JBS, the world’s biggest meatpacker, is being sued by the state of New York for allegedly misleading consumers over its environmental impact, increasing scrutiny of the company as it prepares to list shares in the US stock market.

Letitia James, the attorney general of New York State, filed a lawsuit accusing the US arm of JBS of greenwashing and of making misleading claims to attract climate-conscious customers, with pledges to curb deforestation and cut its greenhouse gas emissions by 30% by 2030.

In particular, James takes issue with the company’s pledge to reach net zero emissions by 2040, saying that when making the claim, “JBS Group and JBS USA had not calculated the company’s total greenhouse gas emissions, and therefore had no way of knowing whether they could successfully reduce those emissions to net zero by 2040,” according to a statement issued Wednesday.

The release added that the net zero target “is not feasible given the current scope of the JBS group’s business operations and its plans to significantly increase beef production.” The lawsuit seeks to stop JBS making the net zero pledge in its advertising, the statement said.

The Brazilian firm said in a statement it disagrees with the attorney general’s decision, adding: “JBS will continue to partner with farmers, ranchers and our food system partners around the world to help feed a growing population while using fewer resources and reducing agriculture’s environmental impact. Our belief that American agriculture can help sustainably feed the world is undeterred.”

Investors appeared unfazed by the New York lawsuit, with the company’s shares rising 2.7% on the B3 exchange in São Paulo on Thursday while the Ibovespa index fell 0.9%.

JBS said in July last year it aims to sell common shares on the New York Stock Exchange and Brazil Depository Receipts on B3. Bloomberg reported earlier this month that the listing could by delayed until the second half of 2024.

‘CLIMATE RISK’

Its plan for an initial public offering in the US has attracted the ire of environmental campaigners, with Washington DC-based Mighty Earth calling it the “biggest climate risk IPO listing in history.” The non-profit alleges the company underestimated its climate impact in the prospectus filed with the US Securities and Exchange Commission.

In June last year, the National Advertising Review Board, the appellate body of US non profit BBB National Programs, called on JBS to stop making certain claims in relation to the net zero pledge.

The company printed $2.5 billion of global bonds last September in one of 2023’s biggest placements by a Latin American corporate issuer.