Making bold statements about addressing the climate crisis has become de rigueur in the corporate world over the past few years. But this was taken to a whole new level when the founder and owner of the outdoor clothing company Patagonia, Yvon Chouinard, announced that his family was transferring 98% of the company’s stock to a newly created not-for-profit organisation dedicated to combatting climate breakdown.

Chouinard was applauded for “giving away” his company for the planet. He himself claimed that it was “turning capitalism on its head”. The widespread admiration of Chouinard is a telling sign of popular dissatisfaction with the excesses of the global corporate economy and its billionaire bosses. But the question remains: does this giveaway mark any fundamental change to the system?

The announcement was the conclusion to Chouinard’s 50-year commitment to being in business to save the planet. In a letter he released last week, headed “Earth is now our only shareholder”, he spelled out the next chapter for Patagonia. The ownership of the company will be transferred from the Chouinard family to two entities: a trust and a non-profit organisation. The stated aims of this bold move are to “protect the company’s values”, fight the environmental crisis and defend nature.

Practically, Chouinard’s plan means that each year about $100m of non-reinvested profits will be given to the non-profit, called Holdfast Collective. Holdfast will own 98% of Patagonia, and all of it in non-voting stock. The exact nature of the work Holdfast will do has not been specified, other than the very general idea of its environmental purpose. Patagonia describes this purpose as to “fight the environmental crisis, protect nature and biodiversity, and support thriving communities”.

Holdfast is an organisation recognised as tax-exempt under the US Internal Revenue code 501(c)(4). This means that, unlike public charities, it is legally allowed to engage in political activity.

Meanwhile, only 2% of the company, but all of the voting stock, goes to the Patagonia Purpose Trust. This is the organisation Patagonia says has been “created solely to protect our company’s values and mission” of saving the planet. That means the trust has veto power over decisions such as the composition of the board of directors, its organisational structure and the company’s operations.

So, no longer being Patagonia’s owner, what will Chouinard’s role be in the future? The Patagonia website says, “The Chouinard family will guide the Patagonia Purpose Trust”, will “continue to sit on Patagonia’s board”, and will “guide the philanthropic work performed by the Holdfast Collective”.

It would appear that, while Chouinard is giving away the ownership of his company, he is not giving up control. But is what he is doing qualitatively different from the actions of other philanthropic billionaires? These days, like the robber barons of old, the global elite are queueing up to give away their fortunes to good causes. Just look at Bill Gates and Warren Buffett’s Giving Pledge, where they and more than 200 other of the richest people around the world have committed to giving away most of their wealth to address problems facing society. Gates’s own foundation shelled out a staggering $6bn in grants and charitable contracts in 2021.

What makes Chouinard different is that, rather than making an abstract pledge, he has literally relinquished his assets. He is no longer a billionaire. With this move his ambitions are as explicitly political as environmental. “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 told the New York Times.

That Chouinard and others contribute to addressing the climate crisis is undoubtedly a good thing; after all, governments worldwide have failed for decades. The rub, however, is that this is all part of a well-developed global system where responsibility for dealing with public and social problems is increasingly taken on by private interests. And, as we see with Chouinard, it is an empowered elite who are able to call the shots.

Rather than addressing the underlying political and economic system that creates inequality, billionaire philanthropy provides it with a moral justification. They may decide to give away their money, but it is still them making the decisions. The rest of us just have to passively rely on their benevolence. What exactly the Holdfast Collective will spend its $100m a year on is as yet undisclosed. One key question, though, is whether it will be open to public scrutiny and accountability.

We live in an era in which business owners are taking over as society’s moral arbiters, using their wealth to address what they see as society’s greatest problems. Meanwhile, the wealth and number of the world’s billionaires grows, and inequality stretches society to breaking point.

It is great that Chouinard is putting his company to work for the future of the planet. What is not great is how our lives and our futures are increasingly dependent on the power and generosity of the rich elite, rather than ruled by the common will of the people. As a global society, we can’t stand back and hope that future billionaires decide to give away their wealth in the service of the planet – there is far too little time left for far-fetched luxuries like that.