Corporate Social Responsibility

Speaking the Language of Social Responsibility

Patagonia says they’re “in business to save our home planet.” What does that really mean?

Julia Hammond

November 22, 2023

“[I]t is becoming increasingly obvious that a freedom of choice and a delegation of power such as businessmen exercise would hardly be permitted to continue without some assumption of social responsibility.”

In 1953, Howard Bowen published Social Responsibilities of the Businessman—the book that provided the foundation for the movement towards “corporate social responsibility,” which took hold in the US a few decades later. In a sense, Bowen’s book tells it like it is: it acknowledges that corporate activity has a tangible impact on society writ large. It also represents a (barely-implicit) admission that, even in 1953, corporations and their leaders were late to the game: the workers and consumers upon which corporate entities depended for their profits, their power, and their legitimacy had already figured that out.

Corporate leaders could no longer go on pretending that the accumulation of profits served the “greater good” of humanity. If big businesses wanted to maintain the legitimacy of the system that allowed them to accumulate near-unlimited money and influence, they’d have to shape up. The profit-making could continue, but it had to be accompanied by “giving back” some small portion of what they had extracted.

Bowen’s baseline assumption was that social responsibility “ha[d] meaning only in relation to the goals or values which we seek from our economic system.”

the language of corporate social responsibility is everywhere. And it is language first and foremost.

Seventy years after the publication of Social Responsibilities of the Businessman, the language of corporate social responsibility is everywhere. And it is language first and foremost. The concept of corporate social responsibility was created by profit interests for profit interests. It was not for the factory workers, or the environment, or the benefit of anyone to whom the “social responsibility” efforts were directed. It was, and is, a mechanism by which large corporations maintain their legitimacy as the centerpiece of American society.

Corporate Social Responsibility and Greenwashing

The sheer size of some of these companies makes it difficult to grasp their true impact, and equally difficult to figure out which ones are doing relatively less harm. And the language of corporate social responsibility allows companies to play to our sympathies; many corporations seamlessly integrate sustainability, equity, and environmental-friendliness into their marketing materials.

In 2018, Starbucks banned plastic straws, replacing straw lids with (thicker, heavier) plastic lids that work without a straw. Meanwhile, six billion of its disposable cups (which are not recyclable or compostable) end up in landfills every year. In 2008, Starbucks promised to make 100% of its cups reusable or recyclable by 2015. (It hasn’t succeeded.) Even if Starbucks had succeeded in improving reusability and recyclability, it would still be worth noting that their (and many other companies’) “eco-friendly” initiatives focus only on the wastefulness that customers can see and get angry about–reducing plastic waste–and not on the less-visible but often more critical impact of greenhouse gas emissions.

The bottled water conglomerate BlueTriton chooses names for its bottled-water brands (like Pure Life, Poland Spring, Zephyrhills, Deer Park, and many others) that are reminiscent of nature and wildlife. It decks their plastic bottles out in blue and green; on its website, it advertises its “sustainability” commitments against a backdrop of pine trees. The company’s April 2021 rebrand was meant to “reflect [BlueTriton’s] role as a guardian of sustainable resources and a provider of fresh water.” Meanwhile, BlueTriton sends hundreds of millions of pounds of plastic to U.S. landfills each year (though it tells consumers that their recyclable bottles “keep plastic out of landfills”). The company also has a history of draining aquifers to get the water that it sells, and has been caught extracting water from national forests without authorization.

More than just telling customers that they’re “going green,” Patagonia’s messaging boldly goes beyond what most other companies are willing to say: “we can prioritize purpose over profit.”

Oil and gas giant Chevron is fighting a (steep) uphill battle when it comes to convincing consumers that it is “protecting the environment,” but that hasn’t stopped it from advertising that it’s committed to a “lower-carbon future.” Needless to say, the company is lying: it name-drops the Paris climate agreement without actually making any commitment to align its activities with the Paris goals.

Companies that engage in “greenwashing” market their products or brands to consumers who care about the environment without meaningfully improving the business’s environmental impact. We see the hallmarks of greenwashing everywhere: companies make vague promises, use meaningless terms like “eco-friendly” and “natural,” avoid setting numerical goals, and push the idea that saving the environment requires a “collective approach”—“all of us” acting together.

