Five decades after creating Patagonia in 1973, Yvon Chouinard has given the outdoor clothing and gear company away. The rock climber and industry innovator transferred the company to two entities: a nonprofit and a designated trust, designed so that 100% of the company’s profits (roughly $100 million a year) will be put towards protecting the planet.

The new structure will fund a variety of climate initiatives, like grants to organizations, investments in land and water protection, and support for candidates and policies that support swift climate action.

Why This Matters

In creating this plan, Patagonia has set a new standard for “stakeholder capitalism,” and green philanthropy, especially since many companies’ environmental commitments are muddled with greenwashing. Even before restructuring the company, Patagonia has made good on not only providing quality gear and protection for America’s 50 million outdoor adventurers, but also the natural environments those customers depend upon. Since 1985, the company has been giving away 1% of its sales to grassroots climate activists in an effort to help solve a problem that unchecked capitalism created. It even sued the Trump administration to conserve the Bears Ears National Monument.

In the company’s press release, Patagonia Board Chair Charles Conn was quoted:

The world is literally on fire. Companies that create the next model of capitalism through deep commitment to purpose will attract more investment, better employees, and deeper customer loyalty. They are the future of business if we want to build a better world, and that future starts with what Yvon is doing now.

Inspiring Corporate Philanthropy

While many financial institutions have made net-zero pledges, most of them have not divested from fossil fuels, even though there is a clear moral imperative to do so.

Some billionaires have, however, made some headway and signed onto the Giving Pledge to give portions of their vast fortunes away. Notably, John Doerr, a Silicon Valley venture capitalist, donated $1.1 billion to Stanford University to establish a climate school that can help develop solutions to the environmental crisis.

But what sets Chouinard’s Patagonia-funded contributions apart is that neither he, his family, nor his stakeholders stand to benefit financially from it. In fact, with the Patagonia shares placed into a trust, the family will be obligated to pay $17.5 million in taxes.

“It was important to them that they were not seen as the financial beneficiaries,” Ryan Gellert, the company’s chief executive, told the New York Times. “They felt very strongly about it. I know it can sound flippant, but they really embody this notion that every billionaire is a policy failure.”

Because the Patagonia Purpose Trust is the business’s controlling shareholder and is subject to the trust’s environmental commitments, the company announced that its “only shareholder” is Earth itself.