Under pressure from investors, JBS tries to unlink itself from deforestation

The record increase in fires and deforestation rates is reducing Brazil’s attractiveness for foreign investors. According to the newspaper O Globo, in the first eight months of 2020, more than US$15 billion in capitals left the country, the highest volume since 1982. Analysts and managers believe that the environmental crisis may worsen this situation. In an audience at the Supreme Federal Court (STF) on climate change on the 22nd, the former president of the Central Bank, Armínio Fraga, spoke about the worsening of Brazil’s image abroad: “Deforestation and other environmental crimes, in addition to aggravating the global problem, bring enormous risk to the agribusiness ecosystem, our most successful sector, and also to the energy supply in our country “.

Sensing the pressure, on the 23rd, JBS, the largest animal protein producer in the world, launched a plan to “increase the siege on the beef supply chain (…) to ensure that the meat that reaches the consumer does not contribute to the overthrow of the Amazon: the suppliers of their suppliers“. The so-called “Green Platform JBS” intends to use blockchain technology to process data from all farms, whether owned by direct or indirect suppliers to verify compliance with social-environmental legislation. JBS (owner of the Friboi and Seara brands) also announced the creation of a fund with an initial value of R$ 250 million to finance conservation and economic development actions in the region.

JBS ‘“Green Platform” plans to have full control of direct and indirect cattle suppliers by 2025. Environmentalists recognized the importance of the plan but criticized the five-year deadline to clean up the production chain and questioned the company’s ability to carry out such measures without support from the government.

Nordic investment funds Nordea Asset and KLP, which have already banned JBS from their portfolios, also consider that the proposal presented by the company has a term “too long to be satisfactory”. With R$ 3.4 trillion of assets in its portfolio, the Finnish Nordea Asset banned JBS from its portfolio in July, after a joint press investigation revealed that the slaughterhouse bought cattle raised in an area of ​​deforestation in the Amazon.

An investigation by the NGO Repórter Brasil, disclosed on the eve of the announcement by the agribusiness giant, reaffirmed the problems in the JBS production chain. Part of the fire that devastated Mato Grosso’s Pantanal originated from ranchers’ farms that sell cattle to the Amaggi and Bom Futuro groups, which supply not only to JBS but also to other multinationals like Marfrig and Minerva. The survey was based on a study by the NGO Instituto Centro e Vida, which identified the origin of the fires in five properties in Mato Grosso, analyzing fire hotspots between July 1 and August 17, 2020.