Every day in slaughterhouses across Brazil, tens of thousands of cattle are slaughtered into selected meat pieces, burgers and ready-to-eat food, which are sold domestically and around the world.
Although the booming multi-billion dollar trade has made this Latin American country the world’s largest beef exporter, the exact origin of these animals is often a mystery.
“One person produces calves, one raises it, and another is responsible for fattening,” said Gilberto Tomazoni, CEO of JBS. The company is the world’s largest meat processor with an annual turnover of 50 billion U.S. dollars. “Basically, there is a lack of information to monitor our suppliers’ suppliers.”
The Sao Paulo-based group suffered earlier this month Network attacks In its North American and Australian systems, it has long been accused of being related to ecological damage.But with the challenges facing Brazil, it is now embarking on a comprehensive sustainable development Threat of divestment And the product boycott of the Amazon rainforest.
In a large industrial park located in Lins, inland in Sao Paulo state, JBS vigorously promotes the recycling of plastic waste and the use of bagasse to generate renewable energy as evidence of its efforts.
However, with the country’s top meat processors committing to reduce greenhouse gas emissions, solving the problem of where their cattle come from is crucial to the efforts to clean up this industry, which is one of the driving forces of deforestation and a global cause. An important factor in warming.
JBS recently set a goal of net zero emissions by 2040, which will involve reducing its own and indirect emissions and then offsetting the remaining emissions.
Its main competitors Marfrig and Minerva Foods are pursuing similar ambitions.
Kiran Aziz, a senior analyst at KLP, Norway’s largest pension fund, said: “Given the severity of deforestation in Brazil, this is very timely.” Due to the risk of corruption, the fund excluded JBS in 2018. Outside of its portfolio. “The more important thing is execution.”
More than ten years ago, the three agreed to prove that they did not directly or indirectly purchase animals from farms engaged in deforestation in the Amazon. Given its ability to absorb carbon dioxide, the rainforest is a fortress against climate change.
Australia’s red meat and livestock industry also aims to achieve Carbon neutral By the end of this century, Tyson Foods, the largest meat company in the United States, is working to reduce greenhouse gas emissions by 30% by 2030.
However, according to recent data, most of the world’s largest meat and dairy companies have not made clear net-zero commitments. New York University Research.
Rear The destruction of the Brazilian Amazon When it soars to a 12-year high in 2020, meat processors there are under pressure to prove that their commitment is more than just a green wash.
Inaction can bring financial risks. According to data from Chain Reaction Research, at least a quarter of the three major Brazilian groups rely on European investors and banks, including debt financing and equity holdings.
“They face the risk of a rebound from European institutions, such as Nordea’s divestment from JBS,” said Matthew Piotrowski, director of policy and research at Climate Advisers, referring to the Finnish-based asset The management company decided last year to dump stocks on environmental issues and other issues.
Maria Lettini, head of the Fairr Initiative, an investment consulting and research network, said: “In general, investors are very supportive, but many people are skeptical about how they can achieve these net-zero goals.”
Although Brazil’s largest beef processor has successfully monitored direct cattle sellers, they have not yet implemented full traceability of the scattered, sometimes small-scale pastures that enter the production chain and where animals can spend most of their lives.
Although official documents are required for each stage of animal transportation, the documents are not public and the privacy law prohibits the sharing of third-party data. When the different feeding stages are not carried out on the same farm, this makes it difficult to trace the source other than the direct seller.
“[The] The complexity of Brazilian livestock production is that we have 2.5 million cattle producers spread across large areas of the country,” said Paulo Pianez, director of sustainability at Marfrig. “For each direct supplier, we can have 10 indirect suppliers. . “
Satellite image It has been used as a tool to check whether direct suppliers comply with rules that prohibit deforestation and encroachment on indigenous territories. In this way, JBS monitored 60,000 farms in an area 1.5 times the size of Germany and stated that it excluded any sellers who found violations.
The important task now is to gain visibility down the chain. JBS developed a system Based on blockchain The certification of each cow is tracked safely and confidentially, so animals from illegally harvested land cannot be “washed” through the legal pastures that supply the group.
The data is then sent to industry associations for verification, and the results are shared with livestock sellers. By 2025, all direct suppliers of Amazon must register for the JBS digital ledger, which will be independently audited or face rejection.
Marfrig has determined that 62% of all its cattle are from the Amazon and 47% are from the Cerrado savanna biome, including direct and indirect suppliers, and is recording information through a blockchain-enabled platform.
For its part, Minerva claims to be the first meat processor to expand geospatial monitoring outside the Amazon, tracking direct suppliers in areas such as the Cerrado, Atlantic Forest, and the swamp Pantanal.
It is now integrating traceability tools into its existing system in order to gather more information about Amazon’s indirect supplier risks.
Taciano Custódio, Minerva’s Director of Sustainability, said his analysis showed that most properties in tropical rain forests that overlap with deforestation are relatively small. If they are a cattle farm, they may only provide a few livestock per month.
“The challenge of deforestation in Brazil is not just about the environment-it is related to social development,” he added. “This is the survival of these guys.”
However, even if the Brazilian beef industry wants to eliminate deforestation, cattle raising itself will produce a lot of methane, which is a more effective greenhouse gas than carbon dioxide.
According to Imaflora, approximately 70% of Brazil’s agricultural emissions come from cattle digestion and related activities.
“This is a lot, and if you add it to the emissions from deforestation for cattle breeding, it will be bigger,” said project coordinator Isabel Garciadrigo.
The researchers said that possible solutions include adopting more intensive farming methods to increase land productivity while shortening the lifespan of cattle, which are often longer than those in the United States or Canada. Another focus is on animal feed, whether it is supplements or different types of grass, to reduce the methane emitted by animals.
“The cost of changing the model is not small,” Derigo said. “if they [the meatpackers] Invest a lot of money to help manufacturers reduce emissions, so yes, it is possible. “
JBS has allocated US$1 billion in decarbonization investments over the next ten years, and Tomazoni pointed out that “renewable” agricultural projects that combine livestock with crops and reforestation can help sequester carbon. JBS plans to invest US$100 million in research and development by 2030 to support this kind of agriculture.
The food group reported net income of 4.6 billion reais (US$860 million) last year.
Minerva has allocated 1.5 billion reais for emission reduction, and Marfrig has allocated 500 million reais, mainly for achieving complete cattle supply chain visibility by 2030. Last year, the net income of the two companies was 697 million reais and 3.3 billion reais.
Despite the stricter scrutiny, some people worry that meat processors may not have enough business incentives to act quickly.
Despite people’s knowledge of the climate emergency, global demand for beef remains strong, and Brazilian cattle prices have reached record levels. Although Minerva’s stock price has fallen slightly, the stock prices of JBS and Marfrig have risen by at least a quarter in 2021, surpassing the broader Brazilian market.
Activists criticized the department’s commitment for being too remote. For example, JBS has committed to ending illegal logging in its Amazon supply chain by 2025, ending illegal logging in other Brazilian biomes five years later, and finally achieving zero deforestation globally by 2035.
As a seller’s market, if producers do not like the conditions of meat processors, they may transfer their materials to other places.
“Again, it is naive to believe that more commitments from a core industry… are emission producers,” said Greenpeace activist Daniela Montalto. “We are talking about land grabbers, and the ranches wash illegal cattle into the slaughterhouse supply chain.”
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