Billionaire Boss Gives Fashion Firm Away To Fight Climate Change

The billionaire founder of outdoor fashion brand Patagonia has given away his company, vowing to use the money to help fight climate change. 

Yvon Chouinard said any profit not reinvested in running the business would go towards arresting the climate crisis after giving the business to a charitable trust, with the website stating: "Earth is now our only shareholder."

Founded in 1973, Patagonia has amassed a huge worldwide following based on its sustainability model which includes guaranteeing its clothes for life and offering reasonably priced repairs, with it’s most famous advert ‘Don’t buy this jacket’ asking shoppers to consider costs to the environment.

Mr Chouinard, a rock climbing fanatic, has always said he ‘never wanted to be a businessman’ from when he started out making metal climbing spikes for himself and his friends before moving into clothing and eventually creating the hugely successful Patagonia brand. 

Patagonia's sales were worth around £1.3 billion  this year, while Mr Chouinard's net worth is thought to be £1.0 billion - although the 83-year-old has always shied away from his wealthy status.

“Despite its immensity, the Earth's resources are not infinite, and it's clear we've exceeded its limits,” Chouinard said of the decision to give up ownership.

He says the profits to be donated to climate causes will add up to around £87m a year, depending on the health of the company.

While Patagonia’s prices are high with - jumpers cost up to around £200 and T-shirts around £40 - the company says the cost reflects the fact its clothes are meant to last a lifetime.

Patagonia's chairman, Charles Conn, told the BBC: “We invest in making sure we use the least water, the least dangerous chemistries and dyes, and use the least carbon in the production of our products, which often means they cost a little bit more.”

The UK editor for FashionNetwork.com, Sandra Halliday, told the BBC Mr Chouinard's move could actually end up boosting its sales further.

“If this was simply a marketing ploy it would be an inspired one, but it's not, it's actually a genuine move to try to do something better for the planet,” she said. 

Although the firm was already donating 1% of its annual sales to grassroots activists and sustainable practices, Chouinard said he wanted to do more.

The founder said he had considered selling the company and donating the money to charity, or even taking it public, but as both options would have meant giving up control of the business and putting its values at risk, he instead transferred all ownership to two new entities. 

The first, the Patagonia Purpose Trust, led by the family, remains the company's controlling shareholder but will only own 2% of its total stock, and will guide the philanthropy of the second, Holdfast Collective.

The US charity that is ‘dedicated to fighting the environmental crisis’ now owns all of the non-voting stock - equal to 98% of the company.

“Each year the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis,” Mr Chouinard said.

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