that currently owns all of the non-voting stock or roughly 98% of the company.
Patagonia mixes its reputation for social and environmental activism with high-end outdoor fashion. It’s a potent combination that undoubtedly draws a devoted audience if one is primarily wealthy.
Its established environmental consciousness is one of the attractions. Many years before environmentally friendly clothing became in style; it was preaching environmental awareness. However many recycled or renewable materials you use, it’s still difficult to help the earth if your firm depends on selling goods.
Yvon Chouinard, the founder of Patagonia, has attempted to square the circle by designating a portion of future income for environmental causes. But he is also obviously working to protect the Patagonia brand against future exploitation by the kinds of businesses he has previously condemned for engaging in greenwashing.
And if it doesn’t appeal to wealthy outdoor enthusiasts with a social conscience, nothing will.
