New York State Sues JBS SA Over Alleged Environmental Misleading
New York State Attorney General Letitia James has filed a lawsuit against JBS SA, the world’s largest meat-packer, accusing the company of misleading the public about its environmental impact. The lawsuit alleges that JBS has failed to provide a viable plan to achieve its widely-advertised commitment to reach net zero emissions by 2040. The attorney general’s office claims that the company has made misleading claims about its efforts to curb deforestation and reduce greenhouse gas emissions.
This lawsuit comes at a time when many companies across various industries have made net zero commitments in response to increasing pressure from investors, regulators, and environmental groups. However, a significant number of these companies have yet to present a clear pathway for decarbonization. The phenomenon of “climate-washing,” where businesses make false claims about their environmental efforts, has become more common, with many cases originating in the United States.
Proving that companies intentionally misled investors or customers can be challenging. Bloomberg Intelligence analyst Rob Du Boff explains, “We’ve seen a rise in suits targeting greenwashing, particularly as some companies have walked back prior commitments.”
The legal action taken by New York State is not the only challenge JBS is facing. The company has been met with fierce opposition from environmental groups and lawmakers regarding its plans for a listing in the US. JBS recently announced that the listing would likely be delayed until the second half of 2024. The meat packer intends to file a new registration statement with the US Securities and Exchange Commission after its earnings release on March 26.
JBS responded to the lawsuit by stating that it takes its commitment to a more sustainable future for agriculture seriously. The company disagrees with the action taken by the New York Attorney General’s office and emphasizes its dedication to partnering with farmers, ranchers, and food system partners worldwide to feed a growing population while reducing agriculture’s environmental impact.
The food industry’s climate footprint is substantial, accounting for approximately one-third of global greenhouse gas emissions. Livestock, which releases potent methane, contributes to 14.5% of worldwide emissions. The Science-Based Targets initiative, a United Nations-backed agency, recommends that the food and agriculture sector reduce emissions by 3% annually between 2020 and 2030.
In a 2023 study conducted by Carbon Market Watch and the New Climate Institute, JBS received one of the lowest integrity scores among 24 major global companies that have pledged to achieve carbon neutrality and position themselves as climate leaders. The company has also faced criticism for purchasing thousands of cattle directly from illegally deforested farms in the Amazon.
Last month, a group of UK lawmakers announced plans to urge the SEC to block JBS’s listing on the New York Stock Exchange, citing the company’s inadequate efforts to combat climate change.
JBS has been pursuing a US listing for over a decade as part of its expansion strategy. With operations spanning from Colorado to New Zealand, the company is the largest producer of beef and chicken, the second-largest supplier of pork, and the leading ready-meals company in the UK. In 2022, JBS’s US-based operations generated nearly half of its revenue.
A New York listing is crucial for JBS’s plans to use equity to fund further expansion into the branded and processed-food business, which typically yields higher profit margins compared to its beef, pork, and chicken processing operations.
The lawsuit filed by New York State against JBS SA highlights the increasing scrutiny faced by companies regarding their environmental claims. As businesses face mounting pressure to address climate change, it is essential for them to provide transparent and actionable plans to achieve their sustainability goals.