M.Making bold statements about tackling the climate crisis has become a must in the corporate world over the last few years. But when Yvon Chouinard, the founder and owner of outdoor clothing company Patagonia, decided that his family would give his 98% stake in the company to a newly formed nonprofit dedicated to fighting the climate. This was taken to a whole new level when we announced we were transferring. break down.
Chouinard was praised for “letting go” of his company for the sake of the planet. He himself claimed that he was “upending capitalism”. Chouinard’s widespread admiration is a clear sign of public dissatisfaction with the excesses of the global corporate economy and its billionaire bosses. But the problem remains: Does this giveaway indicate a fundamental change in the system?
The announcement was the conclusion of Chouinard’s 50-year commitment to doing business to save the planet. In a letter he released last week, entitled “Earth is now our sole shareholder,” spells out Patagonia’s next chapter. Company ownership is transferred from the Chouinard family to his two organizations, a trust and a non-profit organization. The purpose of this bold move is to “defend the company’s values”, fight the environmental crisis and protect nature.
In fact, Chouinard’s plan means that about $100 million in unreinvested profits will be given annually to a nonprofit called the Holdfast Collective. Holdfast will own his 98% stake in Patagonia, all of which will be non-voting stock. The exact nature of the work Holdfast does is not specified, other than a very general idea of its environmental purpose. and support thriving communities.”
Holdfast is a tax-exempt organization under 501(c)(4) of the Internal Revenue Code of the United States. This means that they are legally allowed to participate in political activities, unlike public charities.
Patagonia Purpose Trust, on the other hand, has only 2% voting power in the company. This is an organization that Patagonia describes as “founded solely to uphold our values and mission” to save the planet. This means that the trust has veto power over decisions such as board composition, organizational structure, and company operations.
So what role will Chouinard play in the future, as he is no longer an owner of Patagonia? Patagonia’s website states, “The Chouinard family will lead the Patagonia Purpose Trust,” and “will continue to serve on Patagonia’s board of directors.” “and to guide the philanthropic efforts of the Holdfast Collective.”
Chouinard is relinquishing ownership of his company, but apparently not relinquishing control. But is what he does qualitatively different from the actions of other philanthropic billionaires?These days, like the robber barons of old, the Global His elite are lining up to We devote our property to a legitimate purpose. See his Giving Pledge of Bill Gates and Warren Buffett. They and his over 200 other richest people around the world have pledged to donate most of their wealth to address the problems facing society. Gates’ own foundation has signed his staggering $6 billion in grants and philanthropic deals in 2021.
What makes Chouinard different is that instead of making abstract promises, he literally gave up assets. He is no longer a millionaire. With this move, his ambitions are as overtly political as the environment. “Hopefully this will affect a new form of capitalism and not just result in a few rich and poor,” he told the New York Times.
It’s definitely a good thing that Chouinard and others are contributing to tackling the climate crisis. After all, governments around the world have failed for decades. But the problem is that this is all part of a well-developed global system in which the responsibility for dealing with public and social problems is increasingly assumed by private interests. , it is the empowered elite who have the power to decide.
Billionaire philanthropy provides moral justification rather than addressing the underlying political and economic systems that create inequality. They may decide to donate their money, but they still make the decisions. The rest of us have to rely passively on their mercy. It’s not yet clear what the Holdfast Collective will spend its $100 million a year on. One of the key questions, however, is whether it is subject to public scrutiny and accountability.
We live in a time when business owners have taken over their role as society’s moral mediators, using wealth to address what is considered society’s greatest problem. Meanwhile, the wealth and number of millionaires in the world are increasing, and inequality is dragging society to its breaking point.
It’s great that Chouinard is keeping the company working for the future of our planet. What’s not great is that our lives and futures are increasingly dependent on the power and generosity of the wealthy, rather than being governed by the common will of the people. As a society, we cannot look back and expect future billionaires to decide to donate their wealth for the benefit of the planet.