Sustainable Investments

Today, I have decided to speak about something that has grabbed my attention as of late. As someone that tries my best to be environmentally friendly and keep abreast of things that can help the planet, I have noticed a real increase in pressure on investors, and companies looking for investment alike, to be ethical in their business decisions and seen to be supporting the 'right' cause.

The story that brought this issue to the forefront of my attention was, of course, when the scandal occurred that the brand Oatly had agreed a new $200 million investment from Blackstone and other high-profile investors. There was incredible controversy and boycotting going on in the subsequent days and weeks, as well as social media being rife with opinions on the matter. So, let me give you a quick rundown of each company to give some context:

Oatly - an oat alternative to dairy products, with their most popular item being a milk alternative. They pride themselves on being one of the most ethical and sustainable brands, whilst also trying to change the way people view plant-based alternatives.

Blackstone - an American private equity investment firm that has been claimed to have some suspicious investments on its portfolio, the most topical being Hidrovias, who have been (some say falsely) accused of actively tearing down the rainforest (the main controversial investment under scrutiny in this debate).

Initially, I saw where people were coming from. Oatly is a company that prides itself on moving toward a more sustainable future and the protection of the environment, but here they were taking money from Blackstone, a firm that has a question mark over their ethics. Surely these business models contradict one another? The deal was agreed back in July, yet I still see people on social media publicising why Oatly should continue to be boycotted. People have been accusing Oatly of "selling their soul" and that they are "in it for the money". Rightly so, no? Well, after I took a step back from the raging social media and really thought about Oatly's intentions with this deal, I saw a completely different side to their decisions and, quite frankly, I support it.

I now see that it could actually be one of the most intelligent, well thought out decisions. What a better way to show people that your plant-based alternatives are worth investing in than having one of the biggest investment firms give you funding and support your ambitions... it is a stroke of genius now that I think of it. After all, the way to make change is to change the minds of the people around you, and this is exactly what Oatly are doing with this investment. They are demonstrating where the future could lie for investors and paving the way for the journey ahead.

Let me now take a quick look at the bigger picture of sustainable investments as a whole. With the rapid increase in how easy it is for us to find out anything we want on the internet, companies can't get away with the behaviour they potentially used to. Every business transaction is under the watchful eye of the general population and that shouldn't be underestimated. The public have a louder voice than they ever have and businesses need to bare this in mind when making strategic decisions. In addition to this, the climate crisis and urgency to shift to a greener planet is at the forefront of most Governments discussions. It goes further than simply implementing more sustainable ways of doing things. It begins at the source. Investments. This is how companies are able to role out ideas, implement initiatives to a wider audience and really make an impact. Hence, it is growing in importance for the investors to have a sustainable portfolio.

It is predicted that COVID-19 has increased the push to sustainable finance but there is no denying it was already well under way, with the UK's Green Finance Strategy launching last summer (2019) being a solid example of such. Boris Johnson recently announced his climate targets have moved forward, making clear that sustainability really is being taken seriously. Investors would be wise to follow suit and continue in their ambitions to invest in sustainable and ethical businesses.

It is clear that I personally agree that investors should aim for a portfolio filled with sustainable businesses. However, I am not naive to the fact that there are still many non-sustainable companies out there that require investment, and also that sustainable companies make up a very small portion of the full picture. It is evident of the times that sustainable finance is most definitely on the increase and we should expect to see much more of these hot topics rising to the surface.

Until next time...