It is not news that ESG has become a battleground issue, with prominent ESG efforts now facing an anti-ESG backlash. And while in the recent past institutional investors and advocacy groups tried to push publicly traded companies to establish their ESG credentials, the ESG-related litigation (such as it has been, so far at least) has primarily been filed not against ESG laggards, but rather against companies that have tried to promote their sustainability efforts and other climate-friendly measures.

In the latest example of litigation against a company in connection with its efforts to promote its ESG qualifications, the New York Attorney General, Letitia James has filed a fraud lawsuit in New York state court against the U.S. subsidiary of JBS, a Brazil-based meat and poultry producer, alleging that its sustainability claims and its publicized goal of achieving net zero greenhouse gas emissions by 2040 misled consumers.  A copy of the New York Attorney General’s February 28, 2024, press release about the lawsuit can be found here. The NYAG’s February 28, 2024, complaint can be found here.


JBS USA Food Company and JBS USA Food Company Holdings are U.S. operations of the Sao Paulo, Brazil based JBS, S.A. (referred to collectively in the complaint as the JBS Group). The U.S. operations were built in part through acquisitions over the past two decades, including of Swift Foods and a majority stake in the U.S.’s second-largest poultry producer, Pilgrim’s Pride. The JBS Group is the world’s largest beef producer, and its U.S. operations are responsible for 50% of the group’s revenue.

Beginning as early as 2015, the complaint alleges, the JBS Group has pursued to a program to publicize the company’s supposed sustainability efforts. The complaint alleges that this effort reflects the company’s recognition, as evidenced by the company’s own public statements, that consumers attach value to companies’ environmental reputations and that consumers are even willing to pay more for products of companies they perceive as environmentally friendly.

As part of this campaign, the company has made public statements and paid for advertisements that make several sustainability claims on behalf of the company. The NYAG alleges that the company has publicly made a commitment to reduce its greenhouse gases and to achieve net zero carbon emissions by 2040.

However, the NYAG alleges, the company has “no viable commitment” to meet its Net Zero by 2040 commitment. The NYAG alleges further that the JBS Group made the Net Zero commitment “without having calculated the vast majority of greenhouse emissions from its supply chain,” which includes the fact that the company’s emissions are linked to deforestation in the Amazon basin.

The NYAG also alleges that even if the JBS Group had a net zero plan, JBS, whose “estimated greenhouse gases” were in 2021 greater than that of the entire country of Ireland, “could not feasibly meet its pledge because there are no proven agricultural practices to reduce its greenhouse gases to zero at the JBS Group’s current scale.”

In a recent proceeding of the National Advertising Division (NAD) of the Better Business Bureau, the NYAG alleges, the NAD allegedly determined that the JBS Group’s net zero claims were “unsubstantiated and misleading to consumers” and “recommended that the JBS Group stop making the claim.” The NAD’s appellate body allegedly upheld the decision.

The Lawsuit

On February 28, 2024, the NYAG filed a lawsuit in the New York (New York County) Supreme Court against JBS USA Food Company and JBS USA Food Company Holdings. The complaint alleges that the company “repeatedly and persistently” made “unsubstantiated and misleading environmental marketing claims,” doing so “even after the NAD and the Review Board found such claims to be unsubstantiated” and recommended that the JBS Group stop making them.

The NYAG brought this action to enjoin JBS USA from violating New York’s consumer protection statutes, General Business Law Sections 349 and 350, and pursuant to Executive Law Section 63(12) to stop JBS’s “fraudulent and illegal environmental marketing practices.”

The NYAG also seeks an order awarding civil penalties for the alleged statutory violations; requiring disgorgement of all “profits and ill-gotten gains” realized by JBS’s violation of New York’s consumer protection statutes; and requiring an audit of JBS’s compliance with New York’s consumer protection statues.


Some may wonder if JBS has supposedly been engaging in these allegedly fraudulent practices since 2015, why the NYAG is just bringing these claims now. One could surmise that the NYAG only acted after the NAD proceedings and their appeal, in which it was found that the JBS Group was making “unsubstantiated and misleading” claims to consumers. One could also surmise that the timing has something to do with the JBS Group’s plan to complete an IPO on the NYSE. (The JBS Group, whose ADRs are already traded in the U.S., initially filed for an IPO in 2023, but because of market conditions the planned offering was postponed until this year.) Indeed, the Wall Street Journal expressly noted that the lawsuit “comes as environmentalists have joined to oppose the company’s planned listing on the New York Stock Exchange.”

