An activist group called Mighty Earth is challenging the Brazilian food company JBS over whether its “green” bonds truly align with environmentally-friendly practices.

In 2021, JBS, the largest meat company and food-processing firm in the world, sold $3.2 billion worth of “green bonds” that are linked to the company’s sustainability goals. If JBS fails to reach its targets for reducing greenhouse gas emissions, it will be penalized and bondholders will receive a “step up amount or premium payment” according to the company.

Mighty Earth has filed a complaint with the Securities and Exchange Commission, claiming that JBS is already falling short of its emissions targets and is contributing to or ignoring deforestation caused by its suppliers. They are requesting that the agency imposes penalties and injunctions on the company.

JBS disputes the allegations, stating that $7 billion will be invested in sustainability, including the adoption of solar energy for all of its Swift & Company stores and a partnership with DSM to reduce methane emissions from cattle herds.

Additionally, the company plans to spend over $1 billion in the next decade to reduce its greenhouse gas emissions intensity by 30%. JBS also stated that it hopes to reduce its Scope 3 emissions, which are impacts caused by suppliers and other entities it doesn’t directly control.

JBS has stated in a filing that while they acknowledge the importance of measuring and reducing scope 3 emissions, a widely-accepted method for measuring scope 3 emissions does not currently exist in their industry.

The complaint by Mighty Earth comes as the Securities and Exchange Commission (SEC) is expected to unveil new rules on climate-related disclosures by April. Environmental organizations hope these rules will increase transparency and require companies to issue regular reports on climate-related risks and their impact on the environment.

The SEC has already taken some actions in this area, last November, the SEC charged Goldman Sachs Asset Management of misrepresenting two of its mutual funds and a separately managed account, which had environmental, social and governance investments. To settle the charges, GSAM agreed to pay a $4 million penalty.

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