Santander co-coordinated a £76m “green” CRA for SLC Agrícola in December 2020. Above, 5,200 ha deforestation on SLC's Fazenda Parceiro from 2019-2020. Image: AidEnvironment, with Planet Satellite imagery © 2020 Planet Labs PBC

UBS and Santander’s ‘green’ bonds linked to deforesters and rancher accused of slave labour in Brazil

Santander co-coordinated a £76m “green” CRA for SLC Agrícola in December 2020. Above, 5,200 ha deforestation on SLC's Fazenda Parceiro from 2019-2020. Image: AidEnvironment, with Planet Satellite imagery © 2020 Planet Labs PBC

UBS and Santander’s ‘green’ bonds linked to deforesters and rancher accused of slave labour in Brazil

Santander co-coordinated a £76m “green” CRA for SLC Agrícola in December 2020. Above, 5,200 ha deforestation on SLC's Fazenda Parceiro from 2019-2020. Image: AidEnvironment, with Planet Satellite imagery © 2020 Planet Labs PBC

The European banks UBS and Santander have raised hundreds of millions of pounds of “green” bonds that were partly intended for farmers and ranchers accused of environmental and human rights abuses in Brazil, an Unearthed and O Joio e O Trigo investigation has found.

Among those linked to the bonds are a farmer who was accused of holding five labourers in “slave-like” conditions, a soy company identified as the biggest deforester in Brazil’s Cerrado savannah, a cattle rancher fined for preventing the regeneration of 17 sq km of Amazon rainforest, and an ethanol producer that poisoned a river relied on by an Indigenous community.

This influx of cash was made possible by financial tools called CRAs. As bonds specifically linked to Brazilian agribusiness, CRAs are little-known outside the country – neither Bloomberg nor Refinitiv, the London Stock Exchange’s financial data platform, track them in detail. CRAs comprise a relatively small proportion of Brazil’s total agribusiness funding, but are growing rapidly: the amount of capital they have raised has soared more than 500% over the past five years from R$7bn (£1.15bn) in 2018 to almost R$43bn (£7.1bn) in 2022, according to Uqbar, a Brazilian market intelligence company. 

A CRA is a special type of asset backed security that may be issued by a company or individual who commits to invest the money in agribusiness. The role of the coordinating banks is to define the price of the bonds and sell them to investors. For this, the coordinating banks receive a fee, usually 3% to 5% of the total offer, which they divide among themselves. 

“The CRA is gaining traction and becoming an important instrument [of agribusiness’ financing]”, said Juliano Assunção, executive-director of the Climate Policy Initiative, a public policy think tank.

The legal reforms that allowed CRAs to proliferate were initially touted as supporting small-scale, sustainable farmers, and were well received by groups including WWF and the Climate Bonds Initiative. In practice, however, this market has been led by Brazil’s livestock industry giants JBS, Marfrig and Minerva, which have been repeatedly linked to Amazon deforestation. Most recently, in August, Santander helped coordinate one of the year’s largest CRAs, a R$1.5bn (£240mn) bond for JBS

As an Unearthed investigation can reveal for the first time, even CRAs distributed to investors by UBS and Santander and marketed as “green” have been destined for farmers and companies that have been investigated for their roles in socio-environmental disasters, large-scale deforestation, land grabbing, and slave labour. 

“I think the term greenwashing is too weak… These are alleged human rights abuses,” Alex Wijeratna, senior director of Mighty Earth, told Unearthed.

Workers clean up the Brazilian Supreme Court building in January after an attack by thousands of Bolsonaro supporters. Antônio Galvan, listed by Caramuru as a supplier, is being investigated for an alleged role planning the uprising. Photo: DOUGLAS MAGNO / AFP via Getty Images

One intended recipient of green CRA money was Antônio Galvan, a large-scale farmer and president of Brazil’s soy producers trade group (Aprosoja). In August 2021, two months before the CRA was issued, Galvan was reported to be under investigation for alleged conspiracy against Brazilian institutions and for encouraging the population to practise criminal and violent acts. Brazil’s Supreme Court is also investigating Galvan for planning the attack on Brazil’s congress, supreme court and the presidential palace on January 8th by supporters of Bolsonaro, widely interpreted by security services as an attempt to overturn the election of President Lula.

