Eighteen investors managing $22 billion have co-signed a letter asking the US financial regulator to stop Brazilian meat giant JBS from listing in the US following concerns around transparency, human rights, and deforestation.
Signed by Green Century Capital Management, Trillium Asset Management, and As You Sow, the letter urged the Securities Exchange Commission (SEC) to protect investors from JBS’s lack of transparency around “misleading reporting” of Scope 3 emissions.
“JBS continues to mislead investors with inaccurate disclosures regarding its climate-related targets and impacts,” said the letter seen by Carbon Pulse and published on Thursday.
“Should JBS gain access to the US stock market, such deficiencies may impair US investors’ ability to make decisions about material risks the company faces.”
JBS has been trying to list its shares on the US stock exchange for the last decade to open up the potential for more investment, but has faced repeated delays, in part due to environmental concerns.
“Another failed attempt to initial public offering (IPO) in the US would reinforce concerns about JBS’s governance, integrity, and environmental impact, potentially discouraging future investors,” Alexandria Reid, head of forests at NGO Global Witness, told Carbon Pulse.
JBS removed ‘zero tolerance’ for invading protected areas from its recent SEC application, according to an investor briefing led by Global Witness and supported by advocacy group Mighty Earth.
The omission raises concerns as JBS has been recently linked to Indigenous land invasions and deforestation in Brazil, according to the activist organisations.
The billionaire Batista family would hold almost 85% of voting rights if it listed in the US, up from 49% in June, limiting investor influence on environmental decisions, they said. The concentration of power raises governance concerns, while the deal structure weakens protections typically available to investors.
“While technically legal, such extreme supermajority voting rights would amount to an unprecedented governance issue,” Annie Sanders, director of shareholder advocacy at Green Century Capital Management, told Carbon Pulse.
“This move would severely limit investors’ ability to uphold their fiduciary duty as well as influence the company on pressing global risks such as climate change and nature loss,” said Sanders.
“A BAD SIGNAL”
JBS has sidestepped its ‘Net Zero by 2040’ target, now calling it ‘Climate reduction goals by 2040’, following litigation in New York for misleading consumers, the activist organisations said.
Furthermore, the Science-Based Targets initiative has delisted JBS for not submitting a sufficient climate plan.
“An SEC rejection of JBS’ registration is certainly possible given the company’s misleading environmental disclosures and history of bribery, deception, and corruption,” said Sanders.
“We believe the SEC must scrutinise this plan closely to protect both US investors and the environment, not least because it sends a bad signal to the market that a company operating in a high-risk sector can dilute its human rights protections so far into the IPO process,” said Reid.
Carbon Pulse has requested comment from JBS.
The investors are:
- Green Century Capital Management
- Sisters of St. Francis of Philadelphia
- Newground Social Investment
- Figure 8 Investment Strategies
- Trillium Asset Management
- Future Group
- Maryknoll Sisters
- Ethos Foundation
- As You Sow
- SharePower Responsible Investing
- Natural Investments
- Transformative Wealth Management
- Impact Investors
- Farm Girl Capital
- NorthFork Financial
- Greenvest
- Adasina Social Capital
- Horizons Sustainable Financial Services
Investor interest in nature ramped up in this year’s voting season, boosted by some of the first calls for standard-aligned biodiversity disclosures, with financiers hailing a surge in awareness despite rising corporate resistance.
By Thomas Cox – t.cox@carbon-pulse.com
*** Click here to sign up to our twice-weekly biodiversity newsletter ***
