Environmental activists pressure US regulators to halt JBS listing

JBS hopes the US listing will attract broader investor
calendar icon 24 August 2023
clock icon 3 minute read

A coalition of environmental groups is pushing US securities regulators to thwart JBS SA's New York share listing over concerns about the world's largest meatpacker's impact on deforestation, climate change and other issues, reported Reuters.

The Brazilian company hopes a US listing will attract a broader investor base to give it more access to cheaper capital.

However, groups including Rainforest Action Network, Mighty Earth and World Animal Protection this month sent letters to the Securities and Exchange Commission urging it to oppose the US initial public offering or investigate claims in JBS's prospectus.

"This is probably the single most important IPO for the climate in history," said Glenn Hurowitz, chief executive of Mighty Earth.

The destruction of rainforests, which serve as carbon sinks, imperils global climate targets.

JBS said its listing proposal will "enhance corporate governance and transparency through adherence to SEC standards." It also said it looks forward to engaging with non-governmental organizations.

Activists have long accused JBS of exploiting the environment and workers. Cattle ranching, along with clearing land to sell timber or grow crops, is driving deforestation in the Amazon rainforest. The beef industry says most deforestation is done by criminals.

World Animal Protection told the SEC that JBS, which buys grain for livestock feed, did not adequately identify crop farming as a material risk factor for deforestation in its prospectus.

In a response, the SEC said World Animal Protection's concerns "will be given careful consideration in view of the Commission's overall enforcement responsibilities under the US federal securities laws," according to the group.

The SEC declined to comment to Reuters.

Last year, an audit by Brazilian prosecutors found nearly 17% of the cattle bought by JBS in Para state in the Amazon rainforest from July 2019 to June 2020 allegedly came from ranches with "irregularities" like illegal deforestation. JBS said at the time that issues that led to the purchases had been fixed.

"In the prospectus there is no clear road map to really make sure JBS is not involved in deforestation," said Merel van der Mark, a Rainforest Action Network coordinator.

JBS said it is using blockchain technology to monitor suppliers'suppliers. As of January 2026, only producers registered in its blockchain tool will be able to continue doing business with JBS, it said.

The company expects to conclude its US listing by the end of the year.

Once the SEC confirms the planned offering complies with US securities regulations and has no additional comments, the company can submit the deal for shareholders' approval.

The US listing has been in the works for nearly a decade, but was postponed in part due to a 2017 corporate corruption scandal in Brazil and then again amid the COVID-19 pandemic.

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