The merger will significantly expand the deforestation footprint of a single company. Transformative changes can take place if the new entity adopts more conservative deforestation and land conversion policies. Additionally, public-to-private transactions are raising concerns around sustainability transparency in the M&A market. Private-to-public transactions on the other hand offer a chance for enhanced ESG disclosure. This merger can bring greater scrutiny and engagement in Viterra’s previously opaque operations.
Bunge’s capital market activity suggests it could issue debt soon, which presents an opportunity for bond investors to have influence. Given increased policy focus on deforestation, investors should encourage the company to implement a stronger deforestation reduction strategy, potentially by proposing a Sustainability-Linked Bond coupled to deforestation reduction targets.