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Ethical business   |   Climate change   |   Politics

Oatly faces backlash over investor choice

Oat milk brand Oatly has been forced to defend its funding from an investment firm with alleged links to deforestation in the Amazon and whose CEO is a major donor to the Trump campaign.

Private equity firm Blackstone invested $200 million in Oatly in a deal confirmed in July, and which has in the last week faced scrutiny online. The criticism stems from another company that Blackstone invests in, Brazilian infrastructure company Hidrovias, which has been accused of links to deforestation in the Amazon, by investigative outlet The Intercept. Blackstone denies any link to deforestation via Hidrovias.

Blackstone chief executive Steve Schwarzman is known to be a prolific donor to the Trump re-election campaign, and was described in a Bloomberg article published this summer as “one of the president’s most ardent Wall Street backers”. Since taking office, Trump has continuously rolled back environmental regulation in the US, backed the fossil fuel industries and aired his own scepticism over the reality of climate change.

Oatly has built its name around sustainable farming, low carbon and ethical business principles, as an alternative to dairy, and a self-described “oat-based sustainability movement”.

Demand for its oat milks has skyrocketed across the world, the company said, leading it to search for new funding to continue expansion. After a Twitter thread by zero waste campaigner @LessWasteLaura brought the issue to light, Oatly issued a statement defending its decision.

“Getting a company like Blackstone to invest in us is something we have been working on to create maximum change to benefit the planet,” it said.

Oatly
Oat expansion: Demand for Oatly is 'skyrocketing' worldwide. 

“Our bet is that when Blackstone’s investment in our oat-based sustainability movement brings them larger returns than they would have been able to get elsewhere…a powerful message will be sent to the global private equity markets, one written in the only language our critics claim they will listen to: profit.

“If we ever want to have a chance of reaching the global climate goals of cutting the greenhouse gas emissions by 50% before 2030 and reach net zero emissions by 2050, we need to speak a language that the capital markets can understand.”

But the brand has faced widespread criticism on social media from activists and campaigners, and it has been delisted by Sheffield independent retailer Beanies, which said in a statement to customers: “As a small independent retailer with ethical principles at our core, we must always reassess whether or not we want to continue selling products with backers whose complex, global investment backgrounds can make it unclear exactly who and what they are involved in.

“Oatly is one of our most popular brands and has been a great option for vegan alternatives to milk, cream and custard for many years so we are of course disappointed to say goodbye.

“However – ethics rule here at Beanies and we are about offering ethical alternatives to the status quo. So we won’t be buying any more Oatly from our suppliers once our stock runs out.”

Responding to the criticism on social media, Oatly said: “We are convinced that helping shift the focus of massive capital towards sustainable approaches is potentially the single most important thing we can do for the planet in the long-term. We realize that all of you may not share this view and disagree on the right path forward to create a more sustainable world.”

    Comments

    Tomjoad

    6 Days 6 Hours

    An important debate has been raised here. However eloquent Oatly defend their action surely Schumacher was right and small is beautiful. There are plenty of smaller ethical investors that should be approached in an attempt to direct capitalism into a more ethical direction. Beanies has taken the right approach and in this article I believe wins the debate.

    0 Reply

    Doingmybest

    1 Day 15 Hours

    This kind of situation illustrates how difficult it is to make ethical choices. As soon as the ownership chain lengthens to more than one or two it becomes impenetrable to the average consumer.

    0 Reply

    VeganPrincess

    1 Day 14 Hours

    Riverford themselves need to question their ethics as they are sellling livestock products . Animal agriculture is the root cause of pandemics. When humans gather animals together to farm they create the flu factories. The anatomy and physiology of humans is that of a frugivore requiring a 100% plant diet to maintain health. We already know the answer ! unfortunately profit comes before health, environment , ethics etc.

    0 Reply

    SuzanneRosemary

    1 Day 13 Hours

    In my view Oatly’s arguments are misleading. It’s a case of ‘If you can’t beat them, join them’ & it was the same argument given to me by a French beauty company when I asked if they were 100% cruelty free & they told me they supplied China, who insist on animal testing of ingredients. The argument was ‘If we trade with them we can influence them to change’.
    Well I doubt that. All the while we deal with people & businesses whose standards are so different from ours we pollute the purity of our message & lower the bar for ourselves & others who are looking for an example or a way forward.
    If we are to have integrity, be ethical & conduct our businesses in a way that puts the planet & all life first then we should do just that & be totally transparent & ethical all they way. If Oatly needed investment I have no doubt somebody with matching ethics would have been found .... but maybe they weren’t offering such good terms. It all comes back to the money, what a pity. I have bought loads of Oatly milk In the past but I won’t be buying it anymore.

    0 Reply

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