Patagonia, the American outdoor label dedicated from the start to producing garments responsibly, have made an extra sexy announcement as they celebrate their 50th anniversary next year: their new, and only, shareholder is planet Earth! That’s $3 billion worth of shares according to The New York Times. And with the brand thriving at the moment, it’s projected that this could mean roughly $100 million per year will also be going toward protecting the environment.
So from a finance-y POV, what does that mean? Basically, each year, after reinvesting in the business itself, all the rest of Patagonia’s income will be distributed as a dividend (a payment to a business’ shareholders) to help fight the climate crisis. 100 per cent of the brand’s voting stock (that’s the shares in the business that usually give its holders the right to vote on matters in meetings) will now be going to the Patagonia Purpose Trust, created to protect the company’s values of responsible and sustainable fashion. Then 100% of the non-voting stock (the rest of the shares, reported by CNBC to make up about 98%) will go to The Holdfast Collective, a non-profit dedicated to the environmental crisis, protecting nature and biodiversity, and supporting thriving communities.
It’s worth noting too that the Chouinard family, who have owned Patagonia for the past fifty years, did not receive a tax break for its donations to The Holdfast Collective, according to The New York Times. Additionally, they have famously previously paid millions in taxes for their donations to the trust as well as promising in 2018 to give their savings from tax cuts, offered by then president Donald Trump, to environmental causes.
“I never wanted to be a businessman,” Yvon Chouinard, founder of Patagonia, said in a statement. “I started as a craftsman, making climbing gear for my friends and myself, then got into apparel. As we began to witness the extent of global warming and ecological destruction, and our own contribution to it, Patagonia committed to using our company to change the way business was done. If we could do the right thing while making enough to pay the bills, we could influence customers and other businesses, and maybe change the system along the way.”
The idea behind the new business move is that, with Patagonia continuously growing and having a monumental impact on protecting the planet – earlier this summer the brand were a key figure in the successful efforts to protect Europe’s last wild rivers – they wanted to make sure whoever took over ownership of the brand would protect both its workers and its values. Instead of a new private owner or the brand going public, the Chouinard family will continue to make key decisions for the brand and guide its journey through the Patagonia Purpose Trust.
It’s a massive and welcome decision that will hopefully be a huge boost to the fight to protect our planet that has been so overlooked by many businesses and rich people (those who should really be doing the most). “Despite its immensity, the Earth’s resources are not infinite, and it’s clear we’ve exceeded its limits. But it’s also resilient. We can save our planet if we commit to it,” Yvon said to finish his statement. Turns out there are good billionaires after all!