Green or greenwashing? A 95 million dollar sustainability paradox for Michelin and BNP Paribas

The Tropical Landscapes Finance Facility Sustainability Bond (TLFF I) was initially celebrated as a best-in-class example of sustainable finance. Issued in 2018, this $95 million financial instrument aimed to create a promising future: sustainable natural rubber plantations in Indonesia that balanced ecological preservation, local livelihoods and corporate profits. The ambitious venture sought to redefine the possibilities of transition finance and brought together several organizations: Michelin, ADM Capital and BNP Paribas, USAID, the World Wide Fund for Nature (WWF) and the World Agroforestry Centre (ICRAF). However, the promise of progress soon collided with the complexities of reality. The initiative faced mounting challenges, including allegations of greenwashing, community grievances and questions about compliance with emerging sustainability regulatory standards. In the end, TLFF I – the “climate-smart, wildlife-friendly, socially inclusive” sustainable finance facility used to finance Michelin’s Indonesian natural rubber plantation joint venture – found itself at the center of a growing controversy that threatened to unravel years of work in corporate sustainability efforts. The case examines the paradoxes in the TLFF I and challenges students to grapple with the complexities of legitimacy, innovation, accountability, sustainability transition and regulation-timing in blended finance mechanisms. While the TLFF I case focuses on natural rubber, the challenges encountered by the different players and the lessons learned are applicable to other industries undergoing brown-to-green transitions and implementing multistakeholder solutions. The case reflects the reality that many business challenges are not dilemmas to resolve but instead involve persistent tensions that demand integrative thinking. For students, engaging with paradoxes sharpens critical thinking, fosters metacognitive awareness and builds the capacity to lead amid contradiction.

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