Oatly Settles Greenwashing Lawsuit for $9.25M Over Alleged Environmental Claims
Source: The DairyNews
Swedish oat drink company Oatly has reached a $9.25 million settlement in response to allegations of greenwashing. The lawsuit, initiated by investor Kai Jochims in July 2021, accused Oatly of artificially inflating its share prices through overstated product demand and environmental credentials. The settlement, awaiting final court approval, follows a mediation session held in October.
The legal action emerged shortly after Oatly's successful $1.4 billion initial public offering (IPO), during which accusations of misleading environmental claims led to a 9% drop in the company's US share prices. The consolidated lawsuit focused on claims of financial misrepresentation and exaggerated environmental sustainability assertions, particularly related to Oatly's market growth in China and its overall eco-friendly image.
The settlement agreement follows the dismissal of two previous claims against Oatly and is the result of the third revision of the lawsuit. While the legal process is still pending approval by the court, Oatly refrains fr om commenting on the settlement.
Despite legal scrutiny, Oatly has reported positive financial performance, with a year-over-year revenue increase of 8.5% to $783.4 million for 2023. The company has strategically shifted its focus away from in-house manufacturing, aiming for long-term profitability.
In addition to its business strategy, Oatly has actively pursued environmental initiatives. The company launched the F.A.R.M (Farming, Action, Regeneration, Movement) movement, collaborating with farmers globally to reduce greenhouse gas emissions and enhance agricultural practices, with a goal of reducing its climate footprint by 70% per liter of oat drink.
This settlement reflects a broader trend in the plant-based industry, wh ere legal battles have arisen amid the sector's growth, with traditional dairy and meat industries leveraging litigation to protect their market share. Oatly remains a prominent player in the plant-based industry, continuously introducing new products and securing partnerships despite regulatory scrutiny and legal challenges.
The settlement agreement follows the dismissal of two previous claims against Oatly and is the result of the third revision of the lawsuit. While the legal process is still pending approval by the court, Oatly refrains fr om commenting on the settlement.
Despite legal scrutiny, Oatly has reported positive financial performance, with a year-over-year revenue increase of 8.5% to $783.4 million for 2023. The company has strategically shifted its focus away from in-house manufacturing, aiming for long-term profitability.
In addition to its business strategy, Oatly has actively pursued environmental initiatives. The company launched the F.A.R.M (Farming, Action, Regeneration, Movement) movement, collaborating with farmers globally to reduce greenhouse gas emissions and enhance agricultural practices, with a goal of reducing its climate footprint by 70% per liter of oat drink.
This settlement reflects a broader trend in the plant-based industry, wh ere legal battles have arisen amid the sector's growth, with traditional dairy and meat industries leveraging litigation to protect their market share. Oatly remains a prominent player in the plant-based industry, continuously introducing new products and securing partnerships despite regulatory scrutiny and legal challenges.
