Real Leaders

Patagonia Uses Trump’s $10 million Tax Cut to Help Save The Planet

In December 2017, President Trump announced “an incredible Christmas gift for hard-working Americans” after his allies in the GOP Congress approved a tax cut package in record time. This past Christmas, Patagonia CEO Rose Marcario (above) decided to give their $10 million in unplanned cash back – to the planet. “Our home planet needs it more than we do,” she says.

You can almost hear the muttered lyrics of George Michael’s “Last Christmas” floating from the Oval Office: “Last Christmas, I gave you my heart, but the very next day you gave it away.” While the oil and gas industry will reap billions of dollars in tax savings from the cut in corporate income tax rates, Marcario views their huge windfall “a result of last year’s irresponsible tax cut.” This tax cut will also open up 1.5 million acres on the coastal plain of the Alaska National Wildlife Refuge for oil and gas exploration and drilling. “The timing of this tax cut couldn’t have been worse,” she adds.

Earth is facing its greatest crisis because of human-caused climate disruption. All the extra heat we’ve trapped in the earth’s atmosphere is not only melting the poles and raising sea levels, but it’s also intensifying drought and accelerating the extinction of species. The most recent Climate Assessment report puts it in stark terms: the U.S. economy could lose hundreds of billions of dollars, and the climate crisis is already affecting all of us – mega-fires, toxic algae blooms, deadly heat waves and fatal hurricanes. “Far too many have suffered the consequences of global warming in recent months,” says Marcario, “and the political response has so far been woefully inadequate — the denial is just evil.”

While Marcario has been criticized by some for not using the tax cuts for the benefit of employees, she sees the bigger picture; one where everyone ultimately benefits from a brand doing well. Since joining the company in 2008, Patagonia’s profits have tripled. In 2017, she opened an on-site child care facility at Patagonia’s distribution center in Reno, Nevada, believing that employer-operated child care facilities are the answer to getting more women on company boards and in CEO positions.

“We have always paid our fair share of federal and state taxes,” she explains. “Being a responsible company means paying your taxes in proportion to your success and supporting your state and federal governments, which in turn contribute to the health and well-being of civil society. Taxes fund our important public services, our first responders and our democratic institutions. Taxes protect the most vulnerable in our society, our public lands and other life-giving resources. In spite of this, the Trump administration initiated a corporate tax cut, threatening these services at the expense of our planet.”  

Since 1985, Patagonia has funded grassroots activism as part of their commitment to 1% for the Planet, started by Patagonia’s founder, Yvon Chouinard, that inspires business and individuals to support environmental solutions by donating 1% of company profits. The additional $10 million from their tax cut will go to environmental groups and go a long way towards defending our air, water and land. It will also include support for the regenerative organic agriculture movement, which Marcario thinks will not only slow the climate crisis but could begin to reverse it.

Chouinard has said that catastrophe is here and that we need all the help we can get to address the climate crisis. He said, “Our government continues to ignore the seriousness and causes of the climate crisis. It is pure evil. We need to double down on renewable energy solutions. We need an agriculture system that supports small family farms and ranches, not one that rewards chemical companies intent on destroying our planet and poisoning our food. And we need to protect our public lands and waters because they are all we have left.”

Equities analysts at Barclays have calculated that the 14-percentage-point cut in the corporate tax rate will add $1 billion to the profits of the U.S. oil and gas exploration firms. It’s time too, for more environmentally-minded companies to see their tax cuts as powerful financial weapons in the battle for a more sustainable future.