The Forensic Carbon Accountant: JBS SLB

10 minute read

JBS, a Brazilian meat producer, is a company with significant sustainability issues linked to deforestation. It is currently seeking a US stock listing, which is raising scrutiny of both its environmental commitments and its corporate governance.

Emissions reporting is an essential input into influencing the climate crisis: “what you don’t measure, you can’t manage”. The Forensic Carbon Accountant investigates emissions disclosures for investors, to support aligning portfolios with net zero targets.

JBS has issued three Sustainability-Linked Bonds (SLBs), with a coupon step-up linked to emissions intensity commitments. In this report we analyse JBS’ emissions reporting to understand the implications for bondholders.

JBS has reported its 2019 Scope 1 + 2 emissions (at least) four times, with each being different. In our view, this shows minimal commitment to transparency around sustainability performance, which forms a key part of investor dialogue.

As such, SLB investors have an opportunity to request clarification from JBS. SLBs derive their value from issuer KPIs, here Scope 1 + 2 emissions intensity, and so the burden of transparency on JBS is higher. SLB investors can demand explanation and scrutiny of restatements.

A number of the lead arrangers of JBS’ recent bonds have deforestation policies that, according to our analysis, would make them unable to accept business from JBS. This may make it difficult for JBS to access finance in the future.

Download pdf (0.3mb)