Is Patagonia Going Political?
In September of this year, Yvon Chouinard, the owner and founder of Patagonia, set a precedent for large company executives and declared the war on climate change urgent. He, along with his wife and two children, decided to transfer the $3 billion company to “a specifically designed trust and nonprofit organization” with the mission to combat climate change. The move ensures that the company's profits, some $100 million a year, will be used solely to combat climate change and protect the dwindling amount of undeveloped land our planet has remaining (Gelles, 2022).
Yvon Chouinard, a rock climber at heart, utilized his passion for climbing and nature to build Patagonia’s fortune and seems to break the mold of many of our world’s billionaires today. The cutthroat, profit-obsessed nature of capitalism that we see most often is not what Chouinard embodies. The scrutiny that has only been growing for large corporations and their lack of initiative seems to have struck a nerve within Chouinard.
Billion-dollar companies are being criticized because of their lack of initiative concerning the future health of our planet, and the clean-up process and expenses – financial and otherwise – future generations have to undertake. With the monetary power that they wield today, younger generations are hoping for some help from these large companies and their leaders. “Help” in this context does not mean “handouts”, but rather the responsibility that these large corporations hold because they have inflicted and profited from the massive damage to our environment.
As the scrutiny grows, CEOs are beginning to act. For example, Jeff Bezos, who currently holds the place as second richest person on the planet, has started the “Bezos Earth Fund”. The fund works towards a similar end as Chouinard’s chosen trust and nonprofit organization. However, with Chouinard’s background and so much of his identity stemming from nature and his rock climbing past, he is putting his money in a position to influence policy change. Policy change has the ability to shift lifestyles and align all on an environmentally sustainable path. Now, what exactly will his money be doing?
First, in giving away the company, he forfeits all company profits to the non-profit, Holdfast Collective. He is handing over 98% of the non-voting shares to this nonprofit. The remaining 2% are voting shares, which will be “retained in the Patagonia Purpose Trust.” This move allows him to ensure the environmental agenda of the company. Essentially, the family will have complete control of the company, and with this control will be giving all of its profits to the Holdfast Collective.
The most significant difference between Patagonia’s “donation” and philanthropy from others among the world’s most elite, is the type of organization to which they are donating. Other large organizations, such as The Gates Foundation, are classified as 501(c)(3), while the Holdfast Collective is classified as 501(c)(4). As a 501(c)(3), The Gates Foundation, allows Bill Gates to use the foundation as a tax-deductible under the condition the foundation is “forbidden by law from participating in political campaigns or giving to political candidates.” On the other hand, the Holdfast Collective’s classification as a 501(c)(4) does not grant a tax-deductible , but rather allows the organization to be involved in politics. Diving deeper into this move by Patagonia grants a much more detailed understanding of the good they are capable of doing (Jacobo and Zahn, 2022).
To emphasize the potential for good that the Holdfast Collective has, it is useful to look at the power that 501(c)(4) organizations wield today and have been wielding for some time. The National Rifle Association (NRA) is a good example of the political influence that 501(c)(4) organizations can have. The NRA supports several political candidates; for example, the organization has spent over 13.6 million in support of Mitt Romney. This is their largest contribution to any political figure, but numerous other candidates are being supported by millions of NRA dollars (Which senators have benefitted the most from NRA money?, 2022).
Distinguishing these two types of organizations sheds light on those companies that are greenwashing and those that are creating authentic, substantive change. Greenwashing creates the illusion that a company is making strides to be sustainable or support the climate-change cause when in reality they are doing it for their benefit. Whether they are earning tax breaks, conducting a cheap public-relations stunt, or acting to drive up profits, greenwashing companies hope to mislead ignorant consumers into believing that they are taking steps in the right direction, when in reality they are not. This is detrimental to climate-change mitigation because it gives the public a false sense of security and progress. While Patagonia’s financial commitment to combating climate change will prove undeniably important in and of itself, and perhaps inspire other corporations and their leaders to commit in similar ways, the public holds the greatest power to shift our political agenda and way of life. That is why understanding this key difference is important for educated global citizens to make decisions for themselves.
Chouinard and his family seem to understand that progress in climate-change mitigation will come through political action and policy implementation. With money comes power and influence, as we have seen in the past couple of decades of political turmoil. Patagonia’s financial pledge has the power not only to initiate change within policy making directly but also to motivate political leaders to follow this new wave of environmental money. They will be funded to push climate change to the forefront of their policy agendas.
Chouinard wrote in his announcement letter, “If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have. This is what we can do.” With the political influence that his money could have in the hands of the non-profit the Holdfast Collective, Chouinard could be influencing the “all of us” that he refers to. Through climate change policies and regulations, everyone can become involved. Political funding and lobbying for candidates that are going to put climate change at the forefront of their agendas will be the fastest way to involve as many people as possible in the battle against the warming and crumbling climate (Chouinard, 2022).
It is important to realize as human beings on the planet Earth that we are the ones that are in danger. We are a danger to ourselves. We are causing the 6th mass extinction. The planet will remain, but the question is will we be able to remain without mass loss?
References
Chouinard, Y. (n.d.). Yvon Chouinard donates Patagonia to fight climate crisis. Patagonia Outdoor Clothing & Gear. Retrieved November 29, 2022, from https://eu.patagonia.com/nl/en/ownership/
Gelles, D. (2022, September 14). Billionaire no more: Patagonia founder gives away the company. The New York Times. Retrieved November 29, 2022, from https://www.nytimes.com/2022/09/14/climate/patagonia-climate-philanthropy-chouinard.html
Jacobo , J., & Zahn, M. (n.d.). ABC News. Retrieved November 29, 2022, from https://abcnews.go.com/Business/clothing-company-save-planet-patagonia-find/story?id=90265309
Which senators have benefitted the most from NRA money? Brady. (n.d.). Retrieved November 29, 2022, from https://elections.bradyunited.org/take-action/nra-donations-116th-congress-senators