The world’s biggest stock exchange has been urged to decline the public listing of meat giant JBS over claims the company is “profiting from the proceeds of crime”.
Environmental campaigners have filed a legal notice letter to the board of the New York Stock Exchange (NYSE) this week. The letter warns that the initial listing of JBS shares risks “violating US anti-money laundering laws” over what it claims was the company’s “long history” of profiting from meat originating from illegally deforested land in Brazil.
In an eleventh-hour bid to stop the listing, Mighty Earth – which sent the legal notice – claimed JBS “allowed cattle grazed on illegally deforested land to enter its beef supply chains in Brazil” and warned that “any listing would be facilitating the distribution, use or control of the proceeds of crime to shareholders”.
JBS received approval to list its shares on the US stock market on 12 June, following years of controversial back and forth between the Brazilian meatpacking company, US financial regulators and campaign groups from around the world.
However, it said on Wednesday it was delaying the listing to 13 June due to ”the non-conclusion of certain operational procedures”.
The Securities and Exchange Commission (SEC) decision to allow JBS to trade on US financial markets followed reports that the company’s subsidiary, Pilgrim’s, was the biggest donor to the inauguration committee of Donald Trump.
Illegal deforestation claims
Under US law, the NYSE cannot knowingly allow the trading of shares linked to unlawful conduct. Eco-activists have long claimed JBS purchased cattle raised on illegally deforested land in the Amazon and elsewhere in Brazil.
The meat giant has repeatedly denied the claims and responded to accusations by saying the NYSE listing presented a valuable opportunity for stakeholders and that it was committed to sustainable growth and transparency.
JBS said in a statement: “The NGO allegations are unfounded and knowingly misleading.
”Our focus is on delivering shareholder value and opportunities for our team members and supply chain partners around the world while continuing to lead efforts to reduce deforestation risk in our Brazilian supply chain and to accelerate sectoral change in line with our five pronged approach.”
The company’s ”five-pronged approach” to reduce the risk of deforestation in its supply chain includes ”enforcing a rigorous zero-tolerance agricultural commodity sourcing policy with strong anti-deforestation measures”, using supply chain monitoring and enforcement capabilities, providing ”free technical assistance and extension services for producers”, ”accelerating sectoral changes through multi-stakeholder engagement” and ”promoting sustainable development in the Amazon region with the JBS Fund for the Amazon”.
But in January this year, JBS’s global chief sustainability officer Jason Weller admitted in a Reuters interview that the company’s emissions goals were “aspirational” and that JBS had “zero operational, contractual or legal control of its supply chain”.
Mighty Earth’s legal notice comes as the group publishes new analysis detailing “continued illegal deforestation in JBS’s beef supply chains in Brazil”. It is hoping to build on legal precedent by citing the Shein case, whose NYSE and London IPOs were derailed over concerns around alleged forced labour in its supply chains.
Alex Wijeratna, senior director at Mighty Earth, said: “JBS profits from criminal conduct, by purchasing cattle which begin their lives on illegally deforested land in Brazil before being laundered through ‘clean’ farms in its direct supply chains.
Read more: JBS boss calls for financial help for small producers in sustainability switch
“Astonishingly, JBS has admitted that it has no control over its supply chain in Brazil. If the New York Stock Exchange turns a blind eye to this and allows JBS to list its shares, it would be seen as explicit approval of using public markets to launder criminal proceeds and will violate US anti-money laundering laws.
“Even at the eleventh hour, the NYSE must do the right thing and decline the JBS listing in New York.”
JBS claimed campaigners’ recent analysis lacked robust evidence to back up links between the company and farms actively engaged in deforestation, and refuted each of the “likely” cases analysed by Mighty Earth.
A new corporate structure
JBS’s new corporate structure as a result of the NYSE listing grants the Batista family, who grew the company from a small family business to a global behemoth, nearly 85% of voting power in its governance.
This will “limit opportunities for minority shareholders to exert influence over the company”, according to environmental and civil society giant Global Witness, including its impact on the environment and populations affected by its supply chain.
Also ahead of its Wall Street listing, the reported legal liabilities from complaints faced by meat giant JBS have more than tripled from $1.8bn as of June 2023 to $6.9bn at the end of 2024, according to new findings from Global Witness.
Read more: Scandal-hit Batista brothers back at helm at JBS after board reinstatement
This increase in reported liabilities could carry significant implications for the firm and investor confidence, said the NGO, which calculated the figures by comparing changes in the company’s multiple F-4 filings to the SEC as part of its dual listing application.
Global Witness reported that between its June 2024 and November 2024 F-4 filings, JBS revised its “possible” losses upwards by $3bn. This meant that the meat giant’s total reported liabilities almost tripled from $1.8bn to almost $7bn in less than two years.
JBS told Global Witness the sharp increase in reported “possible” legal liabilities in its SEC filings was due to enhanced disclosure requirements, not a change in how the company estimates such risks.
History of scandal
Global Witness senior policy advisor, Ashley Thomson, said: “The size of JBS’s liabilities reflects its well-documented history of environmental, human rights, and governance scandals that have caused real harm to people, forests, and public trust.
“Despite these liabilities, the company has secured a new corporate structure that consolidates the Batista family’s control while granting it unprecedented access to the world’s largest stock exchange.”
Thomson said this “raises urgent questions: why was this structure chosen? How did the company’s legal liabilities shift so dramatically in such a short time? And, most importantly: why would the SEC allow a company carrying this level of risk to list at all?”
Allowing a company with JBS’s deforestation footprint to access US capital markets “undermines global efforts to protect forests and meet climate goals”, she claimed.
“The SEC’s decision here isn’t just a risky choice for the market and investors, it’s one with material planetary consequences. JBS’s first day of trading marks a dark milestone for forests and communities all over the world.”
No comments yet