While these investigations are still to be concluded, and Galvan told Unearthed the allegations are “without a single piece of evidence”, he has also been fined for 5 sq km of illegal deforestation, and for selling soy illegally. Galvan has also been accused of stealing 76 ha – more than 100 football pitches – of his neighbour’s land, by moving boundary markers and registering the land as his own. Galvan added that legal issues over property borders are normal.

Galvan was listed as an intended recipient of money raised from a R$354m (£56.4m) green CRA sold by UBS with Brazilian bank BTG Pactual in October 2021 for Caramuru, a large Brazilian grain trader. 

The CRA market is currently dominated by Brazilian banks, but two European banks are quietly gaining traction. Spain’s Santander has been coordinator or lead coordinator in CRAs totalling at least R$23.4bn (£3.7bn) through CRAs for Brazilian agribusiness since 2018, R$8.6bn (£1.3bn) of which was in 2022 alone. 

In 2020, Switzerland’s UBS partnered with Banco do Brasil, the world’s largest agribusiness financier, to create the joint venture UBS BB Investment Bank. Since then, it has been coordinator or lead coordinator for CRAs totaling R$12bn (£1.9bn), more than half of which was raised in 2022. 

UBS-BB received estimated fees of about R$5m (£800,000) for coordinating Caramuru’s 2021 CRA. In 2022 it coordinated a second, bigger green CRA for Caramuru, bringing its total fees to an estimated R$13m (£2.1m). 

Caramuru’s first issuance raised the money to buy soy from 310 suppliers, which it listed in the CRA documents – among them Galvan and his son, Albino Galvan Neto. The sustainable finance office Resultante approved Caramuru’s 2021 CRA as “green”, based on the production of biodiesel and on Caramuru’s commitment  to “sustainable agricultural production”. 

Galvan is far from the only controversial potential supplier on Caramuru’s list. It also includes Werno Elger, a soy producer who was investigated because it was alleged that he was  keeping five men under slave-like conditions in the municipality of Aporé, in Goiás state. The workers were rescued in April 2021, five months before Caramuru’s CRA issuance, by a federal government task-force. 

Werno Elger, who at the time was under investigation for keeping workers in slave-like conditions, was listed as an intended recipient of green CRA money. Elger was later cleared. Above, workers' accommodation. Photo: Brazil's Ministry of Labour and Employment

Elger’s lawyers vehemently rejected the allegations. In October, a federal court acquitted Elger. Inspectors found “non-compliance with basic standards related to health, safety, hygiene and comfort in the work environment,” the judge wrote, but “the conditions were not degrading to the point of… a condition analogous to slavery.” The full statement can be read here.

Also on Caramuru’s intended supplier list is Ana Cláudia Borges de Almeida Coelho, who owns Mato Grosso agribusiness companies Uberê Agropecuária and Agropecuária Atlas. In 2021, Mato Grosso’s Environmental Secretary (Sema) fined Coelho R$11.2m (£1.7m) for, among other things, growing grains and raising thousands of cattle on 17 sq km of Amazon rainforest that had been illegally deforested by its previous owner. Marcelo Vercesi Coelho, Ana Cláudia’s husband and business partner, told Unearthed Sema had authorised him to use the area for agriculture. 

Karine Becker Wessner, another farmer in Mato Grosso listed by Caramuru, was also sued for growing soy in an illegally deforested area. Wessner settled the case by signing an agreement with the Federal Public Ministry. 

Another intended recipient of Caramuru’s “green” money is accused of land grabbing and intimidation of small-scale farmers in the Amazon. Federal Police named José Romanzzini as one of the leaders of a systematic program of “misappropriation of public lands, violence against settlers, threats, expulsion and reconcentration of plots” in the Itanhangá/Tapurah settlement, in Mato Grosso. Itanhangá/Tapurah is one of Brazil’s largest land reform settlements, which are designed to alleviate rural poverty while helping to protect the Amazon from the advance of agribusiness by granting plots to small-scale farmers and people who live off the collection of forest fruits and nuts.

Police reports allege Romanzzini and others tried to force out the settled families by destroying their crops and threatening them with violence and even death. The reports add that after Romanzzini and his cronies seized the plots, they cleared at least 80% of the forest. A preliminary decision in a lawsuit resulting from the reports prohibited Romanzzini from entering the settlement area, but is still pending a final decision.

Neither Romanzzini nor Wessner responded to a request for comment.

In its 2022 Sustainability Report, Caramuru states it monitors the environmental compliance of all its suppliers and doesn’t trade with people on the Brazilian Labour Ministry’s slave-labour “dirty list”. 

