British-based banks and finance houses have provided more than $2bn (£1.5bn) in financial backing in recent years to Brazilian beef companies which have been linked to Amazon deforestation, according to new research. Thousands of hectares of Amazon are being felled every year to graze cattle and provide meat for world markets. As well as providing financial backing for Minerva, Brazil’s second largest beef exporter, and Marfrig, its second largest meat processing company, UK-based financial institutions held tens of millions of dollars worth of shares in JBS, the world’s largest meat company.
All three meat companies have been linked to deforestation in their supply chains, though they say they are working to monitor their suppliers and mitigate risks. According to a joint investigation by the Guardian, Unearthed and the Bureau of Investigative Journalism, financial data between January 2013 and May 2019 shows that HSBC underwrote $1.1bn of bonds for Marfrig and $917m for Minerva. They also held nearly $3m in JBS shares.
Schroders held $14m in Marfrig bonds and $12m in Minerva bonds, while Standard Life Aberdeen held $10m in Marfrig bonds and $3m in JBS shares. Prudential UK had $23m in JBS shares and $5m in Minerva bonds. The three meat companies say they are confident that the farms their slaughterhouses directly purchase cattle from are not involved in deforestation, but they also accept they cannot know the origin of some animals that have passed through other farms beforehand.
In response to the findings, a spokesperson for Aberdeen Standard Investments said: “There are definitely shortcomings in supply chain monitoring for the entire beef industry in Brazil, but these practices are improving across the industry and investor activism plays an important role in this development … At present, we remain invested but this may change depending on a number of factors.”
Schroders said it was in dialogue with both Minerva and Marfrig and that, “if we did not see these signs of progress, we would certainly consider changing our recommendations for these companies.”
Deutsche Bank said it did not finance activities where there is clear and known evidence on clearing of primary forests, areas of high conservation value or peat lands, illegal logging or uncontrolled and/or illegal use of fire. Crédit Agricole said it did not finance projects on deforested land with high biodiversity value.
Source: Guardian
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