Patagonia the paragon

This week, the founder of Patagonia gave away his company to two trusts, one for voting shares and one for non-voting shares. The information garnered wide acclaim. I had two initial reactions.

First, I respect the move immensely. Most companies say they believe in this or that, but they rarely make consequential and sacrificial movements in that direction. It wasn’t easy to create a new legal structure over the course of several years, and then irrevocably relinquish your life’s work and fortune to a third party. In other words, the founder has the courage of his convictions, and he made a big sacrifice to stand by them. That’s hard to criticize.

On the other hand, some of his statements seemed a bit silly.

Patagonia is a large company. Yvon Chouinard, Patagonia’s founder, and his family owned about $3 billion worth of shares in a company that has $1 billion in annual sales, according to The New York Times piece.

Yet Chouinard said, “I didn’t know what to do with the company because I didn’t ever want a company. . . . I didn’t want to be a businessman.” That’s a strange statement to include in this interview, given that you don’t run a company for nearly fifty years—one that now racks up a billion dollars in sales every year—by accident. Patagonia has hundreds of stores across five continents, with factories in sixteen countries.

Perhaps, in the beginning, he “started as a craftsman, making climbing gear for my friends and myself,” as the letter on his website reads. But growing, innovating, and sustaining a multi-billion-dollar, global enterprise is a committed effort. If he didn’t want to own a company or be a businessman, what exactly did he want to be? It takes a lot of want-to to get through the long nights, competition, and supply chain issues of running a multinational corporation.

Then there’s this statement: “I was in Forbes magazine listed as a billionaire, which really, really pissed me off,” he said. “I don’t have $1 billion in the bank. I don’t drive Lexuses.” Being a billionaire doesn’t mean you have a billion dollars in the bank. Someone running a multinational, multi-billion-dollar corporation and making sophisticated estate plans knows that.

So, my curiosity led me to read more about the company.

Patagonia is well-known for its work on climate and social justice. To Patagonia, these twin goals are the same. A page on the Action Works section of their website reads “Climate Justice Is Social Justice.” The subhead reads, “The people most impacted by climate change are the ones who live closest to the lands, who are committed to their communities, and who have the least amount of money.”

Again, this is an odd statement for a company famous for its finance-bro vests that sell for $179. The people with the least amount of money—the ones most impacted by climate change—can’t afford the company’s own products.

And then there’s climate impact from the business itself. Again, Patagonia is a large company. It released over 224,000 metric tons of carbon dioxide in 2020. That’s the equivalent of 14,000 Americans’ carbon footprints, or nearly 6,000 Californians’, where the company is based. It’s also about the same emissions as small countries like Burundi, Western Sahara, and Grenada. That’s a lot of carbon emissions for a company that hates carbon emissions.

Ninety-five percent of Patagonia’s emissions come from their manufacturing and supply chain processes. Materials alone account for 84% of its emissions, or 188,000 tons, which is about as much as Turks and Caicos released in 2020.

This is important because manufacturing materials require enormous resources, especially fossil fuels. I just finished reading Vaclav Smil’s How the World Really Works, and it’s fascinating to learn how we as a society make our clothes and food. He wrote, for example, that “in 2020, nearly 4 billion people would not have been alive without synthetic ammonia,” the ingredient that creates nitrogen fertilizers for our crops. One of those crops is cotton, which Patagonia needs to manufacture its garments.

Our material production system is just that—a giant system. Smil wrote, “The mass-scale production of all of [the four primary materials of cement, steel, plastics, and ammonia] depends heavily on the combustion of fossil fuels, and some of these fuels also supply feedstocks for the synthesis of ammonia and for production of plastics.”

Remember that Patagonia requires vast sums of steel, plastics, and cotton to manufacture its clothing. And simply buying carbon offsets, which allows for companies to claim that they’re carbon neutral, doesn’t negate the fundamental reality that a company of Patagonia’s size requires huge amounts of fossil fuels.

To offer a picture of the scale of what Smil’s book describes, he included an appendix to help readers better understand orders of magnitude: Using multiples of common units of measurement helps avoid “writing them out as exponents of decadic logarithms.” Kilo- is ten to the third power, mega- is ten to the sixth power, and giga- is ten to the ninth. The book is full of such enormity.

“Global production of these four indispensable materials,” he wrote elsewhere, “claims about 17 percent of the world’s primary energy supply, and 25 percent of all CO2 emissions originating from the combustion of fossil fuels.”

These are the very materials and processes that Patagonia relies upon to even do what it does. To write about carbon emissions on its website requires carbon emissions to fuel the company and the servers that load that very website. In other words, Chouinard is a billionaire precisely because of fossil fuels.

After reading the piece and thinking a bit, I feel that the company is often represented as the paragon of new capitalism. They advocate for climate and social justice while deriding corporations and billionaires. Yet they release huge quantities of carbon emissions, sell high-priced clothing, and create billionaires by virtue of equity ownership. They once placed a Black Friday ad in The New York Times with the headline “Don’t Buy This Jacket.” Though the company acknowledged the irony in the piece itself, it’s hard to get past such a glaring oxymoron.

I’d argue Patagonia is indeed the paragon of capitalism these days. Capitalists use the earth’s resources to efficiently distribute value to others, making everyone better off. Unfortunately, Patagonia is also a paragon of the oxymoronic morality so common among rich, capitalist Western societies.

Merriam-Webster defines being “just” as “having a basis in or conforming to fact or reason.” Criticizing capitalism, billionaires, and carbon emissions while being a capitalist billionaire carbon-emitter doesn’t seem to conform to fact or reason. Maybe Patagonia, in this case, could do with a little more justice.