Today, the New York Attorney General (AG) sued global meat giant JBS over misleading net-zero climate claims. New York’s AG charged that JBS’ claim that it would reach net-zero emissions by 2040 was misleading to consumers because the company had no clear and achievable plan to reach the 2040 target. The lawsuit is the first from a U.S. regulator targeting climate claims made by a major food company and will be watched closely by others in the sector.
When JBS announced it would reach net zero by 2040 in 2021, it sounded too good to be true, even impossible. In 2018, IATP and GRAIN published Emissions Impossible, the first-ever analysis of the world’s biggest meat and dairy companies’ greenhouse gas (GHG) emissions. Using corporate and publicly available data and the U.N. Food and Agriculture Organization’s Global Livestock Environmental Assessment Model (GLEAM), we reported on the enormous climate footprint of the world’s largest meat and dairy companies. JBS, with operations in more than 20 countries, had by far the largest footprint of any company we analyzed, more than double the next largest company, Tyson Foods. In November 2022, we worked with Changing Markets Foundation to publish Emissions Impossible: Methane Edition, which found that JBS was far and away the largest emitter among meat and dairy companies of the potent GHG methane.
When JBS announced its 2040 net-zero pledge in 2021, it was the boldest of any major meat company. We immediately dug into the pledge’s details to find out how JBS could possibly achieve this target, even as the company was positioning itself to expand meat production to meet a projected 70% growth in the global protein market as populations and incomes increase. Our analysis, Behind the curtain of the JBS net zero pledge, found numerous carbon accounting loopholes and little information about major sources of emissions within the company’s supply chain. Specifically, we pointed to the company’s lack of transparency on basic carbon accounting, such as what baseline it uses to measure emission reductions. It appeared the company was excluding its largest source of emissions: livestock and associated manure and feed emissions. There was no clear third party or public reporting requirement to ensure the company was on track and held accountable to its climate claims. Additionally, an undeclared portion of JBS strategy required the use of land-based carbon sequestration to offset emissions, raising concerns about how much land would be needed, the risk of reversibility and significant uncertainties in measuring sequestration over time as the climate changes.
Shortly after the company’s announcement, JBS began to market its net-zero pledge to consumers and investors. JBS claimed in a 2021 Earth Day ad: “Bacon, chicken wings and steak with net zero Emissions. It’s Possible.” The company raised $1 billion from investors through sustainability linked bonds, grounded in the company’s net-zero pledge.
In 2022, IATP, represented by Earthjustice and Richman Law and Policy, challenged JBS’ net-zero advertising before the Better Business Bureau’s National Advertising Division (NAD), charging that the company’s climate claims were misleading to consumers. In January 2023, the NAD decided in IATP’s favor, and in June 2023, the National Advertising Review Board rejected JBS’ appeal, calling on the company to discontinue its net-zero claims.
Others have also raised questions about JBS’ net-zero pledge. Last year, Mighty Earth lodged a submission to the Securities and Exchange Commission (SEC) contesting JBS’ climate claims included in the company’s Initial Public Offering (IPO) prospectus. In January, a group of U.S. Senators wrote to the SEC calling for tougher scrutiny of JBS’ proposed IPO given the company’s track record, including backtracking on previous pledges to stop deforestation.
The lawsuit by the New York AG is part of growing action by regulators around the world to set new rules and guidelines to prevent corporate greenwashing, as well as provide consumers and investors with more information about how companies are responding to climate risk and planning to reduce emissions.
This spring, the SEC is expected to finalize rules requiring climate risk and emissions reporting for public companies. Last year, California passed new rules on climate emissions reporting that included large public and private companies doing business in the state. The Federal Trade Commission is currently updating its Green Guides on corporate environmental marketing, which will include updated guidance on green claims. Europe’s Green Claims Directive will set similar guidelines for corporate claims on climate change, and the EU’s Corporate Sustainability Report Directive has toughened reporting requirements on climate risk and emissions for companies operating in Europe. Europe’s Deforestation Law limits trade in commodities, such as beef and soy, that are linked to deforestation.
The landscape is changing rapidly for corporate climate claims. Ending greenwashing, providing greater transparency and more accountability for emission reductions will benefit food companies taking meaningful climate action. Public programs geared towards farmers, such as the U.S. Farm Bill and the EU’s Common Agriculture Policy, should undergo reforms that support fair incomes, climate resilience and lower emissions as part of a just transition away from the high-emitting factory farm systems favored by companies like JBS.
