In Brazil, Around World, Finance Sector Amazon Pledges Toothless, Meaningless, Largely Ignored
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In 2019, for example, JBS, the world’s biggest meatpacker, dedicated just two paragraphs from 650 pages to say that climate change could “have adverse material effect on operational results, financial situation and liquidity.” The document fails to relate the main activity of the company, which had 32 meatpackers in the Amazon in 2017, with the risk of deforestation and its consequences in controlling global temperatures. The only time the problem is mentioned is in a chapter titled “Legal actions,” when it references the Beef TAC (Terms of Adjustment of Conduct), an agreement made with the Federal Prosecutor’s Office in which JBS commits to not purchase cattle from illegally deforested areas. The company notes that “there is no chance of [financial] losses” as result of the TAC. Federal prosecutor Daniel Azeredo said the instrument has not been sufficient to keep the large meatpackers from slaughtering cattle reared in deforested areas.
The Central Bank of Brazil (BC), which regulates the national financial system, also published resolutions requiring banks and financial institutions to consider the environmental aspects of their operations. The oldest, from 2008, requires that farm owners in the Amazon supply documentation proving legal environmental status of their land in order to receive loans. But the rule didn’t catch on. According to the BC press office, no financial institutions have ever been sanctioned for not complying with the resolution. The only time a bank was charged with financing deforestation was in 2016, when the federal environmental regulator, IBAMA, fined Santander 47.5 million reais ($8.8 million) for financing grain farming in an environmentally protected region. The land in questioned was under embargo, a fact that was ignored when the bank analyzed the credit application. The Federal Prosecutor’s Office charged the bank another 7.3 million ($1.3 million) for environmental damages. Santander appealed; three years later, it still hasn’t paid a cent. IBAMA lists 19 banks that have been fined for environmental illegalities, but Santander is the only one written up for financing farming on embargoed land.
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The most important green-investment agreement was signed in 2006 at the New York Stock Exchange and known as the PRI initiative, or “Principles for Responsible Investment.” Its more than 3,000 signatories committed to incorporating environmental, social and corporate governance questions in their investment decision-making, even though some of them finance the meatpackers operating in the Amazon. BlackRock is an emblematic case: in January of this year, its CEO and asset manager, Larry Fink, released a letter announcing a corporate decision to “place sustainability at the heart of our investment strategy.” But until last year, BlackRock was one of the 15 biggest investors globally in Brazil’s beef production chain in the Amazon. Between 2013 and 2019, it carried out 36 transactions for the purchase of debt securities and shares in the top three meatpackers, amounting to a combined $236 million.
A domestic example is Bradesco, the Brazilian bank that prominently touts its participation in the PRI and several other voluntary environmental agreements. Yet the company remains the second-largest Brazilian financer of meatpackers operating in the Amazon, according to the analysis carried out by ((o))eco based on Global Witness data. In Brazil, 63 institutions signed the PRI. The list includes no beef companies.
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https://news.mongabay.com/2020/08/all-talk-no-walk-green-financiers-still-support-amazon-beef-industry/