When I first learned that Patagonia founder and owner, Yvon Chouinard, donated 100% of his company to combat climate change, I felt a foreign feeling when it comes to the climate crisis––optimism. Especially since this news came on the heels of key climate legislation such as the Inflation Reduction Act and the $54 billion California Climate Commitment, I was glad that something was finally being done to solve the climate crisis.
Other USC students were more reserved. USC student Aastha Jani mentioned that though she thought it was “cool” they were taking this step, she’s cautious to laud billionaires.
“It didn’t make me feel more hopeful about climate change, because we were celebrating the exception, and not the norm,” said Jani, who is a communications major. “This still shows that people in power with more capital still control what goes on, but climate change is an issue that impacts everyone. It shouldn’t be in the hands of people who were able to amass large sums of wealth.”
It is true that Chouinard and his family directed $3 billion towards environmentalism. But it is also true that this is a stark aberration from the norm, because most of the time, businesses don’t champion social good.
The American capitalist system is designed so that businesses are accountable only to their shareholders, and their accountability metric is making as much profit as possible.
Unfortunately, this means that most of the time businesses are optimizing for efficiency, while humanitarianism and sustainability are put to the wayside. Or they are directly opposed, as seen through the working conditions in Tesla’s assembly lines or Amazon’s warehouses.
In this way, Patagonia is an exception, championing social good values over profits. This unique set of priorities has its roots in the founder’s strong belief in environmentalism.
“I never wanted to be a businessman”
Whilst Chouinard is a billionaire and considered among business elites, he seems to be an anomaly in every way. For one, I think he would hate that I referred to him as one of the “business elites.” When Forbes magazine listed him as a billionaire, he said it “really, really pissed him off.”
Chouinard drives a Subaru and doesn’t use a cellphone or a laptop. His unorthodox lifestyle and passion for the outdoors are reflected in Patagonia’s unique business conduct that pursues strong cultural values of environmentalism and community, and frequently sponsors ski and climbing trips for employees.
In 2015, President Obama recognized them for their commitment to working families. Patagonia claims their raw materials consist of 100% organic cotton and large proportions of recycled nylon and polyester. The company is credited with creating one of the first large-scale return and repair programs for their clothing. They also partner with Fair Trade USA to ensure ethical manufacturing, though only a portion of their styles is Fair Trade Certified. In 2012, Patagonia became California’s first certified Benefit Corporation.
“Earth is now our only shareholder”
Chouinard’s recent decision to donate his private, for-profit company for “climate change” has raised some questions among people about what it really means. Here’s a breakdown:
2% of the company, which refers to the total amount of the company’s voting shares, went to the Patagonia Purpose Trust. This organization has power over Patagonia as a company: it chooses board members and management, values, and overall business practices. The purpose, as indicated by its name, is to make sure Patagonia never strays from its original founding principles in environmental good.
Functionally, Patagonia will be making the same decisions it has been, since the Trust is under control of the Chouinard family. However, the legal charter in the Trust ensures that in the future it will still operate with these same core values and will choose future leadership based on the values listed in its legal charter.
The other 98% of the company will form the Holdfast Collective, a newly created nonprofit whose primary focus is combating climate change. This means that all of the profit that Patagonia makes, which is roughly $100 million annually, goes straight to this nonprofit.
“I was prepared to hate them”
While the USC students I spoke to generally responded positively to this move, there was still a sense of skepticism regarding large corporations and social good.
Benjamin Morehouse had not heard about this until I interviewed him, but when I explained Chouinard’s move to him, he was enthused. “This is a huge step for a clothing company,” he said. “I think it’s important that they are putting their money where their mouth is.”
The mixed reactions to this news underlie a harsh reality: people feel like the climate fight is out of their hands and the big corporations who control the world’s economy are inactive towards the crisis. When I spoke with USC student Olivia Benalcazar, who had also not heard about this, I found her response to be more suggestive of the general distrust students feel.
“To be honest, when you first asked me ‘Did you hear about Patagonia?’, my initial thought was that Patagonia did something horrible when it comes to climate change,” she said. “Because so many big companies had. I was prepared to hate them.”