Patagonia CEO raises bar for business owners

After placing the company into a trust, Patagonia CEO Yvon Chouinard is setting a new precedent for what philanthropy could look like for modern businessmen. Patagonia will donate all profits to climate change as it continues to function as a hiking gear brand.

In order to fund climate change action and give back to the people, Yvon Chouinard donated his multibillion-dollar company to a trust on September 14, leading other billionaires by example.
“There is no ethical consumption under capitalism,” is a statement heard by many as people try to figure out where sustainability and consumerism meet.
Many feel as though this is an absolute truth, and consumers should give up trying to help. With poor working conditions being the standard for fashion companies and companies producing massive amounts of carbon emissions, it feels impossible to find brands you can support that are eco-friendly, socially sustainable and reasonably priced.
However, the consumer is not without responsibility in the fight for progress.
It is important to hold CEOs and businesses accountable to ethical expectations. While previously this may have looked like donating occasional profits to a cause and avoiding child labor, Patagonia has changed this precedent.
What Patagonia has done has created an innovative solution to wealth hoarding. While the accumulation of massive wealth is unethical in practice, Chouinard has recognized the importance of giving that money back to society. We must also recognize that many large corporations will donate large sums of money to charity, while they continue to hoard large amounts of wealth. In fact, they benefit financially from their charitable contributions.
These contributions, while helpful, are PR stunts that boost the reputation of the company as they avoid paying their taxes.
While this in itself is not necessarily wrong, the hoarding of wealth while trying to appear morally dignified is.
These tax write-offs are stealing money from the nation’s people. Consumers are the ones who keep these businesses afloat by providing them with sales, but companies aren’t interested in giving their money back to the people by paying taxes.
To overgeneralize, the most ideal way for the economy to work is for money to flow from consumers to companies through sales, and back to consumers through wages. But when wages are kept low, companies can keep profits in an effort to accumulate wealth in the hands of the few. Consumers do not have the option to disengage from the market, resulting in wealth hoarding by companies and CEOs.
This should remind all consumers that there are certain options that are better than others when it comes to shopping. Sustainability is a spectrum. While it is easy to say that it is pointless to attempt to shop socially and environmentally sustainable, it is important to support brands that do their best.
From now on, Patagonia’s profits will go back to the welfare of the people through climate change efforts. The company was placed into a trust that is not eligible for tax write-offs due to its IRS registration that allows it to donate to political parties, as Chouinard recognized the climate crisis is caught up in politics right now.
“Truth be told, there were no good options available. So, we created our own,” Chouinard said.
This type of innovation is what we need from all companies. If financially possible, do your research on brands and choose ones that support sustainable causes.
People who are in comfortable financial decisions should choose to support brands that make an effort to help society.
It is also important to accredit Chouinard for taking serious action on the climate problem. Many companies, like Amazon, have chosen to take minimal efforts, doing just enough to keep public outrage at bay. For example, Sprite recently announced that they are changing their bottle to be clear instead of green for environmental purposes.
Many people have wondered if this actually has an impact on the sustainability of their bottles, or if it is simply for public relations purposes as their green bottles are incredibly identifiable in photos of landfills and the ocean.
Ideally, other large companies will follow in Patagonia’s footsteps and begin giving back to the Earth and consumers who provided their wealth in the first place.
Giving back to environmentally sustainable causes can only benefit current and future consumers for generations and generations. Patagonia was valued at over $3 billion at the time Chouinard announced his decision to donate his company.
The non-profit organization that Patagonia is now entrusted to is called The Patagonia Purpose Trust. Plastered on Patagonia’s ownership page of their website is the phrase “Earth is now our only shareholder.” This motto reflects the direction Chouinard wanted to take with Patagonia. He believes the company’s purpose is now much bigger than selling hiking gear.
The reason he opted to place Patagonia into trust instead of selling it to new ownership is because Patagonia is “in business to save our home planet.”
Chouinard chose specifically to place the company into trust because he was not satisfied with the other options.
According to the Patagonia website, he could sell the company and run the risk of a new owner with different values that could completely shift the mission of Patagonia.
This was unfavorable. The other option that Chouinard had was to take the company public. However, Chouinard felt this decision would have been a disaster. A public company has far too much pressure to create short-term profits that come at the expense of sustainable practices and long-term vitality.This event should provoke people to look within themselves and ask what they can do. In the midst of massive wealth inequality and the climate crisis, individuals must seek to innovate and improve the world around them.
While this cause may seem beyond the reach of our small Souderton community, there are ways that we can help.
We must ask ourselves what we can do to help out. Whether it’s a small contribution to a cause you care about, investing time into your education for the future or starting a conversation with someone to help spread awareness and perspective, everyone must do their part if we want to heal.