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JBS under fire over deforestation claims

Investors have been urged to be cautious about investing in global meat giant JBS due to it having ‘no action plan’ to deal with indirect suppliers and deforestation.

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JBS under fire over deforestation claims

This was despite soaring profits for the company.

 

HSBC analysts, writing in a recent financial report on JBS and obtained by the Bureau of Investigative Journalism, said they had asked the company about its plan to address deforestation but appeared to be unsatisfied, concluding ‘the pressure is on JBS’.

 

It follows an investigation by the bureau, Reporter Brasil and The Guardian suggesting a link between the beef giant and a farm under sanction for illegal deforestation.

 

The journalists said they had uncovered photographs taken by a JBS truck driver last summer which appeared to show him transporting cattle from a farm with land under embargo after a deforestation fine, to a ‘clean’ farm which then sold cattle on to JBS.

 

JBS has disputed the allegations.


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Greenpeace has led a campaign calling on Tesco to stop buying meat from Moy Park and Tulip, which are both part of JBS’ global business, calling on the retailer to ‘lead the way’ as the UK’s largest supermarket.

 

Despite its concerns, HSBC does still recommend buying JBS stock, pointing to its ‘debt reduction story’, diverse portfolio and leadership in the industry as well as its scale.

 

JBS reported a net profit of BRL$ 3.38 billion (£476 million) in the second quarter of 2020, up 54.8 per cent year on year.

 

The firm slaughters about 35,000 cattle every day from Brazil alone.

 

Ian Hill, former chief executive of Agropecuaria Jacarezinho, a 46,000-hectare (114,000-acre) beef enterprise running 10,000 breeding cows in the north east state of Bahia, said there may be indirect suppliers further down the chain utilising land they should not. These cattle could eventually end up with JBS.

 

He added Brazil ‘had a lot of problems’ but there were also ‘some really good things’ going on in agriculture.

 

“They have deforested areas, but 87 per cent of the Amazon is intact,” he said.

 

He highlighted restrictions on land use requiring farmers to preserve a percentage of their land, ranging from 20 per cent up to 80 per cent in important areas, and a drive for integrated crop, livestock and forest systems.

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