This strategy is extremely effective, in part because it shifts responsibility from the corporation to the consumer. The companies themselves tell us that we are supposed to care about our personal “carbon footprint.” We’re expected to “shop sustainable.” (We are all responsible for recycling those plastic water bottles.) And, of course, buying the companies’ products will help us achieve the expectations that have been set for us. Greenwashing allows big companies to leverage the language of corporate social responsibility while failing to take any action that might be characterized as “socially responsible.”

Patagonia and Corporate Social Responsibility

Patagonia, a company that has been making outdoor clothing and hiking gear since 1973, is undoubtedly pushing the limits of this conversation. More than just telling customers that they’re “going green,” Patagonia’s messaging boldly goes beyond what most other companies are willing to say: “we can prioritize purpose over profit.” The company’s mission, it says, is to utilize business to protect nature. It highlights Indigenous climate advocacy and embraces the language of decolonization. It recommends that customers keep their Patagonia clothes for longer, make repairs rather than buying new products when possible, and trade in their used gear rather than throwing it away. On the company’s website, you can “take action” by signing petitions asking political leaders to commit to environmental justice.

In 2011, the company published an ad in the New York Times that featured a picture of one of Patagonia’s bestselling winter jackets. In bold writing across the page, the ad read “Don’t Buy This Jacket.” The company touted this as an effort to raise awareness about overconsumption and encourage consumers not to buy more than they need.

Most recently, the company has expanded into selling fish, meat, beer and natural wine and promotes regenerative organic farming–because “if we really want to protect our planet, it starts with food.” Patagonia Provisions was founded to expose the elements of the food industry that are contributing to climate change and other environmental problems. It makes food products that “showcase” sustainable production options. When it uncovered human trafficking practices in its Taiwan textile mills, it led an effort to reform the standards in the mills. Its website is not just a place where it sells clothes, but a genuine educational tool.

Perhaps for these reasons, Patagonia is widely regarded in the business world as a bastion of responsible capitalism. There is an apparent consensus that Patagonia is “a cut above”—really putting its money where its mouth is. In a Tweet early this year, Rhode Island Senator Sheldon Whitehouse shared that, in his opinion, if a corporation isn’t “Patagonia or Ben & Jerry’s,” it’s “greenwashing.”

It’s hard to tell whether Senator Whitehouse is right. Some of Patagonia’s projects and activities are reminiscent of greenwashing. The company’s Worn Wear program enables customers to sell their Patagonia clothes back to the company to avoid throwing them away, which is great–but sellers are compensated “up to 50%” of the resale price in store credit rather than cash. Needless to say, that money can only be used to buy more Patagonia products. If Patagonia wants consumers to consume less, why is it producing so much? Is encouraging customers to sign a petition asking President Biden to “build back fossil free” really “activism,” or is it just another way to make customers feel good about spending more money on Patagonia products? Is making a pair of limited-edition shorts with an inner tag that reads “vote the assholes out” really doing anything, or is it just making customers feel like they’re part of an elite insiders’ club?

It’s important to note that it’s not even clear that Patagonia is making its clothes particularly ethically. It advertises that 69% of its materials are “made with recycled inputs,” which provide clarity about how much of the material is actually recycled. They’ve set a goal of being “carbon neutral” by 2025, but it’s hard to decipher whether the company’s carbon capture and mitigation efforts will really help the planet.

The company appears transparent about some elements of its social impact, but it has failed to take meaningful action to address serious problems. According to Patagonia, the company made a “poor choice” in search of low-cost labor in the early 2000s. The reversal of that decision came when the company realized, not that their products were produced through the exploitation of human beings, but that cheap labor led to “poor product quality, late delivery, expensive rework, long inspection times…and loss of profit.” The company is a founding member of the Fair Labor Association, and yet the workers making their products do not receive a living wage. It’s difficult to substantiate Patagonia’s claims that its suppliers adhere to strict labor standards when they haven’t addressed the realities of their supply chain since 2015.

Like many other companies, it leverages the language of social responsibility into currency.

Patagonia’s social responsibility efforts are, undoubtedly, a marketing strategy: the company strikes a tone that speaks to a particular subset of consumers. Like many other companies, it leverages the language of social responsibility into currency. The company’s reputation for sustainability and ethics has helped create a strong brand identity. “I definitely feel like I have a better sense of their narrative,” says Jared Solomon, who has bought Patagonia gear in the past. Getting clothing that stands up to the elements is his first priority, but on balance, he says, he “would always look to a company like Patagonia, that I knew was as ethical as possible” before checking out other brands.

