MMaking bold statements to address the climate crisis has become bolder in the corporate world over the past few years. But this has been taken to a whole new level when Yvonne Chouinard, the founder and owner of outdoor clothing company Patagonia, announced that his family is transferring 98% of the company’s stock to a newly formed non-profit organization dedicated to fighting climate change. Breaking.
Chouinard was applauded for “giving” the company to the planet. He himself said, “It is turning capitalism on its head.” Chouinard’s widespread acclaim is a sign of growing public disenchantment with the global corporate economy and its billionaire bosses. But the question remains: will it Does this grant represent any fundamental changes to the system?
The announcement was the culmination of Chouinard’s 50-year commitment to being in business to save the planet. In a letter released last week, he outlined the next chapter for Patagonia under the slogan “Earth is now our sole stakeholder.” The ownership of the company is transferred from the Chouinard family to two entities: a trust and a non-profit organization. The objectives of this bold move are to “protect the company’s values”, fight the environmental crisis and protect nature.
In practice, Chouinard’s plan means that around $100m of non-returnable profits will be given annually to a non-profit called the Holdfast Collective. Holdfast will own 98% of Patagonia, and all of it in silent stock. The exact nature of Holdfast’s work has not been revealed, other than the idea of its general environmental purpose. Patagonia describes this mission as “combating the environmental crisis, protecting nature and biodiversity, and supporting thriving communities.”
Holdfast is a 501(c)(4) tax-exempt organization under the US Internal Revenue Code. This means that it is legally allowed to engage in political activity as a public charity.
Meanwhile, only 2% of the company, but all of the voting stock, goes to the Patagonia Purpose Trust. This company, Patagonia, says is “created solely to protect our company’s values and mission” of saving the planet. That means the trust has the power to overrule decisions such as the composition of the board of directors, the organizational structure and the operations of the company.
So, no longer owning Patagonia, what might Chouinard’s role be in the future? Patagonia’s website says, “The Chouinard family leads the Patagonia Purpose Trust,” “continues to sit on Patagonia’s board,” and “leads the philanthropic work of the Holdfast Collective.”
While Chouinard relinquishes ownership of the company, it appears he will not relinquish control. But is what he’s doing different from other philanthropic billionaires? These days, like pirates of old, the world’s elite are lining up to donate their wealth to good causes. Check out Bill Gates and Warren Buffett’s Giving Pledge, where they and more than 200 other of the world’s richest people have pledged to give away most of their wealth to solve societal problems. Gates Foundation By 2021, it has spent an astonishing $6 billion on aid and charity deals.
What makes Chouinard different is that he actually releases the property rather than giving an abstract promise. He’s not a billionaire anymore. In this movement, the ambition is as much political as environmental. He told the New York Times, “Hopefully, this will influence a new kind of capitalism that doesn’t end up with a few rich people and a bunch of poor people.”
There is no doubt that Chouinard and others have contributed to addressing the climate crisis. After all, governments around the world have failed for decades. But the fact is that all this is part of a well-developed international system where the responsibility for solving public and social problems is increasingly taken over by private interests. And, as we see with Chouinard, it is the elite who can call the shots.
Billionaire philanthropy gives moral justification rather than addressing the underlying political and economic system that creates injustice. They may decide to give their money, but they are still the ones making the decisions. The rest of us must begrudgingly rely on their kindness. Exactly what the Holdfast Collective spends on the $100m a year has yet to be revealed. A key question, however, is whether it will be open to public scrutiny and accountability.
Today, business owners are taking over the moral judgment of society and using their wealth to solve what they believe to be the biggest problems of society. Meanwhile, the wealth and numbers of the world’s billionaires grow, and inequality pushes society to the breaking point.
It’s great that Chouinard has put the company to work for the future of the planet. The no-brainer is that our lives and futures depend on the power and generosity of a wealthy elite rather than the collective will of the people. As a global community, we can’t just go ahead and hope that future billionaires decide to put their wealth to the service of the planet – there is very little time left for such luxuries.
