“We could have chosen any private equity. Why Blackstone?” writes Oatly of the controversial investment.
According to the dairy alternative business, the answer lies in ‘creating the most change possible’.
“We thought that if we could convince [Blackstone] that it’s as profitable (and in the long-term even more profitable) to invest in a sustainability company like Oatly, then all the other private equity firms in the world would look, listen and start to steer their collective worth of $4trn into green investments.”
Why the fuss?
Oatly’s statement comes just days after fans pledged to boycott the brand over its contentious shareholder.
The funding round in question, closed in July 2020, saw Blackstone, Oprah Winfrey, Jay-Z, Natalie Portman, former Starbucks CEO Howard Schultz, and Rabobank Group’s investment arm invest $200m in the business.
The new shareholders now own about 10% of Oatly, which gives the Swedish company a total value of around $2bn.
However in late August, allegations came to light that private equity giant Blackstone has been linked to deforestation in the Amazon rainforest.
“Blackstone is a part-owner of 2 Brazilian firms which are directly contributing to the destruction of the Amazon rainforest (Hidrovias do Brazil and Pátria Investimento) and now they now hold shares in rapidly growing Oatly,” tweeted climate activist Laura Young.
Having asked Oatly what Blackstone’s investment means for the brand’s sustainability impact, Young told the plant-based trailblazer: “I want to keep buying your product, but for now, I’m on pause.”
A year earlier, Blackstone made its position clear on the allegations, which it described as ‘erroneous’ and ‘blatantly wrong and irresponsible’.
The magic word? Profit
Oatly’s decision to stand by its new shareholder stems from Blackstone’s scale. According to the oat drink maker, only a fraction of venture capital ends up in sustainable events, and had it selected a green investor instead for funding, Oatly would have ‘become a fractional part of that tiny fraction’.
In this scenario, the business would have remained ‘off the radar’ of major investment companies, and had ‘zero impact’ on influencing a transfer of investment to green companies.
“Instead, 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 global private equity markets, one written in the only language our critics claim they will listen to: profit.”
In order to achieve global climate goals, Oatly continued “we need to speak a language that the capital markets can understand.”