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Yvon Chouinard, outdoor clothing manufacturer, Patagonia’s billionaire founder, has donated his business to a trust for humanitarian purposes. According to Chouinard, any earnings that are not used to operate the company will be used to combat climate change.
Due to its commitment to sustainability, the brand has developed a cult following. Examples include offering affordable repairs and a lifetime guarantee on all clothing. In addition, it is well-known for the advertisement “Don’t buy this jacket,” which urges consumers to think about the environmental consequences. On the company’s website, it is currently stated that Earth is the lone stakeholder.
Mr. Chouinard has consistently stated that he has no desire to work in business.
When he first became interested in rock climbing, he made metal climbing spikes for himself and his companions to wedge into rocks. Later, he turned to apparel and developed a tremendously popular sportswear brand.
Patagonia, which was founded in 1973, generated revenues of about $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 viewed as a billionaire.
Depending on the company’s performance, he asserted that revenues to be contributed to environmental groups would total about $100 million (£87 million) annually.
Sales have not been affected by the company’s marketing initiatives, which center on urging customers to buy only what they need. However, some contend that the firm’s increased notoriety has actually pushed consumers to spend more money.
Jumpers, for instance, cost over £200, and T-shirts, about £40, but the business claims the price reflects 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 annual sales to grassroots organizers. But the hesitant businessman claimed in an open letter to clients that he wanted to take things further.
He claimed that at first, he had thought of either selling Patagonia and giving the proceeds to a good cause or going public with the business.
However, he claimed that both possibilities would have required giving up management of the company. Even publicly traded companies with the best of intentions face excessive pressure to prioritize short-term profit over long-term vitality and accountability.
Wealthy people like Yvon Chouinard who have donated their wealth
Bill Gates, the creator of Microsoft, made a $20 billion commitment to his philanthropic organization this year and pledged to “drop off” the world’s rich list. The software executive, whose estimated net worth is $118 billion, had promised to donate his money 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 a number of online nutrition and beauty firms, gave £100 million to a charitable foundation last year. Matthew Moulding, who recently became wealthy, admitted that he “couldn’t even understand the figures” and that he was working to change the world.
Julian Richer, the creator of the hi-fi chain Richer Sounds, gave employees a 60% ownership stake in the company in 2019.
The Chouinard family has instead given control of the property to two fresh organizations. The family-run Patagonia Purpose Trust will continue to have a majority stake in the business but will only hold 2% of the company’s equity, according to Mr. Chouinard.
It will direct the charitable endeavors of the Holdfast Collective, a US organization that works to combat the environmental catastrophe and currently holds 98% of the company’s non-voting stock.
Patagonia mixes its reputation for social and environmental action with upscale outdoor fashion. It’s a potent combo that undoubtedly has a devoted following if one is primarily wealthy.
The fact that its commitment to environmental preservation is not novel contributes to some of the appeals. For example, years before environmentally friendly clothing became in style; it was preaching environmental awareness. But however many recycled or renewable products you use, saving the world is still a challenge if your company relies on sales.
Yvon Chouinard, the founder of Patagonia, has attempted to square that circle by ringfencing future profits for environmental causes. But he is also unmistakably working to protect the Patagonia brand from the types of businesses he has previously condemned for engaging in greenwashing.
Nothing will, in fact, appeal to wealthy outdoor types with a social conscience if that doesn’t.