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Open letter signed by Global Witness and Greenpeace Brasil cautions potential investors on risk of deforestation in supply chains of JBS and Marfrig

Cattle are seen near burnt trees in Jamanxim National Forest, in the Amazon near Novo Progresso, Para state, Brazil 10 September 2019.

A recent investigation showed Amazon fires were three times more common in beef farming zones.
Photograph: Amanda Perobelli/Reuters

An international group of 30 non-profit groups published an open letter on Wednesday warning investors considering buying shares in two Brazilian meat giants of their exposure to deforestation.

Billions of dollars of shares held by the Brazilian Development Bank (BNDES) in JBS and Marfrig – two of the world’s biggest meat companies – will reportedly go on sale next year. The letter says that both companies have been linked to destruction of the Amazon forest – where deforestation soared this year while fires reached a nine-year record. BNDES declined to comment.

Signed by Global Witness, Greenpeace Brasil and the Rainforest Action Network, amongst others, the letter follows a report on Tuesday by the Guardian, the Bureau of Investigative Journalism and Réporter Brasil which showed that over the summer Amazon fires were three times more common in beef farming zones.

More than 70% of cleared Amazon rainforest is estimated to have been converted to pasture, the letter said. Brazilian companies JBS and Mafrig are two of the biggest buyers of cattle in the area.

“There is increasing recognition by central banks, stock exchanges, consumers and the public that climate change has become a material issue for the financial system,” the letter said. “This serves as a caution.”

“There are some real gaps in the information that JBS and Marfrig are supplying on their supply chain,” said Shona Hawkes, senior policy advisor, forests at Global Witness. “Investors need to insist on that information.”

Some cattle are born, raised and reared on the same farm – these are called direct suppliers, or “full cycle” farms. But many pass through numerous ranches – or “indirect suppliers” – before slaughter, with some specialising on fattening, others on rearing. This is proving to be a serious weakness for deforestation monitoring by the big Brazilian meat companies. JBS and Marfrig signed deals with Greenpeace and Brazilian prosecutors in 2009 promising not to source cattle from deforested areas. But they have been unable to guarantee this, the letter said.

In an email, Mafrig’s director of sustainability Paulo Pianez said the company’s efforts to meet its zero deforestation commitment include a real-time fire alert and a supplier monitoring platform. “Marfrig constantly develops technologies to mitigate risks, while permanently engaging suppliers and ensuring transparency for all stakeholders,” he said.

Pianez also said only 47% of its cattle came from “full cycle” farms. Its annual report from auditors DNV.GL said: “Marfrig’s indirect suppliers are not systematically verified … Marfrig argues that the lack of a nationally implemented public traceability policy makes it difficult to implement such a verification.”

JBS’s audit from the same company made a similar observation. “Regarding indirect suppliers, JBS and the industry in general does not yet have in place a verification system in these cases,” it said.

The company said in an email that its Amazon monitoring system covers more than 280,000 sq miles, assesses more than 50,000 farms every day and has blocked more than 8,000 supplying farms due to non-compliance. “We acknowledge that indirect supplier monitoring remains an industry-wide challenge and we have been working with local authorities, government and wider industry to gain access to the data and tools required to address this issue.”

“JBS is committed to eradicating deforestation, ensuring sustainable livestock practices and improving the livelihoods of farmers in the Amazon region,” a company spokesperson said in an email. “We urge those who share the common goal of ending deforestation to seek solutions rather than criticism.”

The groups signing this letter argued that neither company has done enough.

“Buying shares in these companies means running a big risk in being involved in deforestation in the Amazon,” said Christian Russau, from Germany’s Association of Ethical Shareholders. “We in Europe are also responsible.”


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