The commitment of Brazilian meat vessels to the emissions targets being studied

Every day in slaughterhouses across Brazil, tens of thousands of animals are slaughtered at home and in cuts, burgers and prepared foods sold all over the world.

Although the billions of dollars worth of growing Latin American nation has become the world’s largest exporter of meat, the exact origin of the animals remains a mystery.

“There’s one guy who produces beef, one who grows and fattens another,” said Gilberto Tomazoni, CEO of JBS, the world’s largest meat processor with a $ 50 billion annual turnover. “Basically, there has been a lack of information to keep track of our suppliers.”

The team, which is headquartered in São Paulo, earlier this month cyberattack In North American and Australian systems, it has long been accused of being linked to ecological damage. But now it is pushing for sustainability in the face of Brazil threats of divestment and boycotts of products in the Amazon rainforest.

In the vast industrial complex of Lins, in the interior of the state of São Paulo, JBS presents initiatives such as the recycling of plastic waste and renewable energy provided by a sugar cane power plant.

However, as the country’s major meat packers commit to reducing greenhouse gases, solving guessing where their cattle come from will be essential to efforts to clean up the industry, one of the drivers of deforestation, and a major contribution to global warming.

JBS recently set a goal of a zero net by 2040, which will lead to a reduction in own and indirect emissions to offset the remaining ones.

Its main rivals, Marfrig and Minerva Foods, are looking for similar intentions.

“Given the seriousness of the situation with deforestation in Brazil, this is quite appropriate,” said Kiran Aziz KLP, chief analyst at Norway’s largest pension fund, which has left JBS out of its wallets in 2018 due to the risk of corruption. “The most important thing is to implement it.”

The trio agreed more than a decade ago to prove that they did not buy animals directly or indirectly from farms that carried out deforestation in the Amazon. Given its ability to absorb carbon dioxide, the rainforest is a haven from climate change.

It also aims to reach the Australian red meat and livestock industry carbon neutrality by the end of the decade, the largest U.S. meat company, Tyson Foods, was working to reduce greenhouse gas emissions by 30 percent by 2030.

However, most of the world’s largest meat and dairy companies have not made an explicit zero commitment recently. research New York University.

Then Destruction of the Brazilian Amazon When it reached a 12-year maximum in 2020, its meat vessels came under pressure to prove that the commitments were not a green cleaning exercise.

Inaction involves financial risk. According to Chain Reaction Research, Brazil’s three major groups depend on European investors and banks for at least a quarter of their funding, including debt financing and equity.

“European institutions are at risk of backtracking, as Nordea is divesting JBS,” said Matthew Piotrowski, director of policy and research at Climate Advisers, referring to the decision of the Finnish-based asset manager to dispose of the stock last year. environmental concerns and other issues.

Maria Lettini, director of the Fairr Initiative, an investment advisory and research network, said: “Overall, investors are quite supportive, but many are skeptical of how they will achieve these zero clear targets.”

Although Brazil’s largest meat-processing processors have managed to control direct cattle sellers, they have not yet established full traceability of scattered and sometimes small-scale ranchers that feed on production chains and give animals their entire lives.

Although official procedures are required for each stage of the animal’s passage, the documentation is not public and privacy laws prevent the sharing of third-party data. When different growth phases are not carried out on the same farm, this makes it difficult to look for the origin beyond the immediate seller.

“[The] the complexity here in Brazilian livestock production is that we have 2.5 million producers with cattle, spread over a wide area across the country, “said Paulo Pianez, Marfrig’s director of sustainability.” For every direct supplier, we can have 10 indirect suppliers. “

Satellite images it is already used as a tool to verify that direct suppliers comply with the rules against deforestation and access to indigenous territories. JBS controls 60,000 farms in this way, 1.5 times the size of Germany, and said it excludes vendors found in the breaches.

Now the main task is to get visibility down the chain. JBS has developed a system based on the block chain the certificate of each cattle to be kept in a safe and confidential manner, so that the animals on the illegal lands cannot be “peeled” through the ranches that supply the group.

The data are then sent to an industry association for validation and the result is shared with the livestock seller. All direct Amazon providers will be required to register by 2025 in the JBS digital book, which will be independently inspected or excluded.

Marfrig has identified the origins of 62 percent of all Amazonian cattle and the origins of the Cerrado savannah biome, including direct and indirect suppliers, and is recording through a platform enabled to block information.

Minerva, meanwhile, says it is the first meat vessel to extend geospatial monitoring outside the Amazon, following direct suppliers to Cerrado, including the Atlantic forest and the marshy region of Pantanal.

It is now integrating a traceability tool into its system to gather more information about the risks surrounding Amazon’s indirect suppliers.

Taciano Custódio, Minerva’s sustainability director, said his analysis showed that most of the overlapping properties of forest deforestation were relatively small in size. If there are ranchers, they would probably give a few animals a month.

“The challenge of deforestation in Brazil is more than the environment – it is linked to social development,” he added. “This is survival for these guys.”

However, even if deforestation is removed from the Brazilian meat industry, livestock growth will naturally result in a large amount of methane, a more powerful greenhouse gas than CO2.

According to Imaflora, 70% of all agricultural emissions in Brazil come from beef digestion, as well as related activities.

“It’s a lot, and if you add it to the emissions caused by deforestation to raise livestock, it’s even greater,” said project coordinator Isabel Garcia Drigo.

Researchers say the possible solutions are more intensive farming methods to improve land productivity, along with shortening livestock life, which is usually longer than in the US or Canada. Another focus is on animal feeds, supplements or different types of herbs, to reduce the methane that animals burn.

“The costs of changing the model are not insignificant,” Drigo said. “They are [the meatpackers] put a lot of money into helping producers reduce emissions, then yes, it’s possible. ”

JBS has earmarked $ 1 billion for decarbonization investments over the next decade and has highlighted Tomazoni’s “regenerative” agricultural projects that combine livestock harvesting and reforestation with the help of carbon sequestration. JBS expects to spend $ 100 million on R&D by 2030 to support this type of agriculture.

The food conglomerate had a net profit of $ 4.6 billion ($ 860 million) last year.

Minerva has earmarked $ 1.5 billion to reduce emissions and Marfrig $ 500 million, mostly for the full visibility of the beef supply chain by 2030. Last year, companies generated net revenues of $ 697 million and $ 3.3 billion, respectively.

Despite the increased study, there are some fears that meat vessels may not have enough commercial momentum to act quickly.

For all awareness of the climate emergency, global beef demand is strong and cattle prices in Brazil have hit record levels. While Minerva’s shares have fallen slightly, JBS and Marfrig’s share prices have gained at least a quarter in 2021, above the broader Brazilian market.

Entrepreneurs criticize the sector’s commitments too far. JBS, for example, is committed to ending the illegal registration of the Amazon supply chain by 2025, another five years later in other Brazilian biomes – and finally zero deforestation by 2035.

Because it’s a sellers ’market, producers can pretend to move their material elsewhere if they don’t like the conditions of the meat bowl.

“It’s naive to rely again on more promises from a grassroots industry… It’s a producer of emissions,” said Daniela Montalto of the Greenpeace campaign. “We’re talking about land grabbers in the abattoir supply chain about laundering illegal cattle.”

Follow @ftclimate on Instagram

Climate Capital

Climate change where business, markets and politics come together. Browse FT coverage here.

Are you curious about FT’s environmental sustainability commitments? Find out here about science-based goals