In a move that redefines environmental activism in the fashion business, billionaire Yvon Chouinard, the owner of US outdoor powerhouse Patagonia, donated the firm to fund efforts to combat the climate problem.
Chouinard has chosen to donate the retailer's uninvested revenues, which are believed to be worth approximately $100 million annually, to a charity trust instead of selling the firm or going public.
Chouinard said in an open letter to customers that Earth is now our only shareholder. Despite our greatest efforts, the environmental situation cannot be solved. They had to figure out a method to spend more money on the problem while still upholding the company's core values.
Under the new arrangement, the Holdfast Collective, a nonprofit organization devoted to preserving environment and biodiversity and assisting communities, has received all of Patagonia's nonvoting shares, or around 98 percent of the business.
The Patagonia Purpose Trust, which is run by the founding family, currently owns all of Patagonia's voting shares, or the remaining 2% of the business.
After reinvesting in the company each year, Patagonia will give a dividend to support these causes.
Chouinard said they've been experimenting with ethical business practices for almost 50 years, and they're only now beginning. It will take all of us working together to the best of our abilities with the resources they have if we are to have any chance of having a flourishing planet, much less a prosperous business, in 50 years. This is just another means they've discovered to contribute.
Patagonia, which was established in 1973, has evolved through time to represent environmental advocacy in the fashion sector.
Under its "1 percent for the planet" program, the Ventura, California-based company already contributed 1% of its yearly revenues to the protection and rehabilitation of the environment. Under the control of its new owner, that strategy will continue.
At a time when businesses are under increasing pressure to back up their green promises with deeds, not words, the innovative and bold decision to give away Patagonia establishes a new benchmark for sustainability in the notoriously destructive fashion industry.
According to Chouinard, Patagonia will continue to be a for-profit corporation, and members of the original Chouinard family will continue to serve on the board of directors.
Currently, Patagonia is said to be worth around $3 billion.
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