In an emailed statement, Caramuru said that it did not ultimately buy soy from all of the listed suppliers with the CRA money, and that its internal due diligence procedures would have prevented trade with producers with any socio-environmental violations. However, it did not deny ever having bought soy from the suppliers listed above.

“Although an extensive list of suppliers is included in the prospectus, it is not a fact that Caramuru purchased soy from all of them. With each purchase, Caramuru checks the provenance of the places of origin. Therefore, it is possible to state that soy was not acquired from places with issues of illegal deforestation or land grabbing, nor from farms with work similar to slavery.” Caramuru’s complete response can be seen here

Amazon Fires, Indigenous tragedy behind green bonds

In May, Uisa, one of the largest ethanol and sugar producers in the world, issued a R$150m (£24m) green CRA coordinated by Santander. The company – which changed its name from Usina Itamarati in 2019 after it was bought by a private equity fund – is reported to supply Coca Cola with sugar. 

Santander received an estimated R$3.8m (£604,000) in fees for selling Uisa’s CRA-bonds to investors. 

According to the CRA documents, the money will be used to buy sugar cane from five farmers, to produce energy and biofuel. This was enough to earn the bond a green label – despite the dozen environmental fines imposed on Uisa or Usina Itamarati, most recently for setting fire to ​​17 sq km of Amazon rainforest last year. 

One supplier to Uisa is Altair Nodari, a producer sued by Mato Grosso’s public prosecutor for deforesting nine sq km in Porto Estrela, Mato Grosso, from 2018 to 2020. By email, Nodari’s lawyer said they were disputing the allegations, and the clearance was in compliance with the Brazilian Forest Code. She added that the investigation was ongoing.

In May, Santander coordinated a £24m green CRA for sugar producer Uisa. Altair Nodari, a farmer sued for deforestation, is listed as a supplier. Graphic: Aman Bhargava / Revisual Labs

Uisa – or Usina Itamarati, as it was called at the time – was also responsible for a leak of vinasse, a toxic by-product of ethanol production, into a river that borders the Umatina Indigenous territory in Mato Grosso. 

Indigenous leader Cacildo Amajunepa told Unearthed that his people had always made their living from the Bugres River, but in July 2007 the river turned dark and began to smell. Thousands of dead fish floated to the surface.

“We never thought we’d experience something like that,” said Amajunepa. “You make your living there, and suddenly you have nothing left.”

According to Mato Grosso’s public prosecutor, six days passed before the company notified local authorities of the accident. It took “no action to benefit the environment” in the meantime.

A lawsuit seeking damages for the Indigenous people and others affected by the spill is ongoing. In April 2023, the company offered R$2m (£322,000) compensation, which Mato Grosso’s federal prosecutor (MPF-MT) deemed inadequate. 

According to Paulo Augusto Mario Isaac, a retired anthropologist from Mato Grosso Federal University who wrote a 2017 report on the accident attached to the lawsuit against Itamarati, the community couldn’t drink the river water for a full year, and could not fish for two years. Even today their yield is lower than before the accident. Many Indigenous people, who depended on fish for income, had to abandon their villages to work in the city or in the nearby ranches. 

Uisa declined to comment on the investigation.

Wijeratna, from Mighty Earth, argues the role of the banks as intermediaries in these transactions does not exempt them from accountability for their impacts. 

“If they are bringing these bonds to the market and selling them, they should have some legal liability for the human rights abuses and deforestation that happen on the ground,” he told Unearthed

Uisa's green CRA will be used to buy sugar cane from five farmers to produce energy and biofuel, according to CRA documents. Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Both UBS BB Investment Bank and Banco Santander (Brazil) S.A. are subject to the environmental and social risk policies of their parent companies in Switzerland and Spain, respectively. Santander lists a series of situations which need “special attention”, including “activities with an impact on tropical forests, tropical savannahs, and savannah biomes or located in High-Risk Geographies” and “deforestation risk with agribusiness clients in the Amazon biome”. It doesn’t specify what “special attention” means, except to say that “a detailed analysis is performed.” 

A Santander spokesperson told Unearthed that CRAs are regulated by CVM, the Brazilian Securities and Exchange Commission and that the bank can act as a structurer and distributor of these securities and also as an investor. 

