In March 2021, JBS announced its net zero commitment by 2040 for scopes 1, 2 and 3 globally, which includes methane emissions. The company is working with expert, internationally-recognized consultants to complete our global scope 3 emissions calculation, according to SBTi and GHG Protocol rules. We are on track to submit this in 2023, within the standard SBTi timeframe.
The JBS Sustainability Report, published annually, provides the most complete information regarding our scope 3 emissions: http://oldjbs.adttemp.com.br/storage/2022/08/-sustainability-in-report- jbs-2021.pdf (page 9 to 16). A breakdown of what is currently included, such as Enteric Fermentation – Category 1, is on page 65, and our approach to address scope 3 emissions is on page 64. The JBS scope 3 calculation is global and includes 10 applicable categories as outlined in our sustainability report. Land use change was not included in the latest report as this will follow the new SBTi FLAG methodology, which was only recently launched in September 2022.
For its scopes 1 and 2 emissions intensity calculations, the company uses emissions / ton produced. We report our emissions following the requirements of regulatory authorities and in accordance with standard market practices. Methane is included in our scope 3 calculations, and we already have multiple methane reduction strategies underway including animal feed additives and biogas capture that are yielding positive results. JBS follows the global commitment on methane, one of the initiatives at COP26.
BS S.A. is working to present interim 2030 targets next year. In accordance with our net zero commitment and SBTi methodology, we are on track to submit our action plan and goals within the two-year SBTi timeline – by June 2023. Other subsidiary companies, including Pilgrim’s and Moy Park, already submitted interim targets in 2021. This will include a detailed roadmap consistent with SBTi methodology to limit the increase in global temperature to 1.5°C.
As a member of the Agriculture Sector Roadmap to 1.5°C, announced during COP27 last November by 14 food and commodities companies, in 2024 JBS will disclose emissions from land use change. Until then, GHG emissions inventories must be developed according to GHG Protocol Land Sector and Removals Guidance.
Regarding JBS Sustainability-Linked Bonds (SLBs), as stated in the bond framework, the company’s “initial commitment to scope 1 and scope 2 emissions is not a reflection of the importance of scope 3 in our broader fight against climate change but an acknowledgment that we must start with elements over which we have direct control and that have robust and trusted measurement guidelines.”
At the time the bonds were issued, it was not possible to include scope 3 because of calculation limitations, as the Second Party Opinion states: “While JBS acknowledges the importance of measuring and ultimately reducing scope 3 emissions, a widely-accepted method for measuring scope 3 emissions does not currently exist for its industry.”
The bond scopes are explicitly and transparently limited to scope 1 and 2 reductions, which is clearly outlined in the frameworks and was directly communicated to all potential investors. “ISS ESG finds that the KPI selected by the issuer is consistent with the overall company’s sustainability strategy.”
These bonds are consistent with our global sustainability strategy but not intended to fund the entire decarbonization process as part of our net zero commitment. Our strategy goes far beyond the debt market. We have numerous partnerships in place with academic institutions, feed additive research to reduce methane emissions, a blockchain platform to trace cattle supply chain, and 17 Green Offices to support good environmental practices on Brazilian farms, just to name a few initiatives to date.
As noted in the Second Party Opinion, “[JBS’s] target is set in a clear timeline, is benchmarkable and supported by credible strategy and action plan.” It also states that the “framework is in line with the Sustainability-Linked Bond Principles, as administered by the International Capital Market Association.” In context, the Second Party Opinion fairly discusses the offering and concludes that, while the objective is ambitious, it is not dissimilar from other companies and governments around the world.
These documents were all made publicly available on our Investor Relations website in June 2021, when the bond was issued.
Regarding the assumption that JBS scope 3 emissions are increasing, based on a IATP study, JBS has already clarified the serious methodological errors and gross data deviations in the calculations of the report jointly published with Mighty Earth last April.
More information can be found on this work by WayCarbon, and in an analysis of the Global Food and Agribusiness Network. Additionally, a letter from JBS summarizes our perspective.