By Dieter Holger

 

Nordea Asset Management dropped Brazilian meat giant JBS SA from all its funds this month over concerns stemming from the company's handling of deforestation, corruption charges and employee health and safety amid the coronavirus pandemic.

The Helsinki, Finland-based money manager made the decision "after a period of engagement with the company, where we did not feel that we were seeing the response that we were looking for," Eric Pedersen, head of responsible investments at Nordea Asset Management, told The Wall Street Journal on Tuesday.

Mr. Pedersen said that the investment firm, which has some 223 billion euros ($261.8 billion) under management, pulled around EUR40 million from JBS following a separate decision last year to not buy more into the company.

The move comes as JBS continues to face allegations of fueling deforestation by purchasing cattle from protected lands in the Amazon rainforest. In June, nonprofit Greenpeace said that JBS--along with other Brazilian meat producers--had bought cattle from a farm that sourced the animals from another ranch in a protected reserve in the Mato Grosso region.

Under Brazilian law, meatpackers must ensure that they slaughter cattle coming from ranches with a clean environmental record, but it is difficult for companies to guarantee there hasn't been so called "cattle laundering" where cows spend time in illegal pastures before moving to legal ones.

JBS didn't immediately respond to a request for comment.

Mr. Pedersen said the decision to exclude JBS is significant because it changes the holdings of all of the firm's funds instead of just those dedicated to sustainability.

"While our specifically [environmental, social and governance]-focused funds would in any case avoid companies with these types of exposure, this move is part of raising the bar for our remaining funds, so that our wider client base can remain comfortable with the level of sustainability risk in their investments," he said, adding that specific ESG portfolios currently make up around 30% of the firm's managed investments.

 

--Paulo Trevisani contributed to this article.

 

Write to Dieter Holger at dieter.holger@wsj.com; @dieterholger

 

(END) Dow Jones Newswires

July 28, 2020 08:21 ET (12:21 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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