JBS S.A. is the parent of the global corporate structure referred to as “the JBS Group.” The JBS Group consists of JBS S.A. and its consolidated subsidiaries, including JBS USA. JBS S.A. The JBS Group’s operations span a variety of industries and products, most of which are related to the processing, distribution, and sale of animal-based products worldwide. Other business activities include prepared foods, transportation, fertilizers, and the sale of leather, collagen, and biodiesel. The JBS Group claims to be “the largest protein company and the largest food company in the world in terms of net revenue for the year ended December 31, 2022.” The JBS Group states that its net revenue in 2022 was USD $72.6 billion. It also claims to be the global leader in beef and poultry production capacity and the second largest global pork producer.

On February 28, 2024, the New York State Attorney General (“NY AG”) announced that it had filed a lawsuit against JBS USA Food Company and JBS USA Food Company Holdings the American subsidiary of the world’s largest producer of beef products, for misleading the public about the environmental impact of its business operations.

According to the NY AG’s complaint, JBS USA has made several misleading claims about its environmental impact, including pledges to curb deforestation and reduce its greenhouse gas emissions.

At a 2015 industry presentation, a JBS USA executive said it was important for beef producers to convey to consumers that they were lowering their environmental impact to maintain their share of the food market. Since that time, JBS Group and JBS USA have continued to make claims about the sustainability of beef products. For example, in April 2021, the company ran a full-page advertisement in the New York Times that featured the “net zero” claim. As recently as September 2023, the JBS Group CEO told the audience at a Climate Week event in New York City that the company “pledged to be Net Zero in 2040.” As of February 2024, the company’s website still boasts that claim.

Further, according to the NY AG’s complaint, recent studies have shown that people are influenced by a company’s environmental reputation and are willing to change their habits to switch to more environmentally friendly products: more than two-thirds of American adults are willing to pay more for sustainable products. JBS Group and JBS USA have used greenwashing and misleading statements to capitalize on consumers’ increasing desire to make environmentally friendly choices, claiming:

• “Agriculture can be part of the climate solution. Bacon, chicken wings, and steak with net zero emissions. It’s possible.”
• “We will cut our own emissions by 30% in 2030 and eliminate Amazon deforestation from our supply chain within five years.”
• “JBS will achieve net zero greenhouse gas emissions, reducing its direct and indirect emissions and offsetting all residual emissions.”

It is alleged that JBS Group and JBS USA repeatedly misled consumers with these claims while the company’s executives told their industry peers that they needed to use messaging targeted to climate-conscious consumers in order to remain competitive. In reality, when making these promises, JBS Group and JBS USA had not calculated the company’s total greenhouse gas emissions, and therefore had no way of knowing whether they could successfully reduce those emissions to net zero by 2040.

JBS USA continued to make these false claims despite receiving a warning from BBB National Programs’ National Advertising Division (NAD), which determined that the company’s evidence did not support the net zero claims it was making to consumers. The NAD recommended that JBS USA stop making these net zero claims in its advertising. This recommendation was affirmed by the National Advertising Review Board.

Further, the JBS Group’s greenhouse gas emissions calculations have not accounted for emissions resulting from deforestation in the Amazon. The company’s “net zero” commitment is not feasible given the current scope of the JBS Group’s business operations and its plans to significantly increase beef production.

On the news of the filing of the New York AG’s Complaint, JBS's American Depositary Receipt ("ADR") price fell $0.22 per share, or 2.38%, to close at $9.02 per share on February 28, 2024.

If you are a JBS SA investor and would like to learn more about this matter, you are encouraged to contact Joshua H. Grabar at [email protected] or Mia R. Heller at [email protected], or call 267-507-6085.