By Dieter Holger and Paulo Trevisani

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 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, deforestation is largely forbidden and 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 said in an emailed response to questions that it wasn't given the opportunity to demonstrate to Nordea "its total commitment to the transparency of its relationships and the sustainability of its operations."

"JBS maintains a consistent compliance program," it said, adding that it is "totally committed to eradicating deforestation throughout its supply chain."

Brazil's powerful agroindustry has pressured the government of President Jair Bolsonaro to fight deforestation more efficiently and polish the country's deteriorating environmental credentials in coveted export markets and among investors.

The government has responded that it's committed to protecting the Amazon, but wants to do so by fostering, instead of pushing back, private-sector activity in the region.

Environmental prosecutor Daniel Azeredo said Nordea's is the first reaction of this kind to mounting accusations of Brazilian food exporters not protecting the country's rainforest.

"We will only reduce deforestation if we're able to completely track" cattle rearing in the Amazon, he said.

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.

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

Write to Paulo Trevisani at paulo.trevisani@wsj.com; @ptrevisani

 

(END) Dow Jones Newswires

July 28, 2020 13:19 ET (17:19 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
JBS ON (BOV:JBSS3)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024 Haga Click aquí para más Gráficas JBS ON.
JBS ON (BOV:JBSS3)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024 Haga Click aquí para más Gráficas JBS ON.