The company’s founder, Yvon Chouinard, has similarly crafted an impressive personal brand. Profiles in the Guardian, the New York Times, the New Yorker, and other news outlets glowingly describe him as a crunchy, off-the-beaten-path kind of guy, who spends half his time fishing and kayaking and hates big business. Chouinard is adamant that he “never wanted to be a businessman…all [he] ever wanted to be was a craftsman.”

Patagonia’s unique marketing strategy is a masterclass in smoothing over cognitive dissonance. “Don’t buy our stuff,” it says. “We’re a corporation and we know corporations are bad.” That cognitive dissonance also extends to their “preppy and elite” consumer base, which seems strikingly at odds with their earthy-crunchy branding. “Let’s be honest, this is a luxury product. I usually see Patagonia when I talk to rich attorneys or management consultants or investment bankers. They’re the chief purchasers of Patagonia stuff and the stuff is really expensive,” says professor Holger Spamann. Patagonia sells clothes to the type of guy that Chouinard hates. “Venture capitalists are such assholes,” Chouinard once quipped in an interview with the New Yorker. It’s no secret that corporate executives (and well-funded law school student organizations) love to spend money on branded Patagonia gear.

Put in the most charitable light, maybe Chouinard started off as the craftsman he says he is, and then at some point decided that he was going to make really expensive goods so that he could make them at scale in a relatively ethical way. It’s expensive to “shop sustainable.” One Patagonia quarter-zip “Better Sweater” will run you a cool $149 (for the women’s style, $129 for men’s). A down jacket costs $279. They’re high-quality clothes, and they last a long time. As a skeptical outsider though, it’s difficult to ignore the surface-level divergence between the image Patagonia curates, and many of the customers who buy their products.

A person stands with their back to the camera looking at a large waterfall while wearing a Patagonia backpack.

Image provided by Unsplash, taken by Ryan Richards

“Earth is now our only shareholder.”

In September 2022, Patagonia announced that “Earth is now our only shareholder.” Catchy! A wide variety of media outlets released articles titled with some variation on “Patagonia CEO Gives Away Company to Fight Climate Change.” I was skeptical.

A little background on the reorganization: In August, the family irrevocably transferred all of the company’s voting stock (2% of the total shares) into the Patagonia Purpose Trust, which is overseen by the Chouinard family. The Patagonia Purpose Trust is a “perpetual purpose trust” established to protect the company’s independence and values. While it holds all the voting power, it has no right to receive any dividends from Patagonia’s profits.

The other 98% of Patagonia shares were transferred into a 501(c)(4) called the Holdfast Collective. All of Patagonia’s profits moving forward will go to the 501(c)(4). The Patagonia Purpose Trust will then direct the use of those funds in accordance with its stated mission: “fighting the environmental crisis and defending nature.” Patagonia changed its corporate structure, according to the company, in order to “put more money into fighting the crisis while keeping the company’s values intact.”

Yvon Chouinard is 84 years old, so it’s clear that this isn’t just a charitable gift. “I think of it more as a succession plan than a restructuring plan…the default would have been for the Chouinard family, as [Yvon Chouinard] dies, to pass on those shares to somebody else: to sell the company, go public, or otherwise,” says Andrea Armeni, executive director of Transform Finance. Patagonia was a closely held company to begin with—Chouinard and his family owned all of the shares. This gave Chouinard more freedom than most CEOs to unilaterally dictate the future of his business without fear of it being taken over by a new owner with a less-charitable vision for the company. Rather than sell Patagonia for its full value (about $3 billion) and donate the profits to charity, the Chouinard family retained control of the company and pledged that all the business’s profits—about $100 million per year—would go toward combating climate change and protecting undeveloped lands. Instead of “going public,” the company was “going purpose,” it said.

Chart showing Patagonia’s global revenues from 2017-2021

Chart provided by Statista

While Chouinard framed the reorganization as revolutionary (“[T]here were no good options available. So, we created our own”), it’s really not. Many other companies, especially in Scandinavian countries, are organized along a similar model, says law professor Holger Spamann. Major European companies like Bosch, Carlsberg, Ikea, and Rolex are controlled or owned by foundations that make large grants to charitable causes. (Assuming for the sake of argument that the “foundation-owned” model is good for the world, then it’s encouraging that these companies operate sustainably under similar governance structures, but this model is certainly not an invention of Patagonia’s own making.)

Like everything Patagonia does, the tone of this announcement was carefully calibrated to seem transparent and bold. It also echoed the language of greenwashing, employing a familiar emphasis on collective action. “If we have any hope of a thriving planet—much less a business—it is going to take all of us doing what we can with the resources we have,” the webpage proclaims.

