Andre Penner/AP
- US and UK lawmakers are rallying against an IPO by the world's largest meatpacker, JBS.
- The company has been linked to deforestation of the Amazon rainforest.
- Brazil says two-thirds of Amazon deforestation comes from converting land into pastures for livestock.
In recent weeks, lawmakers in the United States and the United Kingdom have sent letters to the Securities and Exchange Commission cautioning against the listing of JBS, the world's largest meatpacking company, on the New York Stock Exchange.
Trading on the world's largest exchange would give JBS access to more capital and enhance its credibility. But the lawmakers, along with environmental groups, argue that expanded capital would allow the company, responsible for much deforestation in the Amazon rainforest, to do even more harm.
The dispute surrounding JBS's bid highlights the connection between finance and various drivers of climate change, including deforestation. It also raises questions about gauging claims that a company is committed to improving its environmental record.
Many companies listed on the New York and other stock exchanges have had, or still have, questionable environmental records. But often they have been listed for decades, having gone public when there was much less scrutiny of ecological impacts from business operations.
"Dozens of journalistic and NGO reports have shown that JBS is linked to more destruction of forests and other ecosystems than any other company in Brazil," said the letter from 15 U.S. senators, released last week. "The company has made repeated claims that it will eliminate deforestation but has not taken meaningful steps to do so."
The letter, signed by Democrats and Republicans, comes days after a similar one from 11 British lawmakers that said letting JBS raise capital from shareholders "contradicts global efforts of governments and businesses to take action to mitigate climate change" and to "preserve essential natural habitats."
A spokesperson for the SEC, which has regulatory oversight of the NYSE, said it doesn't comment on individual filings. JBS, which applied in July, and the NYSE didn't respond to questions. The SEC has broad authority in regulating capital markets, including approving or denying company applications to get on an exchange, requiring disclosures and fining companies if they break financial laws.
Two-thirds of Amazon deforestation results from conversion to pasture for livestock, according to the Brazilian government. JBS, with the largest slaughter capacity in the region, buys thousands of cows raised illegally annually, according to audits by federal prosecutors.
JBS has pledged to make all cattle purchases traceable by 2025 and to reach net zero, or equalize all carbon emissions, by 2040.
In 2020, it created the JBS Fund For the Amazon. The goal is to finance "innovative, long-term initiatives that build on JBS S.A.'s legacy of conservation and sustainable development in the Amazon Biome," according to an SEC filing.
Since then, the fund has provided $15 million to 20 projects, according to its website. The company has pledged to commit a total of $51 million to the fund through next year.
The US is JBS's largest market, with 51% of sales, followed by 27% in Brazil, where it employs about 270,000 people.