It might also be questioned about whether or not as a general matter sustainability claims can actually amount to consumer fraud. The NYAG anticipated this concern by arguing that the JBS Group launched its sustainability claims in part because of its publicly stated awareness that consumers will not only prefer to choose the products of a company they perceive as environmentally friendly, they will even pay more for its product — thus, it will be argued, the incentive to defraud consumers about sustainability issues.

Moreover, the NYAG is not relying just on New York’s consumer protection statutes. She is also relying on New York’s Executive Law Section 63(12). If that law sounds familiar, it is because it is the same law on which the NYAG recently relied in pursuing her business fraud action against Donald Trump and the Trump Organization. The law gives the NYAG the power to seek to enjoin any person who engages “repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business.” In other words, the NYAG’s lawsuit is not only dependent on the supposed consumer fraud allegations. This is a fraud lawsuit of a particular kind – that is, a New York law fraud lawsuit.

It is worth highlighting the fact that this lawsuit, like so many of the prior ESG-related lawsuits, have involved allegations that the defendants engaged in so-called “greenwashing” – that is, a marketing claim that makes false or misleading claims about a company’s environmental efforts. There is now a long line of civil suits and SEC enforcement actions based on greenwashing allegations (as illustrated, here).  A greenwashing-type claim like, for example, this one, embodies the principle I have discussed numerous times on this blog, that is, that many or even most of the ESG-related lawsuits that have been filed so have not been filed against ESG laggards that are paying insufficient attention to ESG matters, but instead have been filed against companies that, for whatever reason, have tried to establish their ESG credential and to portray themselves as good ESG citizens (as discussed further, here).

The problems that have caught up many companies with respect to their claimed sustainability credentials have caused other companies to just go radio-silent on ESG related issues – a practice that commentators have referred to as “greenhushing,” about which refer here.

As is the case here, often the companies that wind up having problems find themselves hung up on the very aspirational goals or targets they set for themselves. Here, the company’s commitment to net zero emissions sounds like a worthy objective; the company might have been better served sticking to statements of what the company has done so far to reduce carbon emissions, or what specific steps the company has put in process to try to achieve reduced emissions, rather than setting lofty aspirational goals.

As I have said in the past when trying to point out the reality of ESG-related litigation so far, the reason these litigation characteristics matter is because without a recognition about what kind of lawsuits are actually being filed, the ESG-risk conversation can be focused on risks and concerns that are not just beside the point, but actually irrelevant.

This lawsuit has only just been filed and it remains to be seen how it will fare. I will say that I was struck reading this complaint by the fact that the company has not yet failed to meet the aspirational goals it has set. The NYAG might thing there is no way that the JBS Group can meet its Net Zero 2040 goal – but doesn’t it seem wildly premature now to try to ding the company for something that it will either do or fail to do 16 years from now?

The other thought I had about this lawsuit is that it is calculated to reach a particular audience – say, a certain kind of New York voter that is predisposed to think ill of meat producers, and their products, and even of the very practice of eating meat in general. This lawsuit wouldn’t appeal to a significant swath of the population in, say, Texas, or even here in Ohio where I am based, but it is straight from the East Side Manhattan Choir Hymnal in New York.

If the JBS Group sounds vaguely familiar, that is because JBS previously was the target of a bribery-related securities class action lawsuit in the U.S., as discussed here. (JBS has Level I ADRs that trade OTC in the U.S.). The case was one of a host of bribery-related securities suits filed several years ago against South and Central American companies. The JBS lawsuit ultimately settled – prior to a ruling on the defendants’ motion to dismiss – for $5.467 million.

The SEC is Watching ESG Disclosures, Too: In a February 23, 2024 speech at an Ohio State Law Journal symposium, SEC Enforcement Director Gurbir S. Grewal emphasized that the SEC is scrutinizing companies’ ESG disclosures with a particular concern whether the disclosures are truthful.

Grewal said “ESG issues are increasingly material to investors. It is therefore crucial that when companies speak about the host of issues that may fall under the rubric of ESG – whether climate, social, corporate governance or others – they do so in a way that’s not materially false or misleading.” Grewal raised concerns that investor interest in ESG may tempt issuers to make false statements about their ESG compliance. Grewal said the SEC will be looking out for misleading disclosures on ESG matters and detailed for the audience a number of SEC enforcement actions showing the SEC’s focus on the truthfulness of ESG-related claims.