The Council on Ethics recommends that Marfrig Global Foods SA be placed under observation due to the risk that the company is contributing to severe environmental damage.
Marfrig is one of Brazil’s largest producers of beef. The company purchases beef cattle, which it slaughters and processes for sale in the national and international market. Marfrig buys cattle in several regions, the most important of which are the Amazon and the Cerrado. Cattle ranching is the main reason for the loss of forest cover and biodiversity in these regions and is linked to conversion of forest to pastureland.
Deforestation occurs on properties in Marfrig’s supply chain. The Council on Ethics considers that Marfrig’s supplier monitoring has not been sufficient to avoid deforestation. Moreover, the monitoring system has mainly targeted the Amazon. Suppliers from other regions with a high rate of deforestation have barely been checked.
In 2020, Marfrig announced that the company would eliminate deforestation throughout its entire supply chain and in all regions by 2030. Even though the Council finds that the timeframe for when this will be achieved is too long and it is unclear how Marfrig’s system will work in practice, the Council considers that these initiatives can reduce the risk of Marfrig contributing to deforestation in the future. The Council therefore recommends placing Marfrig under observation.
The Council submitted its recommendation to place Marfrig Global Foods SA under observation on 30 September 2021. On 21 December 2021, Norges Bank published its decision to follow the Council on Ethics recommendation.