Cameron Bruett, Chief Sustainability Officer for JBS USA Holdings, Inc, 2015 Pork Management Conference, June 16-19 in New Orleans.

1. 2015 Pork Management Conference
June 17, 2015
New Orleans
SUSTAINABILITY
What It Means To Our Company & How
It Could Impact You

2. “SUSTAINABILITY”
Everyone is talking about it, but what does it
mean?
: able to be used without being completely
used up or destroyed
: involving methods that do not completely
use up or destroy natural resources
: able to last or continue for a long time
: the capacity to endure

3. The Consumer’s View

4. 4
If We Don’t Define It…

5. “We’re inside of
corporate
boardrooms across the
country helping major
food retailers implement
policies to eliminate
gestation crates from
their supply chains.”
Paul Shapiro
Vice President
Farm Animal Protection
HSUS
People Who Don’t Consume
the Product Dictating Terms

6. 6
Perspective Matters

7. 7
There are over 313,000,000 people living in the
United States. Of that population, less than 1%
claim farming as an occupation (and about
2% actually live on farms).
You Sir, are
abusing animals &
destroying my
Planet…
Alistair, have
you ever even
been on a
farm?
Disconnect from Modern
Agriculture

8. 8
Increased Consumer
Acces s to “Information?”

9. 9
I want local and natural because it’s better for the environment and my health
(But there is no health benefit difference and those systems cannot be scaled
to meet the environmental and food security challenges of future generations)
I don’t want food from conventional, BIG AG because it’s bad for the environment and
my health
(But modern agriculture represents the most efficient, safest, affordable, seasonally-
independent and globally dispersed food supply in the history of mankind)
Consumer Confusion

10. 10
Small; But MIGHTY influence
48% under 35 years old
62% Female
46% Parents
Income WELL
above average
Concerns of the “Full
Stomach”

11. 11
Perspective Matters

12. 12
The Retailer’s Challenge
1. Agricultural
production
4.
Finishing farms
5. Slaughtering/
Processing
Product transportationLive animal transport
2. Feed
mill
3. Breeding 6. Packaging
7. Sales/
Distribution
8. Consumption/
Disposal

13. 13
Production intensity and emission intensity are inversely related though
some promote less intense systems as more “sustainable.”
There is no agreed upon definition for sustainability nor a
common methodology by which to measure sustainable
outcomes.
Excludes lean meat;
Allows for moderate alcohol consumption
U.S. Federal Dietary
Guidelines

14. • Global Income
• Global Population
• Global Consumption
3 Billion in Middle Class Growth
• Currently consume 1.5x Planet’s Available Resources
• By 2050,Will Need 70% More Food
• Consuming 3x the Planet’s Available Resources
2050 Global Trends

15. 15
Climatic Changes &
Impacts on Agriculture

16. 16
Water, Water & More Water

17. 17
How Do We Meet the
Challenge?

18. 18
From 1959 to 2009, U.S. Pork Producers Significantly Reduced
Their Environmental Impact
U.S. Pork Sustainability:
5 0 Y e a r s o f I m p r o v e m e n t

19. 19
Many people assume
that the term
sustainability only relates
to “preserving the
environment.”
This is not true.
Sustainability is a much
broader discipline that
involves improving short-
and long-term
profitability by managing
economic, societal, and
environmental factors to
meet the challenges of
tomorrow.
It’s All About the
Environment, Right?

20. 20
Responsibly meeting the needs of the present
while improving the ability of future generations
to responsibly meet their own needs…
Sustainability Simply
Defined

21. L i m i t T h e S c o p e ; L i m i t
O p p o r t u n i t y
21
SOCIAL PILLAR:
Addressing animal welfare,
worker safety, human rights,
community involvement,
property rights, food safety,
food quality, consumer trust
and food waste.
ECONOMIC PILLAR:
Addressing profitability,
shareholder return, capital
investment, food
affordability, license to
operate, efficiency and
innovation.
ENVIRONMENTAL PILLAR:
Addressing water, air
quality, deforestation,
conservation, land
management, waste,
energy, greenhouse gas
emissions and biodiversity.
Limited Focus
If your sole focus is on one pillar or
only on environmental metrics on
the farm, you negate the shared
responsibility of and the shared
opportunities for the entire global
meat value chain.
This holistic approach to
sustainability forces stakeholders to
view the meat value chain
comprehensively rather than
focusing on their “issue du jour.”

