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Feb 20, 2024

ESG scrutiny: Mighty Earth campaign group shares approach to weeding out greenwashing

Global climate group in IPO spotlight with campaign against JBS listing talks ‘perfect storms’ and CEO letter campaigns

Public companies are under increasing scrutiny over their ESG claims. Around the world, investors, regulators, politicians, campaign groups, protesters and a host of sometimes unlikely stakeholders are voicing their concerns over the climate crisis, human rights, supply-chain management and more.

As the world passes a stark milestone – with global warming exceeding 1.5ºC across an entire year for the first time, according to the EU’s climate service – Governance Intelligence sister publication IR Magazine hears from Glenn Hurowitz, CEO of Mighty Earth, about the tools the global organization uses to scrutinize the ESG claims made by listed companies.

Founded in 2016 to target the palm oil industry, Mighty Earth has increasingly been in the financial press as it campaigns to halt a planned NYSE IPO by Brazilian meat giant JBS. Its actions have resulted in an unlikely alliance of 15 cross-party senators and 13 UK MPs writing to the SEC to voice their concerns about the planned listing.

In September 2023, a spokesperson for JBS told IR Magazine that the firm was ‘confident our dual-listing proposal will create opportunities for our company, team members, shared communities and all stakeholders. The proposal accelerates our efforts to enhance corporate governance and transparency through adherence to SEC standards and the formation of a majority independent board.’

The company did not respond to a follow-up request for comment in February 2024.

An eye on reporting platforms

Hurowitz says Mighty Earth employs a ‘perfect storm’ campaign approach to examine how a company is performing ‘and whether it is actually doing what it has pledged to do in terms of ESG’.

This involves a range of tools and strategies, he explains, ‘from satellite monitoring to pinpoint deforestation in supply chains to scrutinizing ESG monitoring platforms such as CDP and the Science Based Targets Initiative to determine whether companies are ‘greenwashing’ their climate and ESG credentials.’ 

The organization’s investigations – ranging from Brazil to Japan – have revealed alleged supply-chain management flaws, says Hurowitz, in particular at a number of commodity companies and soy traders, that he says result in ‘deforestation seeping in through direct and indirect suppliers’.

‘We recognize the same problems coming up again and again across all the commodities we work on – from beef and soy to cocoa and palm oil – and engage with industry to present viable and sustainable practices to replace destructive ones,’ he says.

Mighty Earth wants greater transparency around supply chains – both direct and indirect – and for companies to fully disclose Scope 3 emissions, something Hurowitz claims make up the ‘bulk of emissions’ at big agricultural firms, for example.  

So where do big campaigns against green bonds or IPO filings come into play? ‘We use our rapid-response deforestation satellite monitoring system to file grievances with companies and we use legal mechanisms and regulatory challenges to highlight flaws in companies’ operating models and systems,’ Hurowitz says. ‘We have uncovered numerous flaws in sustainability-linked bonds in both the meat and rubber industries.

‘Our ‘perfect storm’ approach is one where we both engage with companies – writing letters to CEOs and having face-to-face meetings with them – while at the same time running public-facing campaigns on individual companies. We exert pressure through the media, too, to push companies to exercise their power as a force for good. With JBS, for example, we have lodged two submissions with the SEC, calling for both an investigation and a halt to JBS’ plans to list on the NYSE.’

The organization uses both specialist legal teams and global networks of campaign groups to prepare submissions and engages with ESG investors to flag what it sees as risks associated with investing in certain firms, particularly big agricultural companies, which Hurowitz describes as ‘falling way short of their ESG pledges’. 

Glenn Hurowitz
Glenn Hurowitz

From forest to savanna

Some of the things Mighty Earth calls for clearly go against the business models of the firms it is targeting. For example, Hurowitz talks about Brazil as being the organization’s main focus at present, calling for companies such as JBS to ‘ultimately reduce herd sizes to support moves to eat less meat, which is what the science is telling us must happen if we’re to stand any chance of staying within 1.5ºC of global heating’.  

This is also an area where Hurowitz says a ‘self-reporting’ regime is an issue. At present, he describes the data on offer – the number of cattle slaughtered each year, for example – as ‘incomplete and all self-reported’. This makes analyzing the true scale of impact ‘very difficult, if not impossible’.

This is where Mighty Earth puts its efforts into lobbying around legislation. The new EU Deforestation Regulation, which applies to seven key forest-risk commodities – including cattle, soy, cocoa and palm oil – is one example. ‘[This regulation] currently covers only tropical forests, but we’re campaigning with our coalition partners to push for its scope to be extended to cover ‘other wooded lands’, such as the Cerrado savanna, Brazil’s most threatened biome,’ explains Hurowitz. 

‘Very close to being deforestation-free’

Talking about companies it sees as some of the ‘biggest emitters’ – Hurowitz names JBS again, as well as US food corporation Cargill and international agribusiness Bunge – Mighty Earth urges them to focus on their supply chains, criticizing these firms for what it says are deforestation-linked activities.

Cargill did not respond to a request for comment. Bunge tells IR Magazine that its ‘commitment to be free of deforestation and native vegetation conversion in value chains by 2025 is a central part of the company’s business strategy and planning’.

A spokesperson for the Missouri-headquartered firm continues: ‘Bunge does not source soy from illegally deforested areas and has maintained strict control over socio-environmental criteria in our operations. ‘We use cutting-edge satellite technology to monitor priority areas in South America – more than 16,000 farms, covering more than 20 mn hectares. As a result of our efforts, more than 97 percent of our soybean volumes from Brazil are deforestation and conversion-free.

‘This shows that we are very close to reaching our goal of zero deforestation in 2025. Our monitoring is capable of identifying changes in land use and soy planting on each of the farms we source from and captures any new cleared lands in the monitored regions.’

Garnet Roach

Garnet Roach joined IR Magazine in October 2012, working on both the editorial and research sides of the publication. Prior to entering the world of investor relations, her freelance career covered a broad range of subjects, from technology to...

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