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20 September 2022

Patagonia’s decision to give away its brand proves greenwashing won’t save us

Its billionaire owner has pioneered sustainable manufacturing, but knows such actions haven’t been enough: real climate action is expensive.

By Ellys Woodhouse

It’s rare that you will see a magazine on the left defending a billionaire – or should I now say, former billionaire – but we may have to make an exception for Yvon Chouinard. The founder of the outdoor clothing brand Patagonia has always been a self-confessed “reluctant businessman”. Chouinard told the New York Times that his inclusion on Forbes magazine’s list of billionaires in 2017 “really, really pissed me off”. And so, he set in motion to give away his fortune to only one recipient: Earth.

In a statement released on Wednesday 14 September, the former owner announced he has given away the family business, worth $3bn (£2.6bn). Yet rather than selling the company or taking it public, Chouinard has relinquished ownership to a specially designed trust and a non-profit organisation to ensure all Patagonia’s profits – about $100m (£87.7m) a year – are used to combat climate change.  

This is the latest and most drastic move in Chouinard’s lifelong commitment to green causes. Since the company’s founding in 1973, environmental issues have been at the forefront of the business’s aim. Patagonia was an early adopter of using organic cotton and has been making fleeces from recycled bottles since the 1990s. They actively encourage their customers not to buy excessively and instead redirect to their repair programmes. In a Black Friday advertisement they went so far as to tell consumers: “Don’t buy this jacket.” Now that sustainability is so in vogue these may feel like commonplace claims, but Patagonia has been pioneering for almost half a century.

It was the first company in California to be certified as a B Corp in recognition of its commitment and transparency to environment and social causes. Since 1986 Patagonia has donated 1 per cent of its sales to environmental charities, and in 2002 launched its “1% for the Planet” scheme, a programme encouraging other businesses to match its contributions. This has resulted in $70m (£61.2m) being donated to grassroots environmental groups. And yet, in the founder’s own words, “it is not enough”.

Despite this impressive history and dedication to the cause, Chouinard ultimately decided the company must take radical action if it wishes to make a tangible difference. Chouinard hopes the restructuring of Patagonia will “reimagine capitalism” as a system in which all profits are reinvested into fighting the climate crisis. “Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” he said.

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This will come at a high cost to the family, not only due to their loss in shares but because the donation to the trust will cost around $17.5m (£15.3m) in taxes. Yet it is clear that Chouinard sees effective climate action as both a moral and financial commitment.

His decision is striking not only because it is the first of its kind but because it demonstrates the drastic lengths companies must be committed to go to if they wish to be effective on climate change. When it feels like every company is shouting about their progress in sustainability, Patagonia leaves the fluffy greenwashing tactics and corporate performances of fast-fashion retailers exposed for ridicule. Think Pretty Little Thing launching its own clothing resale site (despite its clothes being designed for only one use) or Boohoo employing Kourtney Kardashian as its new sustainability ambassador (I don’t think I need to explain the hypocrisy there). Indeed, brands are starting to face legal action over allegations of greenwashing. Asos and Boohoo are currently being investigated by a UK competition regulator for misleading consumers over their eco-friendly claims, and in New York, H&M is facing a lawsuit for false advertising about the sustainability of its clothing.

There is clear public interest (and economic gain) for companies to be climate conscious. However, as this move by Patagonia demonstrates, effective climate action will come at a high cost.

[See also: Fracking and oil drilling doesn’t just fail Britain, it fails the world]

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