Mighty Earth, an environmental advocacy group, filed the complaint. It is alleging JBS in 2021 issued $3.2 billion in four separate “Sustainability Linked Bonds” (SLBs), which were tied to its stated commitment to achieve net-zero emissions by 2040.
In its complaint, Mighty Earth cited a June 2021 report by ISS ESG, the sustainable investment arm of Institutional Shareholder Services. That report, commissioned by JBS, stated that it has “taken steps toward understanding its own Scope 3 footprint in some of its geographies and expects to introduce measurement and reduction strategies” as part of its net-zero commitments.
In reality, JBS has been misleading, concealing, and massively under-reporting its climate emissions, said Alex Wijeratna, senior director at Mighty Earth. Mighty Earth cited data from an October 2022 report by the Institute for Agriculture and Trade Policy (IATP), which estimated JBS’ emissions from its livestock production “increased its annual greenhouse gas emissions by a whopping 51 percent between 2016 and 2021, from 280 million metric tons to 421.6 million metric tons,” based on the IATP’s latest calculations.
Lack of Emissions Reporting
Mighty Earth further cited data from the IATP finding that JBS does not “comprehensively publicly report its annual GHG emissions for Scope 1, 2 and 3, nor does it consistently or comprehensively publish its slaughter figures from year to year,” the IATP said.
The complaint alleges JBS omitted material information in its bond offering and investor presentations concerning its Scope 3 emissions, which account for 97 percent of its climate footprint, according to Mighty Earth. According to Mighty Earth, these omissions are “denying U.S. investors vital information to make fully informed decisions about JBS’s net zero and climate-related claims as they decided whether to purchase these SLBs.”
“JBS seduced investors with sustainability pledges, but those pledges had practically zilch to do with the actual source of JBS’s supersized climate impact,” said Mighty Earth CEO Glenn Hurowitz. He added that JBS “simply shouldn’t be able to ignore the environmental impact of 97 percent of [its] operations and then market [itself] as green.”
Corporate Recidivist
The complaint before the SEC comes against a backdrop of JBS’s long history of misconduct and enforcement actions, including the following:
- In October 2020, JBS reached a $27 million settlement with the SEC, and a related $256 million criminal penalty from the Department of Justice, for widespread violations of the Foreign Corrupt Practices Act.
- In February 2022, JBS reached a $52.5 million antitrust settlement for its role in a widespread price-fixing scheme on behalf of a group of beef wholesalers.
- In September 2022, JBS USA paid more than $57 million in total settlements for its role in a pork price-fixing scheme.
“JBS’ long history of corporate misconduct—resulting in billions of dollars in fines from several governmental agencies, and yet no apparent modification of its behavior—make plain that the company needs more than a slap on the wrist,” said Kevin Galbraith, the attorney representing Mighty Earth and the whistleblower. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.