“They could say, ‘Our goal is to literally destroy the planet,’” Ann Lipton, a former securities litigator who now teaches business law at Tulane University, said of JBS. “As long as that was accurate and complete, the securities laws have nothing to say about it.”

Environmentalists acknowledge the SEC’s powers are limited, but they say the agency should act because JBS isn’t telling the full story about the financial risks posed by its plan, announced last July. They argue the deal would supercharge deforestation in Brazil and give JBS’s controlling family virtually unchecked power over the company, putting investors and the planet at risk.

In a statement, JBS spokesperson Nikki Richardson emphasized the company’s “commitment to a more sustainable future” and said it looks forward to working more closely with nongovernmental organizations and other interested parties “during this next phase in the company’s evolution.”

She also said JBS’s listing proposal would create opportunities for “all stakeholders” and that its disclosures adhere “to the standards of the Securities and Exchange Commission.”

The SEC declined to comment.

The company’s move came after Brazilian President Luiz Inácio Lula da Silva was elected in part on a vow to stop net deforestation in the Amazon rainforest by the end of the decade, as part of his effort to recast the country as a
global climate leader.

Currently listed on the Brazil stock market, JBS has been accused of
buying cattle raised illegally in protected areas of the Amazon, of purportedly
bribing Brazilian government officials —
including Lula during his first stint as president more than a decade ago — and been hit with allegations of
beef price fixing. In recent years, those alleged practices have cost the company hundreds of millions of dollars in fines and settlements in the U.S. and Brazil.

JBS was founded in 1953 by José Batista Sobrinho, and its name is derived from his initials. Sobrinho’s sons now run the company, which began as a small butcher shop outside of Brazil’s capital Brasília and expanded internationally with the help of the national development bank.

The company operates in 15 countries and employs over 240,000 people worldwide. In 2022, it brought in nearly $75 billion in revenue — more than the food businesses of Nestle, PepsiCo and Kraft Heinz. Environmental groups estimate that JBS’s carbon footprint is larger than some Western European nations.

Growing chorus of opposition

Four members of Senate leadership — Sens. Cory Booker (D-N.J.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and John Barrasso (R-Wyo.) — were among 15 lawmakers who earlier this month called on the SEC “to protect the integrity of U.S. capital markets and the legal rights of U.S. investors by exposing the risks that JBS poses to potential shareholders.”

The
senators’ letter highlighted JBS’s alleged “track record of corruption, human rights abuses, monopolization of the meatpacking market, as well as environmental risks.” Republican Sens. Marco Rubio of Florida and Josh Hawley of Missouri also signed the letter.

In December, 11 current and former members of the U.K. parliament from across the political spectrum sent a similar message to the agency: “We implore you to reject the JBS IPO application and send a clear message that the United States stands firm in its commitment to combating climate change,” they wrote of the company’s planned initial public offering.

A month earlier, Ban the Batistas, an opaque organization run by a consulting firm executive, emerged to oppose JBS’s bid to join the New York Stock Exchange. The group’s name is a reference to the company’s largest shareholders, the brothers Joesley and Wesley Batista, whose hold over JBS would be strengthened by the dual class stock structure that effectively gives the family 85 percent of the voting power.

“The Batista Brothers’ future depends on a JBS U.S. IPO that, if allowed to proceed, would capture U.S. dollars, drive farmers and ranchers out of business, and enable JBS to dominate the American market,” Kim Spell, the executive director of Ban the Batistas, said in a statement
announcing the formation of the group in November 2023. Spell is senior vice president at Actum and a veteran political operative who previously worked for former New York City Mayor Michael Bloomberg, former Vice President Al Gore and other national Democrats.

Ban the Batistas has spent at least $10,000 to lobby Congress on “IPO disclosure requirements,” “regulation of foreign owned companies” and “anticompetitive conduct in the meat industry,” according to a
disclosure filing. Spell declined to say who is funding the group.

