File photo. Photo: 123RF
The billionaire founder of the outdoor fashion retailer Patagonia says he has given away his company to a charitable trust.
Yvon Chouinard said that under a new ownership structure, any profit not reinvested in running the business would go to fighting climate change.
This will amount to around US$100bn ($166bn) a year, he claimed, depending on the health of the company.
Patagonia sells hiking and other outdoor clothing in over 10 countries.
Founded in 1973, its estimated revenue was US$1.5bn this year, while Chouinard's net worth is thought to be US$1,2bn.
"Despite its immensity, the Earth's resources are not infinite, and it's clear we've exceeded its limits," the entrepreneur said of his decision to give up ownership.
"Instead of extracting value from nature and transforming it into wealth, we are using the wealth Patagonia creates to protect the source."
The Californian firm was already donating 1 percent of its annual profits to grassroots activists and committed to sustainable practices. But in an open letter to customers, the apparently reluctant businessman said he wanted to do more.
Hey, friends, we just gave our company to planet Earth. OK, it’s more nuanced than that, but we’re closed today to celebrate this new plan to save our one and only home. We’ll be back online tomorrow.https://t.co/fvRFDgOzVZ
— Patagonia (@patagonia) September 14, 2022
He said he had initially considered selling Patagonia and donating the money to charity, or taking the company public.
But he said both options would have meant giving up control of the business. "Even public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term vitality and responsibility," he said.
Instead, the Chouinard family, which always owned the company, has transferred it to two new entities. The Patagonia Purpose Trust, led by the family, remains the company's controlling shareholder but will only own 2 percent of its total stock, Chouinard said.
It will guide the philanthropy of the Holdfast Collective, a US charity "dedicated to fighting the environmental crisis" which now owns all of the non-voting stock - some 98 percent 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," Chouinard said.
Chouinard is not the first entrepreneur to give wealth away. Last year the boss of the Hut Group, which owns a range of online beauty and nutrition brands, donated £100m to a charitable foundation after becoming a billionaire when his firm was listed.
Matthew Moulding said of his newfound wealth that he "couldn't even comprehend the numbers" and was trying to make a difference.
Meanwhile, Microsoft founder Bill Gates this year vowed to "drop off" the world's rich list as he made a US$20bn donation to his philanthropic fund.
The tech boss, who is thought to be worth US$118bn, had pledged to give his wealth away to charity in 2010 but his net worth has more than doubled since then.
- BBC
