in the carbon footprint of per-liter ingredients, 2019 - 2020



in revenue since 2018


Fewer Carbon Emissions

Producing 1 liter of Oatly milk emits 80% fewer carbon emissions, uses 60% less energy and 79% less land than milk from cows

The Path to Drawdown: Plant-based Diet

The meat-centric Western diet is responsible for one-fifth of global emissions. Land clearing, fertilizer use, and methane from burping cattle combined take an enormous toll on the environment and the climate. 

Shifting to a diet rich in plants is a demand-side solution that reduces emissions and tends to be healthier. If the world adopted a vegan diet, business-as-usual emissions could be reduced by as much as 70%, and a vegetarian diet could reduce emissions by 63%. On top of this, adopting a plant-based diet could help save $1 trillion in annual health-care costs and lost productivity.

Meat-, fish-, and dairy-based dietary preferences are deeply ingrained in Western cultures, as well as in lower-income countries as they develop. Bringing about dietary change requires plant-based options that are widely available, visible, and enticing, including high-quality meat substitutes. 

Project Drawdown estimates that, if 75% of the global population adopts a plant-rich diet by 2050, this dietary change can reduce GHG emissions by up to 91.72 gigatons: 68.32 gigatons from diverted agricultural production, 23.16 gigatons from avoided land conversion, and 0.24 gigatons from sequestration from ecosystem protection.


Oatley Group AB (stock ticker: OTLY) produces alternatives to dairy products from oats. Headquartered in Malmö, Sweden, their key markets are in Sweden, Germany, UK, US, and China. Oatly went public on May 20, 2021.

OTLY’s Role in Drawdown

Oatly uses oats to manufacture dairy alternatives like milk, frozen desserts, and yogurt. Producing (p. 6) one liter of foods and beverages using oat milk emits 80% fewer carbon emissions, requires 79% less land and uses 60% less energy than producing the same amount of milk-based products.

As of 2020, they produced 299 million liters-equivalent (p. 7) of oat-based products, replacing milk-based dairy products. Their revenue has been growing by 86% year-on-year (p. 9) since 2018 and around 60,000 retail locations carry their products as of June 2021.

OTLY: What We Like

We’re excited about the sustainable nature of Otaly’s products and we’re encouraged by their rapid expansion (p. 7) in recent years. They’re projecting continued expansion of their production facilities and markets in the near-term future.

  • Founded in Sweden in the 1990s, Oatly entered the US market in 2017, and quickly expanded into the Chinese, German, Dutch and British markets a year later
  • In 2020, Oatley began partnering with major companies like Starbucks
  • Planning to add nine production facilities by 2023, which is expanded to expand production capacity from 299 million liters in 2020 to ~1,400 million liters in 2023 (p. 20)

Regarding sustainability reporting, we commend Oatly for putting together such a detailed sustainability report with breakdowns of their GHG emissions and their sources. Plus they’ve taken steps (p. 11) to reduce their carbon footprint, like:

  • Reducing the number of terminal trucks, reducing diesel consumption by 6,000 liters per year
  • Digitizing and deploying a fleet of electric trucks in Sweden, saving 400 metric tons per year of CO2e
  • Starting to implement a warehouse network around the world which is designed to minimize the distance to production sites and customers
  • Reducing overall energy consumption by 16% between 2019-2020
  • Reduced water usage at all of their production sites by up to 69% in 2020
  • By 2029, they aim to reduce their emissions by 70% compared to the 2019 baseline

OTLY: What We Want to See Improve

Reduce GHG Emissions

It’s very clear from their sustainability report that Oatly is poised to be a leader among sustainability-oriented companies. Their disclosure of their climate and environmental metrics also signals that they pay close attention to their carbon footprint and environmental impact. Yet, as they also lament (p. 8), Oatly’s emissions have gone up significantly in the last two years (111% increase) as they’ve grown their production and distribution. We agree with Oatly that it’s critical for them to reduce their absolute emissions as soon as possible even while they open new production facilities, and urge them to do so as soon as possible.

Increase Renewable Energy

While their overall energy consumption went down, Oatly admits (p. 12) that the climate impact of their energy use went up by 35%. This was because their share of renewable energy use declined as they expanded into regions without easy access to these sources of energy. We would like Oatly to re-up the proportion of renewables in their energy use until ultimately they operate on 100% renewable energy.

Adhere to Climate Disclosure Standards

We commend Oatly for their detailed climate disclosure in their sustainability metrics. But to make it easier for investors to compare Oatly’s disclosures with those of other companies, we want to see them adhere to widely-used reporting standards like the SASB and TCFD. These standards encourage a methodologically rigorous breakdown of total emissions by scope, which would allow stakeholders to more transparently evaluate Oatly’s carbon footprint and to hold them accountable to their commitments.

Other Plant-based diet Stocks in the Climate Index

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