What Oatly’s choice of investors tells us about conscious consumerism and the need for power beyond purchasing

What Oatly’s choice of investors tells us about conscious consumerism and the need for power beyond purchasing

Controversial news has come to light in the sustainability community this week which again highlights the need for systemic change vs ‘conscious consumerism’ and individual action.

Back in July 2020, Swedish alt-milk brand Oatly sold a minority $200m stake to a group of high-profile investors, including American private equity firm Blackstone, to fund their global expansion. 

While demand for traditional dairy milk is falling, plant-based alternatives are becoming increasingly popular with sustainable consumers and health-conscious shoppers alike.

High profile investors in Oatly now include actor and vegan advocate Natalie Portman, Oprah Winfrey and former Starbucks CEO Howard Schultz. 

But it is their decision to work with Blackstone that now sees Oatly facing calls for customer boycotts and criticism from sustainability influencers on social media.

Image by Madalyn Cox on Unsplash

For many years, the sustainability movement has been campaigning to raise awareness of ethical and sustainable alternatives and encouraging them to become more mainstream – so on the surface, the rapid expansion of a plant-based brand like Oatly, and investment from high profile players, would be considered good news.

However, the funding round was led by Blackstone Growth, with their funds accounting for the largest chunk of Oatly’s $200m investment. 

Eco-conscious Oatly drinkers might be disappointed to learn that their new investor is a driving force behind deforestation in the Amazon rainforest

Blackstone has helped facilitate a boom in agribusiness in the region, by financing a transit port and commercial highway that runs deep into the rainforest, making it easier and more profitable for farming and mining companies to extract goods from the area. 

However, this also drives rainforest destruction as wider areas are being burned to make room for growing grains or soya beans.

Destroying the rainforest is undoubtedly accelerating the negative impact of the climate crisis. Meanwhile, the farms that are being created on this land can only grow crops for 10 to 15 years, before they turn into equatorial deserts and more land needs to be cleared. 

Blackstone’s CEO Stephen Schwarzman is also one of President Trump’s biggest financial backers – financially supporting political interests to ensure that the legislation continues to work in his favour so these unsustainable business practices can continue.

Blackstone now owns 10% of Oatly, which doesn’t give them much voting power in terms of steering the direction of the company, but it does mean that profits generated by the plant-based brand will likely be reinvested into activities that undermine their sustainable mission.

Oatly’s Chief Executive said that getting a major investor like Blackstone involved is a sign that the world is moving in a “new, more sustainable direction”, and Oatly have this week defended their choice of investors on Twitter – again reinforcing their position that this is a way of ‘steering capital into sustainability’, and funding the rapid growth they have been experiencing – which will help plant based alternatives become even more mainstream.



While Blackstone’s choice to invest in a sustainable brand may be seen as a positive signal that the future of business is green, it’s clear that they have not made this decision with only the environment in mind. 

As any investor would, they have recognised the growing plant-based trend, analysed the market and made what they believe will be a profitable decision. Especially considering that this demand is largely being driven by millennials and Gen Z consumers – who are rapidly becoming the biggest spending power – so it’s likely that the plant based market will continue to grow for years to come.

These younger audiences might be using their purchasing power to support the planet, and this investment may give Oatly greater influence and resources to expand their operations, but unfortunately Blackstone’s share of the profits will likely still be reinvested into activities, infrastructure and political parties which undermine the sustainable progress that Oatly is trying to make.

Once again we see that short-term shareholder profit is prioritised over the needs of the planet, and conscious consumers (who think they’re making the right choice by buying dairy alternatives) are unwittingly financially supporting the perpetrators.

But is a boycott of Oatly the right way to go? 

And how can conscious consumers really challenge corporate power?

As individuals, we are constantly told that we are responsible for lowering our carbon footprint, flying less, buying less, switching to reusables to fight single use plastic and choosing to ‘vote with our wallet’ for a better world. 

If we don’t like a brand’s behaviour, we’re encouraged to boycott them to send them a message and create a PR storm.

With online criticism of Oatly ramping up, it certainly feels as if the brand might be about to face a growing scandal over their choice of investors, and some conscious consumers will undoubtedly choose to move away from the brand long term.

