MIn the past few years it has become difficult in the corporate world to make bold statements about how to address the climate crisis. But it was taken to a whole new level when Yvonne Chouinard, the founder and owner of outdoor clothing company Patagonia, announced that his family was relocating. 98% of the company’s stock To a newly created non-profit organization dedicated to combating climate breakdown.
Chouinard was commended for “giving away” his company for the sake of the planet. He himself claimed that it was “turning capitalism on its head”. Chouinard’s widespread admiration is a clear indication of popular discontent with the global corporate economy and the excesses of its billionaire bosses. But the question remains: what Does this giveaway mark any fundamental change in the system?
The declaration was Chouinard’s conclusion 50 year commitment To save the planet, to be in business. Last week he issued a letter titled, “Earth is now our sole shareholder”, he described the next chapter for Patagonia. Ownership of the company will be transferred from the Chouinard family to two entities: a trust and a non-profit organization. The stated objective of this bold move is to “protect the company’s values”, fight the environmental crisis and protect nature.
In practical terms, Chouinard’s plan means that each year about $100 million of unreinvested profits will be given to a nonprofit, called the Holdfast Collective. Holdfast will own 98% of Patagonia, and it will all be in non-voting stock. The precise nature of the work to be performed by Holdfast has not been specified other than in general consideration of its environmental purpose. Patagonia describes this objective as “to fight the environmental crisis, protect nature and biodiversity, and support thriving communities”.
Holdfast is an organization recognized as tax-exempt under US Internal Revenue Code 501(c)(4). This means that, unlike public charity, it is legally allowed to engage in political activities.
Meanwhile, only 2% of the company, but all voting stock, goes to Patagonia Purpose Trust, It is the organization that Patagonia says has been created to “preserve the values and mission of our company as a whole” to save the planet. This means that the trust has veto power over decisions such as the composition of the board of directors, its organizational structure and the operations of the company.
So, with no longer owning Patagonia, what will Chouinard’s role be in the future? Patagonia Website The Chouinard family will “guide the Patagonia Purpose Trust”, says “the Chouinard family will continue to sit on Patagonia’s board”, and “will guide the philanthropic work undertaken by the Holdfast Collective”.
It appears that, while Chouinard is giving up ownership of his company, he is not giving up control. But is what he is doing qualitatively different from the actions of other philanthropic billionaires? These days, like the robbers of old, the global elite are queuing up to give away their fortunes for good deeds. Just look at Bill Gates and Warren Buffett’s Giving Pledge, where they and more than 200 of the richest people around the world have committed. giving most of his money To solve the problems of the society. Gates’ own foundation surprised $6bn in grants and charitable contracts in 2021.
What makes Chouinard different is that instead of making an intangible pledge, he has literally relinquished his wealth. He is no longer a billionaire. His ambitions with this move are as clearly political as the environment. “Hopefully this will affect a new form of capitalism that doesn’t end with a few rich people and a bunch of poor people,” he said. new York Times,
The contribution Chouinard and others have made to addressing the climate crisis is undoubtedly a good thing; After all, governments around the world have failed for decades. The rubbish, however, is that all this is part of a well-developed global system where the responsibility for dealing with public and social problems is taken over by private interests. And, as we see with Chouinard, it’s a forceful elite capable of calling the shots.
Rather than addressing the underlying political and economic system that creates inequality, billionaire philanthropy provides a moral justification for it. They may decide to give their money, but it is still they who decide. The rest of us will just have to passively rely on his altruism. Exactly what Holdfast Collective will spend on its $100ma year is as yet unknown. An important question, however, is whether it will be open to public scrutiny and accountability.
We live in an era in which business owners are taking over as ethical arbiters of society, using their wealth to solve society’s biggest problems. Meanwhile, the wealth and numbers of the world’s billionaires grow, and inequality leads society to collapse.
It’s great that Chouinard is putting his company to work for the future of the planet. What is not great is how our life and our future are fast dependent On the power and generosity of the wealthy elite, rather than being governed by the general will of the people. As a global society, we can’t hold back and expect billionaires of the future to decide to lay down their wealth in service of the planet – with little time left for such distant luxuries.