Environmental and human rights organizations were among the first groups to publicly raise concerns about JBS’s planned listing. In September 2023, Global Witness, Greenpeace, Mighty Earth and 17 other advocacy groups signed off on a
briefing paper that warned “the global financial community about the significant risk to the climate, people, and investors associated with JBS and its operations.”

How much disclosure is enough?

JBS’s filings with the SEC have touched on many of the potential risks cited by lawmakers and environmentalists, such as the possibility that the deal could threaten forests and enable impropriety by the Batistas.

“The raising of cattle and other livestock is at times associated with deforestation, invasion of indigenous lands and protected areas and other environmental and human rights concerns,” the company said in a 384-page
prospectus for investors.

“We may not be able to ensure that our raw material suppliers are in compliance with all applicable environmental and labor laws and regulations, which could adversely affect our business, financial condition and results of operations,” JBS said in the July filing. “We could also face increased costs related to defending and resolving legal claims and other litigation related to climate change and the alleged impact of our operations on climate change, which may also impact our image.”

The company also acknowledged the Batistas’ previous involvement in bribery schemes and warned that “no assurance can be given that new and improved policies, practices and personnel will be effective to detect or prevent illicit activities in all cases.”

Those disclosures, however, don’t adequately describe the environmental and shareholder harms that the deal would produce, environmentalists argue.

“You can’t simply observe — in a plain-vanilla way — that raising beef can contribute to deforestation when your company is actively, knowingly, taking illegally deforested beef into its supply chain every day and has been doing so for years and lying about it to the investing public,” said Kevin Galbraith, a securities lawyer representing the group Mighty Earth.

“The idea that they can simply throw into a registration statement that they’re not certain that their policies can effectively control this criminal family” is insufficient or worse, he said. “What they have done here is restructure the company so that the Batistas have even more control.”

Wall Street shrugs

So far, the torrent of opposition to the deal has done little to dent investors’ appetite for the meat company. Since JBS announced its U.S. plans, the company’s share price has increased 30 percent as of the close of trading Friday.

If lawmakers are concerned about the JBS deal and the potential for others like it, they could grant the SEC more authority to consider things like a company’s compliance history or the environmental implications of its business plans, said Jill Fisch, a business professor at the University of Pennsylvania Law School.

“Congress has the power to change the scope of the SEC’s mandate,” Fisch said. “But if Congress can’t get the votes to make a statutory change, you don’t really get the SEC to act by having a handful of people sign onto a letter.”

Experts said the best-case scenario for opponents of JBS is that a combination of intense regulatory scrutiny and bad press make the company reconsider its move to attract U.S. investors. There is some precedent for both.

Although the SEC doesn’t have the legal authority to block companies from issuing stock, it can strongly discourage them from doing so. For instance, the now-bankrupt real estate startup WeWork reportedly
abandoned its initial IPO plans under pressure from the SEC. Regulators are also believed to have successfully pushed back on the rental car company Hertz in 2021 when it
moved to issue new shares while in bankruptcy in order to cash in on the interest of so-called meme-stock investors.

Negative headlines can help derail IPO plans as well. In 2016, JBS considered listing in the U.S., where it derives most of its profits. But the company abandoned the deal after reports
linked the firm to a series of corruption and food safety scandals in Brazil, weakening demand for its new shares.

Environmentalists rejected the notion that they’re asking the Biden administration to take an unprecedented step, though they acknowledged that JBS is an exceptional case that could warrant new interpretations of regulatory power.

If the agency were to go further than it has in the past and seek to block JBS’s listing, “then that’s entirely justified by the fact that this, in fact, is one of the worst companies in the world,” said Mighty Earth’s Galbraith. “A fair resolution here treats them for who they are, not for who some prior company may have been.”

A version of this report first ran in E&E News’ Climatewire. Get access to more comprehensive and in-depth reporting on the energy transition, natural resources, climate change and more in E&E News.