The private equity firm is part owned by Stephen Schwarzman, who is reportedly a donor for Trump, and has been accused of financial links to companies accused of deforestation in the Amazon.
So should we be boycotting Oatly?
The accusations against Blackstone
In August, Bloomberg published a report which found that Schwarzman - Blackstone’s co-founder and CEO - had donated $3.7 million dollars towards Trump’s 2020 re-election campaign.
The sum was donated via Super Pac America First Nation, an organization that pools campaign contributions from members and donates them to campaigns for or against candidates.
The report found that Schwarzman was propping up Wall Street giving for Trump’s campaign: the donation single-handedly accounted for three quarters of reported contributions over a 18 month period from individuals associated with the key 31 banks and investment firms dominating America’s finance industry.
Without it, Wall Street giving from those linked to the 31 firms would have declined by 69% from the 2016 cycle.
Blackstone has also been linked to companies accused of facilitating Amazon deforestation.
Blackstone owns a stake in Hidrovias do Brasil. This company operates a shipping terminal at Miritituba in the Brazilian state of Pará.
According to a report in The Intercept in 2019, the terminal has facilitated widespread deforestation of local areas.
“The jungle is being cut by grileiros, or “land-grabbers,” who operate outside the law with chainsaws. The grileiros then sell the newly cleared land to agribusiness concerns, whose harvest is driven on the highway to the [Hidrovias-operated] terminal, before being exported.”
Indeed, The International Finance Corporation - an affiliate of the World Bank that backed the Miritituba terminal project - has also stated that “the construction of the Miritituba port, close to still-intact areas of the Amazon forest, is likely to lower transport costs for farmers and thereby accelerate conversion of natural habitats into agricultural areas, particularly for soy production.”
Blackstone has strongly refuted accusations that Hidrovias has also been involved in the development of a road leading to the terminal in Brazil which has been critical for the transportation of deforestation goods and is linked to violations of Indigenous land rights.
In particular, the company emphasises that the road has been operated by the Brazilian government since 1976. It says that Blackstone, “did not build this highway, nor are they paving it.”
Nonetheless, critics claim that:
“Hidrovias has consulted with and helped finance the Brazilian government’s efforts to develop and find funding mechanisms to pave [the highway], maintain the road, and reduce congestion to accelerate its shipments.”
What does the investment mean for Oatly?
Given the racial violence that Trump has incited in the US and the role of deforestation in climate breakdown, it is not surprising that Blackstone’s investment in Oatly has caused concern.
Many have questioned why the manufacturer of plant-based milks has accepted the funding, accusing it of “selling its soul”.
The investment represents a 10% stake in the company. However, it does not necessarily mean a shift away from ethics for Oatly itself.
Crucially, as a private equity firm, Blackstone is a passive investor. Unlike shareholders in a publicly traded company, Blackstone therefore does not have any control over the running of the company.
Oatly themselves say, "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 of the world would look, listen and start to steer their collective worth of 4 trillion US dollars into green investments." However, companies have long suggested the value of taking investments from unethical sources as a way to 'mainstream' sustainability, and it has not transformed private equity yet.