Oat milk fans furiously threaten to boycott leading brand as ties to Trump-supporting investment firm come to light

People are threatening to boycott oat milk brand Oatly because of a controversial investment.

In July, Oatly sold a $200m stake to a group led by Blackstone, a private investment firm owned by a major Republican Party donor with ties to two companies accused of contributing to deforestation in the Amazon rainforest.

But Blackstone maintains that these accusations are false and that their companies are committed to environmental sustainability.

The contention, much of which focuses on a single highway – the BR-163 – that bisects Brazil through the Amazon rainforest, is more complex than it might initially appear. So is the boycott warranted?

Why are people boycotting Oatly?

Although Oatly's Blackstone ties were announced in mid-July, it has only recently caught people's attention on social media.

This is in part due to a Twitter thread written by climate activist Laura Young who accused Hidrovas do Brazil and Pátria Investimento, both companies with financial ties to Blackstone, of "directly contributing to the destruction of the Amazon rainforest".

Addressing Oatly, she concluded "I want to keep buying your product, but for now, I'm on pause".

Oatly responded with a lengthy thread in which it defended their investment in Blackstone. Part of the thread reads:

This investment has now given the world’s leading player in private equity the opportunity to steer their capital towards sustainability so they can make a positive contribution.

We understand our owners can have other investments that don’t fit with what we stand for, however they believe in us and our mission - and if we just shut out the companies that may make less sustainable choices, we won’t give them the chance to improve and make more sustainable choices, so global capital will keep being steered in a less sustainable direction.

Through the success of this investment, we want other businesses to see that it pays off to invest in sustainability, so more capital is steered in this direction in the future. Our goal to further the transition to plant-based for the sake of the planet has not changed.

But some Oatly customers weren't convinced, and pledged to boycott the company anyway.

The issue is particularly contentious because Oatly prides itself in contributing to sustainability.

The first line of the company description on its website reads:

Our sole purpose as a company is to make it easy for people to turn what they eat and drink into personal moments of healthy joy without recklessly taxing the planet’s resources in the process.

Oatly also promises to "be a good company" and to look after the "general well being of the planet" in its company literature.

In a response to a request for comment, Oatly spokesperson Linda Nordgren said:

Some have questioned why we chose to receive investment from company like Blackstone. But it has always been in our DNA to challenge the status quo and do what we believe is right to change the world to the better, rather than what is easy or comfortable. 

Currently, only a tiny fraction of the world’s private equity capital is currently invested in sustainable companies. That needs to change. Being one of the world’s largest private equity firms, Blackstone’s commitment to supporting us and being part of our mission going forward is sure to create a ripple effect through the international finance community for more green and sustainable investments.

We have a clear mission, to drive the shift to a more plant-based food system and a more sustainable world. This investment enables us to do just that. And at the same time, we want to show the global financial community that a green investment is a great investment, not only for the planet.

Not everyone will agree on our approach. That’s OK. But hopefully we’ll continue to share the same end goal of a better, more sustainable world, and that we work towards that together in whatever way we can. Like shifting to a plant-based diet for instance.

Are Blackstone companies really contributing to deforestation?

Much of the backlash Oatly faces for investing in Blackstone centres on two companies the firm co-owns: Hidrovas do Brazil and Pátria Investimento.

A report written by Ryan Grim in The Intercept suggests that both companies are "significantly responsible for the ongoing destruction of the Amazon" because they have helped to transform the rainforest into agricultural land.

He writes that these companies helped to build BR-163, a road which facilitates the export of grains and soybeans to a Hidrovas-run shipping terminal.

As he explains in the report:

Developing the roadway itself causes deforestation, but, more importantly, it helps make possible the broader transformation of the Amazon from jungle to farmland.

Grim goes onto claim that the Jair Bolsonaro's government announced in spring 2019 that "Hidrovias would partner in the privatisation and development of hundreds of miles of the BR-163".

But Blackstone Group denies the allegations against their companies.

In a statement published shortly after The Intercept's report, it said:

In late August, Blackstone and a Brazilian company we’re invested in, Hidrovias, were falsely accused of being responsible for the deforestation of the Amazon through the development of an industrial road. The erroneous claims and mischaracterisations were blatantly wrong and irresponsible.

Hidrovias does not own, control or have any interest — direct or indirect — in the road in question (BR-163).  This road has been operated by the Brazilian government since 1976. The company did not build this highway, nor are they paving it. [...] 

Hidrovias has been recognised for operating to the highest environmental and sustainability standards and they have won a number of national and international awards and certifications.

A Reuters report confirms that Bolsonaro has indeed signalled his intention to further pave and privatise the BR-163, but neither Hidrovias nor Pátria Investimento are specifically mentioned.

This apparent contradiction has been raised before.

During her presidential campaign, Elizabeth Warren wrote to Blackstone's CEO, Stephen Schwarzman, to express her concerns about the company's investments.

According to Politico, she wrote:

Given the immense global climate ramifications of deforestation in the Amazon rainforest, it is deeply troubling that U.S.-based private equity firms like Blackstone have taken advantage of the weakening of Brazil’s environmental safeguards through your investments in the logistics and resource extraction industries to boost short-term profits, at the expense of our global climate and Indigenous communities.

Again, Blackstone strongly denied these allegations and the Democrats who signed the letter conceded that the road remains publicly owned.

It maintained, however, that:

Hidrovias has consulted with and helped finance the Brazilian government’s efforts to develop and find funding mechanisms to pave BR-163, maintain the road, and reduce congestion to accelerate its shipments.

She also called for "greater transparency in private equity firms' practices".

The Blackstone Group has been contacted for further comment.

Does Blackstone have ties to Trump?

Some people threatened to boycott Oatly because of Blackstone's alleged connection to Donald Trump.

Although Blackstone and Trump are not directly affiliated, the company's co-founder, chairman and CEO Stephen Schwarzman is a major Republican party donor and has offered outside counsel to the president in the past.

In 2016, he briefly served as chairman of Trump's strategic and policy forum, a team of corporate executives assembled to advise Trump on job creation and the economy.

Schwarzman, who has a net worth of around $17.2bn, has donated $10m to the Senate Leadership Fund, a super-PAC tied to senate majority leader Mitch McConnell.

He has also fundraised for or donated to the political endeavours of George Bush, Marco Rubio, Mitt Romney, Susan Collins and Trump himself.

However, other Blackstone executives have also donated to Biden's campaign and Democratic groups. Blackstone president and COO Jon Gray and executive vice chairman Tony James have held virtual fundraisers, and Gray has also personally donated to the campaign.

Speaking to indy100, a Blackstone spokesperson added that "Steve Schwarzman himself has helped presidents of both parties on various initiatives over the years".

Ultimately, whether or not the Oatly boycott is warranted is a matter of perspective.

Oatly maintains that by investing in firms representing companies that "make less sustainable choices", it can help steer the market towards their own planet-friendly ethos.

Blackstone, on the other hand, strongly denies that its companies do contribute to rainforest destruction. Whether or not the political affiliations and donations of their CEO are relevant to their business is, similarly, a matter of personal opinion.

And if we hear of any updates on the contention surrounding the BR-163 – we'll keep you updated.