But this isn’t just a problem with Oatly, it’s a symptom of a much wider broken system.

If we want sustainability to go mainstream, we need to encourage the mass market to embrace sustainable products. Which means we need to make them more widely available, convenient and affordable. 

This relies on major infrastructure, not to mention huge marketing budgets, to allow green alternatives to compete – especially in saturated markets like food and drink. 

For brands, this is not achievable without seeking investment. And while they can look for investors who share their values, they can’t control what those investors do with the rest of their portfolio, or how they use their profits.

Many voices in the sustainability space who recognise that the capitalist system is the problem are now calling for an attitude of degrowth – where brands don’t seek shareholder profit at all and avoid “selling out” by choosing to stay small instead and put their environmental mission above all else. 

However, whilst this might be the best choice for the planet, it potentially keeps sustainable products within a niche market, selling to already ‘converted’ consumers – which doesn’t create the widespread change needed at the pace required to tackle the climate crisis.

Until the economic system around them changes, brands that focus on degrowth as a way of achieving sustainability may not make a big enough impact to create meaningful change.

Working within a capitalist system, each individual brand is currently able to decide what is right for them when it comes to seeking investment and where to accept it from, just as consumers choose which brands to buy from and which to boycott.

As consumers, if we want to change the system, we need to push back against corporate power, but this can feel daunting – if not impossible. 

Especially when you consider that more than 70 percent of global emissions are being caused by just 100 companies, controlled by a handful of billionaires. 

And when even the sustainable brands we love to support are seen to “sell out” and compromise their values in order to achieve their goals, It’s often hard to believe that our individual purchasing choices have any power at all.

Yet we are often told that unsustainable products only exist because people still buy them – which would suggest that consumerism clearly does have an influence. 

But are brands just hiding behind supply and demand?

In January 2020, Coca-Cola, one of the biggest producers of plastic waste, announced that they would not stop producing single-use bottles because consumers still want them – despite the fact that the world’s oceans are already clogged with 150 million tons of plastic, and the company are now facing a lawsuit over their contribution to this pollution. 

The problem with conscious consumerism is that it pushes responsibility onto the individual consumer to “make the right choice” and vote with their wallet. 

But the individual is often the person with the least amount of resources or power to influence change.

By pushing us into conscious consumerism, brands are able to hide behind the supply and demand argument to continue producing unsustainable products at an unsustainable rate (and seek investment in order to do this), causing environmental damage and perpetuating the broken capitalist system which keeps us trapped in the climate crisis.

Even the very concept of ‘carbon footprints’ was devised by Big Oil as a way of making individuals responsible for heating up the planet. 

British Petroleum (BP) coined the phrase when they unveiled their “carbon footprint calculator” in the early 2000s, in a PR campaign which successfully deflected attention away from the environmental damage caused by these corporate giants who are still producing 3.8 million barrels of oil per day.

And this isn’t the first time PR has been used to shift responsibility. 

In 1971 an American television ad run by nonprofit group Keep America Beautiful promoted the anti-littering catchline “People Start Pollution. People can stop it.” 

But what many didn’t realise is that the group was funded by beverage and packaging giants including The Coca-Cola Company and PepsiCo, who are responsible for producing the plastic bottles that cause the pollution in the first place.

So in the face of corporate power, how can consumers influence change in a meaningful way, when we’re trapped in an unsustainable system?

Wealthy people have a disproportionate negative impact on the planet. 

Being wealthy doesn’t just mean higher levels of consumption. It also gives you more political influence. The rich fund political parties and campaigns, have control over corporations and access to lawmakers and lobbyists. 

The wealthy hold power over the businesses and industries which produce the majority of carbon emissions and exploit the majority of natural resources. 

The wealthiest one percent is made up of billionaires who have made their fortunes from the carbon-intensive fossil fuel industry and are directly responsible, through consumption or control, for the majority of the world’s emissions.

It’s no real surprise then that the average consumer is left feeling overwhelmed and powerless when it comes to the climate crisis. 

