Patagonia founder gave away his company to fight climate change and promote conservation: 5 questions answered

Patagonian founder Yvon Chouinard, his wife and their two adult children have irrevocably transferred ownership of the outdoor apparel company to a number of trusts and non-profit organizations.

From now on, the company’s profits will finance efforts to tackle climate change, as well as protect wilderness areas. However, it will remain a private company. According to initial reports on this unusual approach to philanthropy that took place on September 14, 2022, Patagonia is worth about $ 3 billion and its perpetual donation profits could amount to $ 100 million annually.

The Conversation US asked Ash Enrici of Indiana University, a scholar who studies how philanthropy affects the environment, to explain why this arrangement is so significant.

1. Is this move part of a trend?

The biggest donors, those who donate billions of dollars, are increasingly making climate change a priority. Amazon founder Jeff Bezos, for example, announced in 2020 that he was investing $ 10 billion in his Earth Fund, and Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs, said in 2021 that he would dedicated $ 3.5 billion of his fortune to fight climate change.

Likewise, major donors are increasing their funding for conservation efforts.

In September 2021, the Earth Fund joined with eight other philanthropic powerhouses to pledge $ 5 billion to “support the creation, expansion, management and monitoring of protected and conserved areas of land, inland waters and seas.” worldwide. This initiative aims to preserve 30% of the Earth by 2030.

A few days after Chouinard’s announcement, another climate gift emerged, setting a similar precedent. Director Adam McKay said he will donate the $ 4 million he made from the film “Don’t Look Up,” which he wrote, co-produced and directed. Those proceeds from his satirical film, which was a metaphor for climate inaction, will fund a climate activism group.

Regardless of how often these donations occur, it is important to keep in mind that the cost of addressing the world’s environmental challenges is enormous and will cost trillions of dollars. So while all of these gifts are certainly significant in their scope, donors and governments will have to do and spend much more.

2. What sets it apart?

What is unusual about Chouinard’s gift of climate change is its structure. By giving away his company and directing that profits are spent on fighting long-term climate change in the form of regular installments, he is creating a new model for large-scale donations.

It also constitutes a notable precedent. Chouinard and his family are giving away the source of their wealth and organizing things in a way that will result in a predictable form of support for climate work – about $ 100 million a year from Patagonia’s profits.

I think it’s a great example for other entrepreneurs and very wealthy people to follow.

Patagonian owner Yvon Chouinard, seen in one of his stores in 1993, is now a major climate donor.
Jean-Marc Giboux / Liaison Agency via Getty Images

3. How are conservation efforts and climate change related?

Journalists, scholars and the public often see addressing climate change and preserving ecosystems as two distinct priorities. But they are instead closely related. Having ecosystems that thrive in a way that protects biodiversity is one way to slow the pace of climate change.

Climate change itself will damage ecosystems and contribute to biodiversity loss through, for example, rising temperatures in large bodies of water to the point that established marine ecosystems are so disrupted that many species die.

And the flip side is that maintaining healthy ecosystems can help tackle climate change. For example, mangroves are often cut down for shrimp farming and other industries. But protecting them offers the potential to retain as much, or more, carbon as tropical rainforests, while also safeguarding animals and plants on land and in water.

Mangrove forest, with long, slender roots on display.
Most human activity is limited in this mangrove forest in the Democratic Republic of the Congo.
Lexis Huguet / AFP via Getty Images, CC BY-NC-ND

4. What do you think they should finance this money?

To me, the way they operate – the newly coined Patagonia Purpose Trust that will own and manage the company, and the Holdfast Collective, Patagonia’s profit-funded non-profit organization – will be as important as what they fund.

Based on the research that I am engaged in, I believe they can do more of the good by reflecting on how they work, hopefully in ways that are both fair and effective. For example, they may consider highly collaborative approaches, incorporate flexibility to adapt circumstances, and long-term funding to adapt to green times. It is also essential that indigenous people living in places affected by environmental work have a say and are heard.

Since Holdfast Collective is a social welfare group, rather than a charity, it will be free to emphasize policy reform, which I believe should be a top priority.

Government and international aid agencies are often too constrained by bureaucracy to be able to adapt and adjust their practices in a way that may be needed to address pressing environmental challenges.

Philanthropists are freer in the way they work. This means that lenders such as the Patagonia Trust can provide initial funding to launch new ventures that could later be more heavily funded and expanded by governments.

5. Why are so many people troubled by gifts like this?

In recent years, the scrutiny of philanthropy of all kinds has been increasing. Some of the criticisms target large donors, such as Bezos, whose sources of wealth contribute to the problems their gifts are supposed to solve.

Concerns are also growing about how philanthropy can perpetuate or justify discrimination and oppression, leading to calls for “decolonization”.

Even avid environmentalists express deep concerns about the potential drawbacks of this new model. They are wondering if it could be used to fund causes supported by other wealthy donors distinctly different agendas.

Regardless of any concerns you may have about what the Chouinard family has decided to do, or other billion-dollar donations aimed at climate change, one thing is certain: the cost of doing nothing is sure to be much higher than taking action. , however imperfect.

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