Environmental, social and corporate governance in meat production chain

Taciano Custodio ESG Minerva

“We recognize agriculture as an engine of social development”

Taciano Custódio has worked for 14 years in sustainable management, and in the management of the supply chain to help delink agribusiness from biodiversity loss and climate change.
Custódio holds a degree in Biology from the Federal University of Goiás and is Global Director of Sustainability at Minerva Foods.

Minerva Foods is a Brazilian company operating in the production and sale of fresh meat and meat goods, exports of live cattle and meat processing, with more than 18 thousand employees, and revenues of US$ 3.99 billion in 2020.

AgriBrasilis – What is Minerva’s role in the meat production chain?

Taciano Custódio – Minerva is a 29-year-old multinational meat processing company, founded in Barretos, São Paulo State. We are the largest beef exporter in the main and most competitive beef production platform in the world, South America.

We represent more than 15 thousand cattle ranchers, guiding the best practices in animal husbandry, technology, and sustainability in the occupation of the territory, to generate local development and profitability with access to higher added value markets.

We are present in 6 countries, 5 in South America – Argentina, Brazil, Colombia, Paraguay and Uruguay, and we recently started sheep and lamb operations in Australia.
We are focused on safe, high-quality production and high compliance on sustainability issues, which is one of our organizational and corporate values.

AgriBrasilis – What is the importance of ESG for agriculture?

Taciano Custódio – The term materializes and demarcates sustainability.
ESG is a recent acronym that has gained prominence in the financial market as a way to achieve sustainability. It means environmental concerns and social and governance responsibilities. The approach is not only important for the food industry and agribusiness, but also for the effect of developing different businesses in each country. Brazil and South America are a powerhouse in food production, and ESG clarifies this sector’s sphere of responsibility.

All of this is only possible when working with great responsibility, whether on the challenges of climate change, or on the protection of ecosystems, that are the basis of many production chains, including meat.
One of the most important paths and objectives of ESG agenda is exactly how to drive sustainability for the production chain, connected in the field. It is about the ranche farmer achieving an increasingly efficient occupation of the land (with technology and improvement in production indicators).

Thus, there is a virtuous circle throughout the entire chain, from the local development of the cattle rancher to the final consumer.

AgriBrasilis – What are the company’s advances in relation to ESG practices and what is the investment in the coming years?

Taciano Custódio – The company has had sustainability in its strategy for a long time. We are the only company in Latin America that has the World Bank in the IFC branch (Private Investment of the World Bank) as a shareholder.

Evidence of our efforts is the audit of the Federal Public Ministry, the main and safest process for verifying the chain against deforestation, where we maintain the best results among large companies.

In April this year, we announced Minerva’s commitment to become a carbon neutral company by 2035, that is, zero net emissions. The target is 15 years before the Paris agreement1.

Among the practices is the fight against illegal deforestation, which is one of the major sources of greenhouse gas emissions. The company is the first in Brazil with 100% of supplier farms monitored geographically in all regions, not only in the Amazon region, but also in the Cerrado (Brazilian Savanah), Atlantic Forest, Pantanal, through a geographic analysis system. This is done purchase by purchase, every day, pixel by pixel, to ensure that our products are not related to illegal deforestation, areas embargoed by IBAMA², indigenous areas, environmental protection and slave labor.

We are also expanding geographic monitoring systems outside of Brazil, Paraguay and Colombia.

To reach 2035 with zero net emissions, we focus on industry, applying technology and investing to improve the environmental performance of factories, emissions from effluent treatment, and boiler emissions. Another focus is the energy matrix, in which Minerva was the first company in Latin America to become carbon neutral in 2020, through the mitigation (offset) of emissions from energy in all countries and operations.

The main challenges going forward are deforestation and land use conversion and rumination, eructation, which is the natural enteric fermentation activity of cattle.

Our commitment is to have a chain free of illegal deforestation by 2030 in all countries, and for that we will extend the same commitment we have in Brazil to all countries. By the end of 2021 we will have 100% of purchases monitored in Paraguay. This August, we have already reached 89%. We will also have the operational geographic monitoring system in Colombia and Uruguay until 2023 and 2025, respectively, and until 2030 in other countries. The idea is to disconnect the production chain from the possibility of illegal deforestation.

Regarding animal emissions, it is necessary to improve agricultural activity with techniques of integration and intensification, confinement, confinement to pasture, semi-confinement, nutrition, and reduction of the slaughter age, enabling the cattle rancher to be profitable through his business while occupying the same territory more efficiently, producing more in the same area.