22. 22
22Source: Schlange & Co.Copyright BASF
Relevanceofissuesfrom
externalstakeholders’perspective
1 2 32,51,5
2
1
3
2,5
1,5 medium
high
A
C
B
D
E
A
C
B
D
A
CB
D
E
F
A
C
B
D
G
E
Relevance of issues from the company’s perspective
Economic issues
A Business ethics & business integrity
B Community investment
C Company transparency
D Compliance with law
E Local sourcing
Product responsibility issues
A Consumer health & safety
B Consumer information & education
C Technology in agriculture
D
Value chain transparency
(traceability)
Social issues
A Animal health & welfare
B Human rights
C Impact on community
D Labor rights
E Workers’ health & safety
Environmental issues
A Biodiversity
B Emissions to air
C Emissions to water
D Energy use
E Land management
F Waste
G Water use
JBS Materiality: Ranking the
HOT SPOTS

23. These are the traditional categories
most people associate with
sustainability
Global Reporting Initiative
( GRI) Categories

24. The social pillar is
critically important.
Within this pillar
arguably lies the
greatest opportunity to
demonstrate and align
our values with those of
the consumer.
Global Reporting Initiative
( GRI) Categories

25. 25
• All systems can
be sustainable
• Continuous Improvement
• Consumer choice
• Convey sustainable
message to consumer
• Consumer wants license to feel
good about products already
enjoy
• Successfully intensified production over
time BUT
• Aging producer base
• Supply constraints
• Producing out-of-spec
• Regulatory pressure
• $$ barriers to entry
• Technology an option?
Sustainable Challenge –
More with Less?
Sustainable Protein?
• 7.18 B Global Consumers. 9+ B by 2050;
• 2B in the middle class; 4.9B by 2030;
• Consumption of animal protein to
increase;
• 99% want choice;
• Food evangelists: 22%
• 1% vocal radical –reduce choice.
• Want to make supply chain claims;
• Make sustainable supply chain demands
on immediate supplier;
• React to 1% pressure.
• Packer/Processor sits between
retailer & producer;
• Animal Welfare responsibility;
• Food safety responsibility;
• Labor, Worker Safety responsibility;
• Technology user;
• Low margin operator.
• Make demands on retailers and farm
operations – land management
• Cannot influence 7.18 B consumers
but influence more than 1%
• Cannot influence the millions of
family farmers and growers;
• Can leverage vulnerabilities of large
entities in middle;
• Make unrealistic demands that
prevent us from meeting the global
challenge
Global Consumers
Retailers
Packers/Processors/Integrators
NGOs/Activists
Producers/Growers/Feeders
• Focus of many supply chain demands;
• Environmental responsibility;
• Technology user;
• Used by corporations as best message
vehicle for consumers.
Current Playing Field

26. 26
Global Roundtable for
Sus tainable Beef

27. 27
The GRSB Approach to
Sus tainability

28. 28
The Roundtable Appr oach

29. 29
Original NGO paradigm:
Convince large European and U.S. multinationals to make market-
based decisions to adopt eco-labels, standards or certifications as a
means to address environmental concerns like climate change and
sustainability; and socioeconomic issues such as trading conditions
for farmers and slave labor.
Roundtables as a Means for
Market Trans formation

30. 30
1988 (Europe) –
Coffee, Cocoa, Sugar,
Tea, Bananas, etc.
2006 (Netherlands) –
Global Standard,
certification audit,
5 Principles, 90+ indicators
2004 (Europe) –
Global Standard,
Certification audit,
8 Principles, 130+ indicators
2008 (Europe) –
Global Standard,
Certification audit,
6 Principles, 55+ indicators
2005 (Europe) –
Standard System,
Self-assessment, audits,
6 Principles, 45 criteria
2013 (Switzerland) –
Global Definition,
No Global Standard or
Certification,
5 Principles, 45 criteria,
0 Global Indicators???
A His tory of Roundtables

31. 31
Original Roundtable paradigm:
Corporations, in their zeal to proclaim their product offerings as
“sustainable,” would leverage Roundtable certifications, seals,
standards, etc. to market their products as environmentally friendly
and socially responsible.
Have we lost focus on our ultimate goal in the process?
Roundtables Have Equaled
Marketing

32. 32
Competitive Niche?
Or Precompetitive Norm?
What Are We Creating?