Our entire economy, political system, lifestyles and global relations will need an overhaul if we’re going to find solutions that work for everyone, and we’re running out of time to do that.

By making the consumer responsible for ‘doing the right thing’, companies are able to shift their production to ‘conscious collections’, eco-friendly materials and recycling schemes without producing any less, which means they can keep their profit margins high. 

Meanwhile, sustainability goes unregulated and consumers are left shaming each other for their unsustainable behaviour, distracting them from lobbying the government or pushing back against corporate power to create real change.

Many eco-aware citizens already know that ‘conscious consumerism’ isn’t enough to solve the climate crisis, because it doesn’t tackle the underlying issue of mass production, waste and the pursuit of endless growth and profit – it merely shifts the problem to better materials and imperfect end of life solutions. 

There is currently an underlying tension between the demands of tackling climate change, and the more basic business imperatives of profit and shareholder value. 

Companies and CEOs are driven by short-term shareholder profit, and as entrepreneur Richard Branson said, “our only hope to stop climate change is for industry to make money from it”.

However, avoiding brands like Oatly is not necessarily an effective way to create change at the level of power needed to stop the destruction of the Amazon or bring an end to the climate crisis. 

In fact, doing so would likely cause more harm to ethical brands that are genuinely trying to make a difference, and the mission of making sustainability mainstream, than it would to their billionaire investors. 

But if you’re not a billionaire, investor or CEO of a global corporation, it might feel like ‘conscious consumerism’, calling brands out on social media and participating in boycotts are your only options, no matter how ineffective they may be.

The good news is, there is something more effective that individual consumers can do to challenge power.

We may not approve of sustainable brands like Oatly taking investment from funds that damage the environment. 

We may not want to spend our money with these brands anymore, to avoid our hard earned money funding activity we don’t agree with. 

But even if we boycott these brands and make ‘conscious’ purchasing decisions wherever possible, we may still be unwittingly investing in environmental destruction – either because the parent companies and investors behind the brands we love are unclear (and we don’t have time to research them all), or because our personal finances are held in funds which support them.

Many companies, investors and even governments that are seemingly acting in favour of the climate by investing in green solutions, are simultaneously maximising their profits by funding the causes of the climate crisis too.

A third of FTSE 100 stocks have been found to be damaging to the environment – investing in fossil fuels, oil, gas, airlines and other businesses contributing to greenhouse gases. 

Oatly are clearly standing by their decision to take investment from Blackstone, despite not agreeing with all of their behaviour. 

CEOs like Blackstone’s Stephen Schwarzman are unlikely to be shamed into protecting the environment – but their investors can be. 

To create meaningful change, we need to bypass the brand and its owners, and take action further up the chain.

Like many firms, Blackstone gets a lot of its money from pension funds. 

Many people invest in their pension to protect their future, without realising that their choice of investment could be destroying the planet and putting that future at risk. 

Switching our personal finances and investments is one of the most effective ways we can influence change at a higher level, beyond our purchases.

And it doesn’t just affect your pension (if you have one). 

Your day to day finances could be causing environmental damage too.

Extraction projects like drilling for oil and fracking shale rock for gas aren’t just environmentally damaging, they’re also expensive. 

They can’t go ahead without outside investment, and in a recent report, 35 global banks have proven to be willing partners, having together invested £2 trillion in the fossil fuel industry’s continued growth since 2016. 

Without these funds, the climate destroying activities of corporations would not be possible.

The average consumer might not have the significant wealth available to invest in climate solutions and sustainable businesses, but they can have a powerful impact by choosing how to handle their personal finances carefully. 

If the growing Oatly scandal has shown us anything, it’s that where money comes from, and where it goes, matters.

Without large amounts of money and resources, we may feel powerless to create widespread change – just as sustainable brands struggle to break into the mainstream and maximise their impact.

In a broken system, there will always be a need to make compromises as we try to make improvements. But we are not powerless, and we can choose to invest in the type of future we want to see.

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1 Comment
  • Josie
    Posted at 07:30h, 08 September Reply

    Excellent article. Divestment is where consumers can throw their weight around. Until then, “progress not perfection” for sustainable brands trying to stay sustainable.

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