On the 15th of September, several media channels were reporting the news that Patagonia has new shareholders. It is not a private investor, nor is it a public company, it is a trustee and a non-profit organisation that are going to take care of the 100 million dollars coming as revenue to protect nature and fight the climate crisis. The owner and founder Yvon Chouinard acknowledge that what the company is doing internally to become more climate and environmentally friendly is not enough and more funding is needed to protect the wealth (nature) from which companies like Patagonia got their wealth in the first place. The revenue is the additional money that is distributed, after the end of the business year, to its shareholders. Sometimes the revenue can be used for investment and it still will be in the case of Patagonia to improve their business. But the major difference is that beyond having a sustainable business that is invested in order to become more sustainable and operate there is no surplus given to shareholders.

The question is, is this a model that more companies could follow? If there are investors behind the company that are expecting a stream of revenues to come annually it can be difficult to implement. The investors would like to get back the money they invested with some surplus, but if they have already made a profit and done an excellent investment, how much more do they really need? When can we say it’s enough for shareholders to gain profit and put a percentage or a limit that should be reinvested in nature? Because Patagonia’s founder has a really good point, the profit is made from the wealth of nature so shouldn’t that wealth be reinvested back into nature?

H&M Group increased their sales last year and made 1777 million of US dollars (Statista). Among the owners are the Stefan Persson family and their related companies (52% of total shares) and the Lottie Tham family and their related companies (5.4 % of total shares) (H%M Group) followed by minor shareholders. Stefan Person with a net worth of 14.4 billion US dollars, according to Forbes, could surely give away some of its shares to Planet Earth too (his son Karl-Johan has taken over the role as chairperson). Why not?

Inditex, the fashion retailer of which Zara is a part of, has 59.2% of its shares owned by the founder Amancio Ortega (Euronews). Inditex net profit more than doubled in 2021 to 3.2 billion euros (3.51 billion US dollars) (Nasdaq). The net worth, according to Forbes, for Amancio Ortega is 53.5 billion US dollars.

A contra argument for these billionaires would probably be that if they give away their shares or too much of their shares they wouldn’t be able to influence the company. If you look at Stefan Persson and his family they have 76.6% of the voting (H&M Group). But maybe a non-profit organisation with another purpose would do a better job influencing the company. Or maybe they can make an agreement with the other shareholders (technically it might be very hard with the banks in the H&M group to do so) to do the same? Or they can keep the shares, set up their own profit and claim that all the revenue coming from the shares will go directly to the non-profit?

H&M foundation is already funded privately by the family but to what extent in comparison with the profit H&M group is making? Since the foundation was initiated in 2013, the Stefan Persson family has donated 1.5 billion Swedish kronor to the foundation, which is not much if you compare 52% of total shares of 1777 million US dollars per year by 2022.

We simply believe that companies such as H&M group and Inditex which have taken plenty of natural resources and human capital throughout the years and made a huge profit resulting in private individuals becoming billionaires should increase their share or return to Planet Earth, just as Patagonia did.

Don’t you agree?

Patagonia has elected Planet Earth as its shareholder - when will other brands follow?

Fashion & the forest #2 - By Sanne Brännström

Trends: A fun thing to catch or just an environmental disaster?