SAO PAULO, Jan 15 (Reuters) - The world's largest meatpacker, JBS, became the first among its peers in 2021 to commit to reducing or offsetting all of its emissions by 2040, while also pledging to end illegal deforestation throughout its extensive supply chain originating from the heart of the Brazilian Amazon.
JBS utilized terms like "commitment" and "pledge," along with a slogan stating that "anything less is not an option," to outline its strategy during discussions with investors regarding a sustainable bond offering and in promotional materials, including those for its beef products.
Several years later, Jason Weller, the company's global chief sustainability officer, stated in a rare interview with Reuters that the emissions target was merely an "aspiration."
Weller clarified, "It was never a promise that JBS was going to make this happen," in reference to the net-zero emissions pledge.
Despite JBS' efforts to encourage voluntary changes, Weller acknowledged the company's inability to regulate farming practices. JBS had previously committed to halting illegal Amazon deforestation by its cattle suppliers by 2025.
In a subsequent statement to Reuters, JBS affirmed, "Our climate aspirations remain unchanged. Any claim to the contrary is entirely false."
Investigations by Reuters revealed that shareholders have made minimal progress in holding JBS accountable to its commitments over the past five years, with scarce environmental proposals, little opposition to the Batistas on various issues, and minimal inquiries about sustainability during financial calls.
JBS' profits have surged, propelling its Sao Paulo-listed stock to an all-time high recently.
Cattle ranchers in Brazil, responsible for 80% of current Amazon deforestation, are driving the rainforest closer to a tipping point where its capacity to sequester carbon dioxide will diminish.
The challenge of mitigating environmental harm associated with JBS and other agricultural firms could undermine President Luiz Inacio Lula da Silva as he readies to host global climate discussions in November.
As with oil majors, numerous global corporations have eased their environmental commitments.
"There are too few investors using their shareholder influence to address this issue," remarked Vemund Olsen, a senior analyst specializing in sustainable investments at Norway's Storebrand Asset Management.
JBS, among other entities, faced penalties from Brazil's environmental agency in October for engaging in cattle production on illegally deforested Amazon lands.
Environmental activists estimate that a significant portion of JBS' emissions arise from deforestation-related activities, biodiversity loss, and pollution.
While JBS tracks indirect emissions within its supply chain, it excludes emissions linked to land-use changes.
"We lack an approved methodology for calculating emissions from land-use changes that inspires confidence," noted Weller. The company's focus remains on emissions from its operations, such as slaughterhouses.
Despite JBS' limitations in enforcing change across its supply chain, Weller underscored their commitment to instigating real change through investments.
Morningstar Sustainalytics, an independent sustainability ratings agency, ranks JBS in the 95th percentile among firms analyzed, attributing a "severe-risk" label to its environmental performance.
Despite mounting evidence suggesting sustainability targets may be missed, JBS has faced little pressure to date, as noted in interviews with investors and reviews of company filings.
The company's top 20 investors declined discussions about the company.
Weller emphasized JBS' dedication to enhancing transparency and collaboration with investors concerning sustainability matters.
Given that the Batista family holds almost half of the company's shares, private investors' influence is somewhat limited. Brazil's development bank BNDES owns a further 21% and typically aligns with management decisions during votes.
Proxy advisor Glass Lewis recommended low scores for JBS in climate risk mitigation and board accountability, echoing concerns raised by proxy advisor ISS regarding management practices and governance issues.
During the widespread anti-corruption investigation known as "Operation Carwash," the Batista brothers were temporarily banned from managerial positions after admitting to bribing numerous officials over a decade. they were later reinstated following a shareholder vote last April.