In a recent development, a senior executive at JBS, the world’s largest meatpacker, has stated that the company’s emissions reduction goal is merely an “aspiration” and not a promise. This comes after JBS made headlines in 2021 for committing to cutting or offsetting all its emissions by 2040 and ending illegal deforestation across its extensive supply chain that begins in the Brazilian Amazon.
The commitment made by JBS in 2021 was seen as a significant step forward in the industry, with the company being the first of its peers to make such a pledge. Terms like “commitment” and “pledge” were used to describe the plan, emphasizing that anything less was not an option. However, nearly four years later, Jason Weller, JBS’s global chief sustainability officer, revealed in an interview with Reuters that the emissions goal was never a promise but rather an aspiration.
Weller explained that JBS cannot control how farms operate, despite encouraging voluntary changes. The company had also pledged to end illegal Amazon deforestation by its cattle suppliers by 2025. In response to the interview, JBS issued a statement reiterating that their climate ambitions remain unchanged and refuting claims that suggest otherwise.
Investors have been relatively passive in holding JBS accountable for its pledges, with few shareholder proposals related to the environment being put forward in the last five years. The company’s profits continue to rise due to strong meat demand, leading to a surge in its stock price. However, the environmental impact of cattle farming, particularly in the Amazon, poses significant challenges and could undermine global climate efforts.
Environmental activists have highlighted that a large percentage of JBS’ emissions are linked to deforestation, biodiversity loss, and pollution. These emissions are categorized as changes in land use, but JBS has disputed the calculations, stating that there is no approved format for calculating these emissions accurately.
As the industry grapples with sustainability issues, there is a growing call for investors to engage more actively with companies like JBS on environmental concerns. Improved regulation and enforcement of legislation in countries like Brazil are also seen as crucial in addressing the environmental challenges posed by agriculture companies.
In conclusion, the recent statements from JBS regarding its emissions reduction goal shed light on the complexities and challenges associated with sustainability in the meatpacking industry. While the company continues to emphasize its commitment to climate action, there is a need for greater transparency, accountability, and collaboration to address the environmental impact of its operations effectively. JBS, a global meat processing company, has chosen to focus on reducing emissions from its own operations, particularly in its slaughterhouses. While other companies, such as Mars, Archer Daniels Midland, and Bunge, have started disclosing emissions related to changes in land use, JBS acknowledges that it does not have the authority to mandate changes on farms or dictate how its customers utilize its products. Despite these limitations, JBS is taking proactive steps to drive real change within its supply chain through investments and initiatives.
Morningstar Sustainalytics, an independent sustainability ratings agency, has placed JBS in the 95th percentile among the companies it evaluates, giving it a “severe-risk” rating for its environmental performance. Despite mounting evidence that JBS may not meet its sustainability targets, the company has faced little pressure from its investors. Even as demands from European companies to halt deforestation have increased, the top 20 investors in JBS have declined to discuss the company, showing a lack of engagement on sustainability issues.
While JBS is committed to enhancing transparency and engaging with investors on sustainability, the influence of private investors is limited due to the significant ownership stake held by the Batista family, who control almost half of the company’s stock. Additionally, the Brazilian development bank BNDES owns 21% of JBS’s stock and has aligned with management in voting decisions. Proxy advisors have highlighted concerns about JBS’s climate risk mitigation strategies, board accountability, and governance practices, particularly in the context of corruption.
The Batista brothers, who were previously banned from holding management positions due to their involvement in a bribery scandal that implicated over 2,000 individuals, including government officials and politicians, have since rejoined JBS’s board following a shareholder vote. This move has raised questions about the company’s governance practices and commitment to ethical conduct.
Despite these challenges, JBS remains dedicated to driving sustainability initiatives and making positive changes within its supply chain. The company recognizes the importance of addressing environmental issues and is working towards improving its performance in this area. By engaging with stakeholders, enhancing transparency, and investing in sustainable practices, JBS aims to reduce its environmental impact and contribute to a more sustainable future for the industry.
