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When Patagonia introduced that it will dedicate all income to environmental charities, it generated a variety of “This adjustments every thing!” rhetoric. But can one firm actually change every thing? What did Patagonia really change? On the floor, this looks like precisely the type of investment in the Earth that EarthDay.org requires. Has Patagonia actually discovered the trail to a sustainable inexperienced financial system? Or is that this simply one other case of company greenwashing?
Patagonia has an extended historical past as a socially and environmentally acutely aware enterprise. Patagonia founder Yvon Chouinard is legendary for being a reluctant capitalist who obtained his begin as an outside fanatic making gear for his associates. Since 1985, Patagonia has donated an “Earth tax” to environmental causes as one of some firms collaborating in a 1% for the Planet scheme. The firm encourages customers to donate to environmental nonprofits as a part of an uncommon method to Black Friday.
In distinction to fast fashion, Patagonia’s merchandise are revered as sturdy, long-lasting funding items that you just not often, if ever, have to exchange. It makes jackets from plastic bottles and lately launched a clothing take-back program. In 2018, it modified its mission assertion to state, “We’re in enterprise to save lots of our residence planet.” It’s much more than most companies do, however all of those steps are arguably half-measures, and a few folks might even think about them greenwashing.
Patagonia’s Big Shift
Patagonia took a a lot larger step in September. In an open letter, Patagonia founder Yvon Chouinard introduced an entire restructuring of the corporate. Now 100% of Patagonia’s voting inventory is held by the Patagonia Purpose Trust. All of the nonvoting inventory was given to the environmental nonprofit Holdfast Collective. Except for cash reinvested in creating the corporate, all income shall be distributed as a dividend to those stockholding organizations. Essentially, Chouinard donated his whole enterprise to charity – albeit charities that the Chouinard household nonetheless runs, and with some fats tax breaks thrown in for good measure.
Designing a enterprise to donate all income to charity isn’t new. Possibly the primary to do it was the natural meals model Newman’s Own, which has given 100% of income to charity since 1982. In the many years since, a handful of other companies have accomplished the identical, though till now, none of them had been as massive as Newman’s.
Patagonia’s restructuring isn’t fairly a copy-paste of Newman’s Own. Patagonia’s perpetual objective belief construction depends on a tough – and sometimes sketchy – tax code higher recognized for funding politics than ecosystems. After the preliminary fanfare, that had lots of people elevating eyebrows. Neither the Patagonia Purpose Trust nor the Holdfast Collective exists or operates individually from Patagonia. As a 501(c)(4) not-for-profit group, the Collective has a variety of spending freedom. It can advocate for causes and political candidates in addition to make grants and investments. With no Charity Navigator rating or public monitor file to look at, solely time will inform the place the cash will find yourself or how efficient it is going to be.
Limits of Philanthropy
There can be the difficulty that Patagonia is a part of the issue it’s attempting to unravel. By its personal admission, each piece of Patagonia clothing emits a number of occasions its weight in greenhouse gases, generates at the very least one other half garment’s value of scrap, and attracts down freshwater sources. No matter what it does with its income, any firm that produces retail client items is inflicting environmental injury.
Philanthropy – whether or not company or particular person – offers an necessary public service. But because the Carnegie Endowment for International Peace (itself funded by one of many nation’s largest historic philanthropists) points out, philanthropy is stop-gap measure to fill wants left unattended by authorities. Unlike authorities motion, philanthropy is unregulated, unstructured, and primarily unaccountable for its actions and outcomes. Some folks have even argued that fashionable philanthropy reinforces colonial and racist structures in society. Most folks wouldn’t go that far, however there are limits to how a lot good a worldwide company can do.
Patagonia in Perspective
Restructuring one out of doors gear firm doesn’t change every thing. But the corporate does appear to be doing as a lot as an organization can. Philanthropy and incremental operational adjustments will not be a substitute for significant authorities motion to satisfy Paris Agreement targets. Nor does it change accountable particular person selections. But they’re a important complement to these issues. And Patagonia is elevating the bar for company environmental accountability quite a bit increased than earlier than. It is directing $100 million a year towards environmental causes. In six years, it can have matched 40 years’ worth of Newman’s Own’s donations. That’s a fairly large shift.
Feature picture by Charles DeLoye on Unsplash