Brazil meat giant JBS vows net zero by 2040 amid record profits

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The Brazilian company JBS, the world’s biggest meat processor, has announced record profits a day after it pledged to reach net-zero greenhouse gas emissions by 2040 – the first global meat and poultry company to do so.

Surging exports to China and Hong Kong fed its record profit of 4bn Brazilian reais (GBP516m) for the last quarter of 2020 – up a staggering 65% on the previous year – the company said on Wednesday night. Sales to China and Hong Kong from Brazil grew by about 60%, it said.

The results meant the world’s biggest protein producer had “plenty of money to spend in removing illegal deforestation from its Amazon supply chain”, as it promised to do by 2025, said Mauro Armelin, director of Friends of the Earth for the Brazilian Amazon. And it had no excuses if it failed to meet a target it originally promised to hit in 2011, he added.

“They have enough money to invest in their production chain,” said Armelin. “Those billions and billions are not just to pay dividends to shareholders.”

Booming exports to China and the collapse of the Brazilian real were key to JBS’s record profits, said Fernando Iglesias, an analyst at the consultancy Safras & Mercado (Harvests and Market). “JBS has always been one of the Brazilian companies that most benefited from China and always knew how to take advantage of this,” he said.

The company said it proposed paying out R$2.5bn in dividends in 2021. Business is also blossoming for its Brazilian meat-processing rivals Minerva and Marfrig.

All three Brazilian meat companies have come under intense pressure in recent years to eliminate illegal deforestation from their Amazon supplier farms. They monitor the finishing farms that sell to their abattoirs – called “direct suppliers”. But they are unable to control the “indirect suppliers” selling to finishing farms or other supplier farms.

Last year both JBS and Marfrig announced plans to monitor all their Amazon supply chains by 2025 and Minerva is working on a solution using a system called Visipec. On Wednesday, Marfrig said that by the end of 2020 it was already monitoring 62% of its Amazon supply chain.

On Tuesday, JBS promised to achieve net-zero greenhouse gas emissions by 2040. “Climate change is the big challenge of our time,” the JBS chief executive, Gilberto Tomazoni, said in a statement. “Agriculture can and should be part of the global climatic solution.”

But Armelin said much of the net-zero target would probably be met if JBS eliminated all deforestation from its Amazon supply chain by 2025 – as promised last year. Environmentalists said then that the target was too far off.

“That will be JBS’s big emission factor, based on Brazilian emissions,” Armelin said.

JBS has also promised to remove all illegal deforestation from its entire Brazilian supply chain – including the threatened Cerrado, or savanna region – by 2030, convert to renewable electricity by 2040 and reach zero deforestation globally by 2035. JBS has said it would invest $1bn (GBP720m) over the next decade in the net-zero programme.

  • Dom Phillips is a 2021 Alicia Patterson Foundation fellow.

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