33. 33
Commercial Differentiation
Opportunities for Innovation &
Product Differentiation
beyond GRSB baseline
Precompetitive Sustainable Beef
Demonstrated Commitment & Performance
based on GRSB Principles & Criteria
Sustainable Baseline:
P r e c o m p e t i t i v e v s . D i f f e r e n t i a t i o n

34. 34
A Sustainable Meat Case

35. 35
Innovators will
readily adopt
sustainability
measures based on
market opportunity
But how do we get average to low-
performing producers to improve
performance? With 100 KPIs required
for certification in a “no premium”
context?
Are We Moving the Curve?

36. 36
“Warren Buffett found it 'extraordinary' that academics studied
such things. They studied what was measurable, rather than what
was meaningful. 'As a friend said to him, ‘To a man with a hammer,
everything looks like a nail.’ ”
Roger Lowenstein, Buffett:
The Making of an American Capitalist
“If a measurement matters at all, it is because it must have some
conceivable effect on decisions and behavior. If we can’t identify a
decision that could be affected by a proposed measurement and how
it could change those decisions, then the measurement simply has
no value.”
Douglas W. Hubbard
“We tend to OVERVALUE the things we can measure and
UNDERVALUE the things we cannot.”
John Hayes
Are We Meeting the Key
Challenges ?

37. 37
1,160 Pounds of Annual Average Food Loss for a U.S. Family of Four
1 of 3 Calor ies Was ted By
Cons umers

38. 38
By some estimates, less than HALF of
certified sustainable agricultural
products are SOLD as certified
sustainable products.
No One Wants to
“Certify Poverty”

39. 39
Focus on Performance not
Prescriptive Practices
Promote Innovation over
Compliance
Communicate, Communicate
& Communicate
Prioritize the Challenges &
Create & Measure Impact
Simplicity & Focus

40. 40
The Global Roundtable for Sustainable
Beef (GRSB) is a global, multi-stakeholder
initiative with a mission to
advance continuous
improvement in the
sustainability of the global
beef value chain through
leadership, science and
multi-stakeholder
engagement and collaboration.
Who We Are

41. 41
We envision a world in which all aspects
of the beef value chain are
environmentally sound, socially
responsible and economically viable.
VISION

42. CIVILSOCIETYCOMMERCE&PROCESSING
RETAIL
PRODUCER
OBSERVING
ROUNDTABLES
Dr. Judith
Capper
Dr. Holly Gibbs
Dr. Kate Varela
Jack Hanson, Willow Creek Ranch
Tom Hogan, Snappy Jack Cattle
Dr. Sandra Jepcott
Dr. Laurie Marker,
Elandsvreugde
Mt. Brisbane Pastoral Company
PRODUCER
M u l t i - S t a k e h o l d e r M e m b e r s h i p

43. 43
A balanced, science-based
approach to beef
sustainability that
empowers rather than
punishes and stimulates
innovation and adoption
of best practices.
What Are We Trying to
Accomplis h?

44. 44
We define sustainable beef as a socially responsible,
environmentally sound and economically viable product
that prioritizes Planet, People, Animals and Progress.
Global Definition in
Summary

45. 45
GRSB has worked hard to
combat the notion that
technology CANNOT be a
part of the solution to the
sustainability challenge.
5 Principles for
Sus tainable Beef

46. 46
The 2014 Global
Conference on Sustainable
Beef was held November 2-
5, 2014 in São Paulo,
Brazil.
Nearly 300 participants
from 21 different Nations
attended.
96%+ approval rate from
membership.
Adoption of Global
Definition
2014 Global Conference

47. 47
Global
Definition
Regional
Application
L o c a l S o l u t i o n s ; G l o b a l
I m p a c t

48. 48
PLANET, PEOPLE, ANIMALS & PROGRESS
Promoting Consistency &
Transparency in GRSB’s
Recognition of Successful Regional
Applications of the Global
Definition
Regional Roundtables remain
empowered to achieve sustainable
outcomes leveraging GRSB
Principles & Criteria based on their
system’s specific challenges
R e c o g n i z i n g & C e l e b r a t i n g
P r o g r e s s

49. 49
Responsibly meeting the needs of the present
while improving the ability of future generations
to responsibly meet their own needs…
Staying Focus ed on the
Sustainable Challenge

50. Sustainable Product &
Sus tainable Sys tems For All
50
These wonderful people could be our customers, but
they are not our sole customers
These wonderful people also need to eat. Both groups
deserve sustainable choices more than sustainable marketing.
Will the decisions we make as sustainable beef roundtables
make sustainable beef accessible to all or promote the
creation of another unscalable niche?

51. 51

52. 52
www.grsbeef.org

53. www.jbssa.com