mmaking bold statements about tackling the climate crisis has become de rigueur in business in recent years. But this was taken to a whole new level when the founder and owner of the outdoor clothing company Patagonia, Yvon Chouinard, announced that his family was transferring 98% of the company’s stock to a newly formed nonprofit dedicated to the fight against the virus. climate. to break down.
Chouinard has been praised for “giving away” his company for the planet. He himself claimed that it “turned capitalism on its head”. Chouinard’s widespread admiration is a telltale sign of popular dissatisfaction with the excesses of the global corporate economy and its billionaire bosses. But the question remains: does? does this giveaway mark a fundamental change in the system?
The announcement marked the end of Chouinard’s 50-year commitment to doing business to save the planet. In a letter he released last week entitled “The Earth Is Now Our Only Shareholder,” he outlined the next chapter for Patagonia. Ownership of the company is transferred from the Chouinard family to two entities: a trust and a non-profit. The stated goals 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 about $100 million in unreinvested profits each year will be given to the nonprofit called the Holdfast Collective. Holdfast will own 98% of Patagonia, all in non-voting shares. The exact nature of the work Holdfast will do is not specified, except for the very general idea of its environmental purpose. Patagonia describes this goal as “fighting the environmental crisis, protecting wildlife and biodiversity, and supporting thriving communities.”
Holdfast is an organization recognized as tax-exempt under US Internal Revenue Code 501(c)(4). This means that, unlike public charities, it is legal to participate in political activities.
Meanwhile, only 2% of the company, but all voting shares, goes to the Patagonia Purpose Trust. This is the organization that Patagonia says was “established solely to protect our company’s values and mission” to save the planet. This means that the trust has veto power over decisions such as the composition of the board of directors, the organizational structure and the activities of the company.
So, no longer the owner of Patagonia, what will Chouinard’s role be in the future? The Patagonia website says, “The Chouinard family will lead the Patagonia Purpose Trust,” will “remain on the board of Patagonia” and “lead the philanthropic work of the Holdfast Collective.”
It seems that while Chouinard is giving away ownership of his company, he is not giving up control. But is what he does qualitatively different from the actions of other philanthropic billionaires? Today, the global elite, like the robber barons of yesteryear, are lining up to donate their fortunes to charities. Just look at Bill Gates and Warren Buffett’s Giving Pledge, where they and more than 200 other of the richest people around the world pledged to give away most of their wealth to address the problems facing society. to grab. Gates’ own foundation donated a whopping $6 billion in grants and charitable contracts in 2021.
What makes Chouinard different is that, instead of making an abstract promise, he has literally renounced his assets. He’s not a billionaire anymore. With this move, his ambitions are as explicitly political as they are environmentally friendly. “Hopefully this will influence a new form of capitalism that doesn’t end with a few rich people and a few poor people,” he told the New York Times.
That Chouinard and others contribute to tackling the climate crisis is undoubtedly a good thing; after all, governments around the world have failed for decades. The problem, however, is that this is all part of a well-developed global system in which responsibility for dealing with public and social problems is increasingly being taken over by private interests. And, as we see with Chouinard, it’s a powerful elite who rule.
Rather than addressing the underlying political and economic system that creates inequality, billionaire philanthropy offers it a moral justification. They may decide to give their money away, but they still make the decisions. The rest of us just have to passively rely on their benevolence. Exactly what the Holdfast Collective will spend its $100 million on a year has not yet been announced. An important question, however, is whether it is open to public scrutiny and accountability.
We live in an age where business owners are taking over as society’s moral arbiters and using their wealth to tackle what they see as society’s biggest problems. Meanwhile, the wealth and the number of billionaires in the world are growing, and inequality is driving society to a breaking point.
It’s great that Chouinard is putting his company to work for the future of the planet. What’s not great is how our lives and future are increasingly dependent on the power and generosity of the wealthy elite, rather than being ruled by the common will of the people. As a global society, we cannot stay behind and hope that future billionaires decide to give away their wealth in the service of the planet – there is far too little time left for such far-fetched luxuries.