The complexities of the debate into sustainability were laid bare recently with the investment made by Blackstone Group into Oatly, the rapidly growing firm that produces and sells oat milk and related products. Blackstone is “a global investment business investing capital on behalf of pension funds, large institutions and individuals” and their head of growth investments, Jon Korngold, justified the $200 million investment saying, “Oatly is one of those companies that does well by doing good”.
But there were immediate accusations that Oatly has “sold out”. Twitter went mad, with this comment from “Karina” being pretty typical. “I will stop buying @oatly. Blackstone has shown no mercy when it comes to their business model…. Sad, but you have joined the dark side …”
Oatly defended itself vigorously, saying that they can help to change the way Blackstone itself thinks and “we hope that this will be the first step to guide others to embrace that future investments are green”. So why all the fuss?
Well, at least it seems clear that oat milk is a positive product from an environmental perspective. It avoids the carbon emissions related to cows and dairy farming, as well as bypassing animal welfare issues. It is also considered better environmentally than almond milk, which requires huge amounts of irrigation (water use). The genetically modified milk replacements coming to market are interesting, but are heavily processed rather than having the “natural” vibe of Oatly.
But the situation with regard to Blackstone is more complex. The Intercept website claims that Blackstone is part-owner of two Brazilian firms that are directly contributing to the destruction of the Amazon rainforest. The companies, Hidrovias do Brasil and Pátria Investimento, “have wrested control of land, deforested it, and helped build a controversial highway to their new terminal in the one-time jungle, all to facilitate the cultivation and export of grain and soybeans”.
That new road is opening up the forest. “The shipping terminal at Miritituba, deep in the Amazon in the Brazilian state of Pará, allows growers to load soybeans on barges, which will then sail to a larger port before the cargo is shipped around the world”.
But Blackstone and the firms say that this development actually has led to a significant reduction in overall carbon emissions, “through lower congestion and allowed the more efficient flow of agricultural goods by Brazilian farmers.”
That balance between the environment and the rights of people to exploit natural resources for their own benefit is a very challenging issue in many countries and situations. What are the ethics and morals of the developed world telling other much poorer countries and people that they can’t become wealthy by adapting their own environment (as we did in Europe and US did over many centuries)? Or should the Amazon rainforest be considered a “global asset” rather than the “property” of Brazil and other South American countries? How could that possibly be managed?
We will have to see what happens with Oatly and Blackstone, but there is a parallel which might make us hopeful. I remember way back in 2000 when upmarket ice cream producer Ben & Jerrys was bought by Unilever. Ben & Jerrys had super cool, hippie-type branding, using high quality natural ingredients and operating with real social conscience. Many thought that by selling to a huge global monolith like Unilever the firm was literally “selling out”, which didn’t go down well with many customers.
However, within not too many years, Unilever embraced its own extensive sustainability programme, which has become one of the most respected in the business world. Maybe that wasn’t because of the Ben and Jerry’s acquisition, but maybe that event did contribute in some small way. And that story does highlight that organisations can and do change. Let’s hope that Oatly becomes a beacon of good practice within Blackstone, and that firm follows in the footsteps of Unilever.