California Observer

Yvon Chouinard gives company Patagonia to charity

Image Source: Forbes

Patagonia’s millionaire founder donated his company to a nonprofit trust. Patagonia is known for its outdoor clothing. According to Yvon Chouinard, any profits left over after paying expenses for running the company will be used to combat global warming.

A cult following has developed for the brand as a result of its commitment to sustainability, which includes offering affordable repairs and a lifetime guarantee on all of its clothing. In addition, it is well-known for its “Don’t buy this jacket” commercial, which urges consumers to think about the environmental costs before making a purchase. “Earth is now our lone shareholder,” reads a statement on the company’s website.

Mr. Chouinard has consistently stated that being a businessman was never in his plans.

He was a major admirer of rock climbing and began by fabricating metal climbing spikes for himself and his pals to wedge into rocks. He then transitioned to apparel and eventually established a tremendously popular sportswear brand.

In contrast to Mr. Chouinard’s estimated net worth of $1.2 billion, Patagonia, which was founded in 1973, reported revenues of about $1.5 billion this year. To the New York Times, he expressed his horror at being viewed as a millionaire, although he has always avoided acknowledging his money.

According to him, depending on the state of the business, profits to be contributed to charities related to climate change might total about $100 million (£87 million) annually.

Sales have not been affected by the company’s marketing initiatives, which focus on urging customers to purchase only what they need. However, detractors contend that the firm’s increased visibility has led consumers to spend more money rather than less.

Although the company claims the price reflects the fact that its items are supposed to last a lifetime, jumpers can cost as much as £200 and T-shirts as little as £40.

Already dedicated to sustainable business practices, the Californian company gave 1% of its annual sales to grassroots organizers. However, the hesitant businessman claimed that he wished to do more in an open letter to clients.

According to him, he had initially thought of either selling Patagonia and giving the proceeds to a good cause or going public.

He did, however, note that both solutions would have required letting up business control. The pressure to generate short-term profit at the price of long-term vitality and accountability is too great, even for public corporations with excellent objectives.

Wealthy individuals like Yvon Chouinard who have made donations

As he gave $20 billion to his philanthropic foundation this year, Microsoft founder Bill Gates promised to “drop off” the list of the world’s wealthiest people. The software executive, whose estimated net worth is $118 billion, promised to donate his money to charity in 2010, but his wealth has since doubled.

A philanthropic organization received £100 million from the Hut Group’s CEO last year, who became a millionaire when his company was listed and ran a number of online nutrition and beauty companies. Matthew Moulding was attempting to make a difference despite his newly acquired money, saying that he “couldn’t even fathom the statistics.”

Richer Sounds’ founder Julian Richer gave employees a 60% ownership stake in the company in 2019.

The ownership has been transferred entirely to two new businesses by the Chouinard family. According to Mr. Chouinard, the family-run Patagonia Purpose Trust will still hold a controlling 2% of the company’s equity, but it will no longer be the majority stakeholder.

It will direct the generosity of the Holdfast Collective, a US nonprofit devoted to resolving the environmental catastrophe and which currently owns all of the non-voting stock or roughly 98% of the business.

Luxury outdoor apparel is combined with Patagonia’s social and environmental advocacy reputation. It’s an intoxicating combination that unquestionably draws a devoted audience if one is primarily wealthy.

Its longstanding commitment to environmental responsibility is one of the things that draws people in. Before environmentally conscious clothing became in style, it was already spreading the gospel. But, even if you use a lot of recycled or renewable materials, it’s still difficult to rescue the world if your company relies on sales.

Patagonia’s founder Yvon Chouinard has made an effort to square that circle by ringfencing future profits for environmental causes. However, it is also obvious that he is working to protect the Patagonia brand from future exploitation by the types of businesses he has previously criticized for engaging in greenwashing.

And nothing else will if that doesn’t appeal to wealthy outdoorsy types with a social conscience.

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