What would you do if you had a billion dollars? Would you end world hunger? Eradicate poverty? Solve climate change? In actuality, Patagonia founder Yvon Chouinard has quite literally chosen the latter. Following a summer of record-breaking climate disasters, Chouinard has given his company away to fight the climate crisis. Recognizing the antagonistic relationship between protecting the planet and prioritizing profits, Chouinard has taken corporate social responsibility to an entirely new level, reimagining the relationship between capitalism and the environment in an unprecedented way. Hopefully, Chouinard’s charitable initiative is just the beginning, and the revolutionary remodeling of his company will inspire a new era of corporate leadership and environmental standards.
This September, the environmentalist, climber, philanthropist, self-described “reluctant businessman,” and founder of Patagonia: Outdoor Clothing and Gear company released a letter on the company website titled "Earth is now our only shareholder." Chouinard’s letter outlined Patagonia’s restructuring and attributed this historic initiative to the severity of the climate crisis, reflecting on our collective responsibility to dedicate all resources to saving our planet. His family collectively transferred their ownership of Patagonia to a strategically designed trust and non-profit organization. All of the company’s voting stock, 2% of the overall shares, has been transferred to the specially designed Patagonia Purpose Trust, dedicated solely to protecting the company’s values. The remaining 98% is being directed to the Holdfast Collective, a nonprofit focused on fighting climate change and achieving climate justice.
Chouinard has a long history of being an environmental activist in the corporate world. Since Patagonia’s founding, he has made his company increasingly environmentally friendly and has been consistently experimenting with responsible business practices. From declining to sell environmentally damaging products to refusing to sell items that are ecologically degrading in their production itself, his company’s dedication to the environment is both transparent and unwavering. He states his purpose clearly in his letter: “Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.” Chouinard has undoubtedly set the gold standard for corporate social responsibility, which all businesses should be striving to follow.
In the battle of climate versus capital, there is a clear winner. Protecting the environment and producing a profit are competing goals that entirely contradict one another, with profit taking priority over the planet every time. Chouinard himself acknowledged that even good companies are placed under pressure to prioritize short-term gains at the expense of the environment. Although there are corporate efforts to mend the rift between the competing motivations of environmentalism and capitalism, they are insufficient and exacerbate cycles of overproduction and overconsumption, acting as merely one drop in rapidly warming and rising oceans.
While this antagonistic relationship between planet and profit can feel impossible to adequately address, Chouinard's leadership gives hope for improvements. In fact, on the compatibility between business and sustainability, Chouinard is not shy about his skepticism. He has been openly critical of the stock market, over-consumption, and wealth inequality. In an exclusive New York Times interview, he explained that in making the decision to make the earth Patagonia's only shareholder, “hopefully this will influence a new form of capitalism that doesn’t end with a few rich people and a bunch of poor people”. He did not approve of the way business is run, so he created a new way to run business. His leadership should inspire everyone to rethink the nature of our economy and business practices.
“Money talks,” says Climate Justice at Boston College President, Cecelia Durcan (‘23). “We’re just one step further in this massive push for social, political, and financial change. It’s one thing for an institution to say it strives to improve the conditions of others, to preach a model of service, compassion, and love for fellow humans. It’s another to act that mission in body, mind, spirit, and financial holdings,” Durcan explained, applauding Chouinard and Patagonia when asked how Patagonia’s financial restructuring relates to our university’s endowment investments.
Patagonia is now estimated to be directing $100 million a year to fight climate change. If all companies were to follow Patagonia’s lead and make impactful donations to the environment, or similarly, if Boston College joined the increasing number of institutions to divest from fossil fuels, perhaps the fight for a climate-just world and livable future may not seem so daunting.
Even though this news is a major win for the planet and people alike, the conversations they are starting beg us all to question both how much we extract and how much we are giving back to the planet, and Patagonia is leading the way. From now on, Earth is its only shareholder.