Agribusiness suffers widespread criticism about sustainability. Minerva as an industry has no opportunity to sequester carbon. We are emitters; we have boilers, forklifts, transportation and factories. But the cattle ranchers have the opportunity to be a carbon sequestrant through good practices, both protecting the carbon present in native vegetation, and in soil conservation to reduce degradation, in reducing the slaughter age, in pasture rotation to intensify confinement. All of this is a set that allows the farm to look at the carbon balance not only from the perspective of emissions, but also from the perspective of sequestration. So how much is carbon sequestered by doing a degraded area recovery? How much carbon is recovered from having a pasture of high vigor and excellence, where there is above-ground and below-ground biomass in the roots of the pasture? Here comes the partnership with EMBRAPA³, that performs the measurement, using primary farm data to quantify carbon balance.

AgriBrasilis – How is the partnerships for certification and carbon trading?

Taciano Custódio – Looking at animal husbandry, we have the Low Carbon Emission Program. We work in partnership with EMBRAPA (Brazil), CIAT (Colombia), INIA (Uruguay), IMAFLORA as the certifying agency, SANTOSLAB with remote sensing technology, BIOFILICA from Ambipar group, who is the largest carbon credit negotiator in Brazil.

Our objective is to improve and increase farmers’ capacity to apply good production practices to sequestered carbon, generating this benefit of greater yield, efficiency, resilience and protection of biodiversity.

We’re running the primary data from about 80 ranches across all countries. Minerva’s cattle ranchers have the high quality demanded by the international standard, that is, precocity, age of the animal, minimum weight, maximum pH of the meat, gender, well-being in non-castrated males. It is a technical set of qualities that the cattle rancher seeks to price his product. Our idea with the Low Carbon Emission Project in the chain is precisely to train this ranch farmer so that, through the use of these techniques of sequestration and reduction of emissions, he starts to analyze the farm, making the carbon balance of his property, with the support of research agencies, generating carbon credits. These take time.

We have been working with EMBRAPA since 2020, looking at these cattle ranchers in a pilot project to promote this credit generation program so that we have 50% of our cattle ranchers suppliers under the low emission program by 2030. This is because, if it is within the program, it will generate credits, and we want to buy these credits and add value to this ranch farmer through the animal husbandry and credit, offsetting Minerva’s emissions. It is a very virtuous and innovative circle, where the industry, together with these partners, promote good practices that sequester carbon and the industry itself buys this carbon credit to offset what it is emitting.

AgriBrasilis – The company is listed in the 16th portfolio of the Corporate Sustainability Index (ISE B3). What does this mean for investors?

Taciano Custódio – The integration into the ISE portfolio for the company was a reflection of the practices we have adopted for a long time. 2013 was an important milestone with the entry of the IFC (International Finance Corporation), the World Bank’s private investment branch, as a shareholder. They are at the forefront of performance and sustainability indicators. ISE is based on the IFC performance standards.

I believe ISE reflects Minerva’s practice, which is backed by results.

Regarding the capital market, ISE shows its commitment to delivering measurable and transparent results, taking on the challenge of all the links in the livestock chain in South America, with the objective of leveraging sustainability practices in the production chain.

In short, ISE reflects what Minerva delivers. For the market, this continuity in delivering results is assured. There is a lot of trust in the cattle rancher, in the adoption of technologies, in opening new markets, and these are what will guide an increasingly sustainable occupation of the land and local development.

Sometimes we have an approach that imposes the environmental pillar above the social one, but we should remember that the local development of an activity present in all Brazilian municipalities has a lot of potential for change in the regional context, improving quality of life. We have a commercial relationship with 15 thousand farmers per year, on average.

In a way, what we are doing by promoting good practices, purchasing animals and exporting to more priced markets or supplying domestic markets is to create this direct pipeline of investment in the cattle rancher. It is a way to support financial development through the production of that cattle farmer. The more profitable it is, the more technology it will be able to apply in the production system, and the more local development it generates. This cycle goes far beyond the environmental side with all the positive externalities, but also the social side, which is even more important when it refers to South America, made up of developing countries with huge social challenges.

We recognize agriculture as an engine of social development.

1 The Paris Agreement is a legally binding international treaty on climate change, adopted by nearly 200 countries in the French capital on 12 December 2015.
2 Brazilian Institute for the Environment and Renewable Natural Resources
3 Brazilian Agricultural Research Corporation