The upshot

The practical meaning of Patagonia’s promise remains unclear. Perhaps Chouinard’s choice to reorganize the company is a response to his own misgivings about the massive corporation he built over the last fifty years. In a 2016 interview, he publicly expressed skepticism about what his company could be capable of doing: “I’ve become cynical about whether we can have any influence…Everyone’s just greenwashing. The revolution isn’t going to happen with corporations. The elephant in the room is growth. Growth is the culprit.” What Chouinard calls cynicism is undoubtedly correct. Despite the company’s grandiose pronouncements about saving the planet, Patagonia isn’t going to save the planet – and Chouinard knows it.

That said, it’s not nothing. Armeni believes that this move really is “a very fundamental change. The [owners] are saying, ‘we will not get any of the economic value’…I don’t really see greenwashing here as the problem, because it is a big deal.” If greenwashing is pretending to do something good, Patagonia isn’t just pretending, they’ve actually changed something about the way their company works. Compared to the other options on the table, “it’s a pretty radical…move.”

Armeni sees the problem as something broader and more systemic: “It’s still ultimately billionaires that get to determine the shape of the world.” If Patagonia is doing something good, that’s nice, “but who gave [them] the mandate? Where’s the accountability?” 501(c)(4) organizations are often used for political lobbying purposes. Crossroads GPS, a right-wing organization recently founded by Karl Rove, is a 501(c)(4). 501(c)(4)s are often affiliates of super PACs. There is very little oversight regarding where and how money is spent, so long as the organization’s primary purpose in some way promotes the “common good.” The Holdfast Collective can engage in an unlimited amount of lobbying, and the people in charge of the Patagonia Purpose Trust are accountable to no one but themselves.

“It’s still ultimately billionaires that get to determine the shape of the world.”

If the company’s profits are truly going to help the planet and not line the pockets of Patagonia’s owners, why is the company putting so much time and energy into marketing? Aren’t there other, better ways to save the planet than by selling jackets? Spamann believes Chouinard’s commitment to Patagonia’s mission provides some answers. He agrees that Patagonia is doing a lot of marketing around this restructuring, and believes that a consistent brand identity centered around responsible business helps insulate the company from the threat of takeover by entities that don’t share the company’s core values. He also theorized that the company could be making an effort to divert market share away from less-environmentally-conscious companies and towards Patagonia, a company that, at the very least, engages in harm reduction strategies that its competitors don’t. If buying Patagonia is better for the planet—even marginally better—then it’s consistent with Chouinard’s mission to pair the reorganization with a big marketing campaign. Armeni, on the other hand, does not think this is a strategy to get a bigger market share. “If you ask ten people on the street” how Patagonia’s corporate governance is structured, “they’d have no idea what you’re talking about.”

“Maybe it’s wishful thinking on my part,” Armeni says, but maybe Patagonia is hoping to “have an ancillary impact in demonstrating how one could run and own corporations in different ways.” Perhaps they are making a point: that “brands [should] have something else in mind beyond profit maximization.” Armeni hopes that people will begin to see profit-primacy as an aberration and create new models that add more value to communities than the value they extract. Solomon is skeptical, but acknowledges that as a consumer, his choices are constrained: “I [think] of [Patagonia] as…as more sustainable, definitely anti-corporate as a for-profit company can be,” he says.

Like many other American corporations, Patagonia has deftly adapted Howard Bowen’s original concept of “corporate social responsibility” for the purposes of building a brand and a committed consumer base. Unlike many American companies, though, some of its actions could be characterized as “socially responsible.” With the limited information we have, it seems as though Patagonia is actually less bad for the world than many other businesses, including other outerwear companies.

The big question that remains is whether a corporation like Patagonia could ever really be good for the world, and not just “less bad.” Could such a large entity ever lead to increased investment in vulnerable places and communities, instead of endless extraction and starvation? The reality is that all of the company’s money—and the power that comes along with it—remains in the hands of billionaires, with no accountability mechanisms keeping their choices in check.

Patagonia, of course, tells us that they can leverage business for social good. According to their story, this reorganization of their business is the next step in that journey. The company’s mission statement is “Patagonia is in business to save our home planet,” despite Chouinard’s public acknowledgment that that promise might be a lie. For now, it remains impossible for consumers to know what else might be covered up, or smoothed over, to maintain the legitimacy and believability of the mission Patagonia shares with the world.