Europe Equity Research 22 January 2021 Grow, Forest, Grow A toolkit for investors concerned about deforestation – Focus on Brazil and the Protein industry This reports explores the sustainability impacts and the financial risks related ESG & Sustainability research to deforestation and forest degradation, using Brazil as our key example. Based AC on the takeaways from JPM LatAm ESG “Protein” seminars, we discuss the key Jean-Xavier Hecker (33-1) 4015 4472 commitments taken by JBS, Marfrig, Minerva and BRF, and outline where we
[email protected] see areas for improvement and opportunities related to regenerative agriculture. J.P. Morgan Securities plc Deforestation is an emerging theme for ESG investors. To date, investors Hugo Dubourg that include deforestation in their ESG approach are mostly driven by the (33-1) 4015 4471
[email protected] "sustainable materiality” of the theme’ (climate & biodiversity). As ESG AUMs J.P. Morgan Securities plc keep growing, we believe that a company which has significant exposure to FRCs and ignores related risks could suffer from a proportionate discount in LatAm Food & Beverages and Agribusiness valuation. We see this as stemming from several different ESG strategies: AC 1) Discount; 2) Outflows and 3) Missed opportunities. Over the long term, Lucas Ferreira these strategies are likely to impact valuations, resulting in a material discount (55-11) 4950-3629
[email protected] vs. a company’s historical average. Bloomberg JPMA FERREIRA <GO> Banco J.P. Morgan S.A. For countries such as Brazil, which holds 12% of the world’s total forests, deforestation represents a major issue, which has gained notoriety since 2019.