“For a CRA to be classified as green or sustainable when issued to the market it must comply with the ICMA’s Green Bond Principles and require an independent second party validation. Santander has strong governance processes in place to ensure that required market standards are adhered to,” stated the bank.

UBS commits to “not knowingly provide financial or advisory services to clients” associated with damages to high conservation value forests, child labour and forced labour, among other things. The Swiss bank also has a policy for the soy sector: “companies producing soy in markets at high risk of tropical deforestation” must be a member or publicly commit to the Roundtable on Responsible Soy (RTRS) or similar standards. 

A spokesperson for UBS said that they “apply Group-wide guidelines on sustainability and climate risks. These guidelines help us to identify and address possible adverse effects on the climate, the environment, and human rights, as well as the risks associated with them for our clients and UBS.”

 “We support our clients in their transition to the net zero target and we do not provide finance or advisory services to companies whose primary business activity is associated with illegal logging or high conservation value forest,” the statement said, adding that they do not comment on client relationships.

Investors target Cerrado

In total, Uisa raised nearly R$595m (£95m) through four CRA emissions in 2021 and 2023, only one of which was green. All of them used rural land as collateral, totalling  at least 192 sq km in 35 properties located across Mato Grosso, meaning if the company goes bankrupt, the land would be sold and the proceeds transferred to the investors, after costs. 

The use of land as a collateral and the creation of Fiagros, agribusiness investment funds,  were among the legislative measures undertaken under President Bolsonaro’s administration. They helped CRAs, originally created in 2004, to finally take off — with growth rates of 60% in 2021 and 70% in 2022, according to Uqbar.  

Matopiba is Brazilian agribusiness's new frontier, rapidly increasing deforestation in the crucial, threatened Cerrado biome. SLC Agrícola has 10 large-scale farms in the region. Photo: Marizilda Cruppe / Greenpeace

The laws “brought real assets, such as land, water and environmental services, closer to financial assets”, said Larissa Parker, a socio-environmental lawyer from Grain, a non-profit organisation that supports small farmers and social movements.

Fábio Pitta, a researcher at Harvard and São Paulo University (USP), told Unearthed the rush of Brazilian agribusiness into the financial market has caused commodities prices to rise in the futures market, with direct consequences for deforestation and land-grabbing on the ground. 

“The company wants to expand production to take advantage of these prices. So they take on large debts and promise to expand, but for that they have to open new areas,” said Pitta, who has spent years researching the role of foreign investors in the destruction of the Cerrado, Brazil’s ecologically unique savannah biome, and the impacts on its traditional communities.

This expansion is happening mostly in an area of the Cerrado known as Matopiba, for the four states across which it extends: Maranhão, Tocantins, Piauí and Bahia. Historically an impoverished, relatively undeveloped region, Matopiba is being rapidly transformed into the country’s newest agribusiness frontier by farms growing soy, cotton and corn on an almost unimaginable scale.

“The law allows you to deforest much more in the Cerrado than in the Amazon Rainforest, [and] you have flat areas, conducive to mechanisation and which have water access,” said Pitta, who also coordinates a group of organisations working on land rights issues.

Located in the North and Northeast of Brazil, Matopiba accounted for 61% (5,227 sq km) of all Cerrado deforestation from August 2020 to July 2021, according to the Amazon Environmental Research Institute, Ipam. The biome is a crucial carbon sink, fundamental for the continent’s water supply and climate stabilisation. It is the world’s richest savannah, concentrating 5% of the world’s plant and animal biodiversity. But it is weakly protected – farmers can deforest up to 80% of their property in some parts – and almost half of its area has already been lost to agribusiness. 

In this process, the Cerrado’s traditional communities are expelled from their homes. Matopiba has one of the highest rates of conflicts for land and water in Brazil, according to the CPT, which monitors these issues. 

“The entry of foreign capital brought money to finance deforestation and has made land grabbing more intense,” said Altamiran Ribeiro, a CPT agent in Piauí.

One company with a particularly aggressive expansion strategy in the region is Cargill supplier SLC Agrícola, which has 23 farms across 7 states, including 10 large-scale operations in Matopiba. Chain Reaction found SLC Agricola to be the biggest deforester in the Cerrado in 2020, clearing 101.5 square km (39 square miles) of native vegetation. A 2020 Unearthed and TBIJ investigation found more than 210 sq km of deforestation recorded on SLC Agrícola farms from 2015 to 2020. Since 2012, it has also had a subsidiary, the SLC Land.Co, specialised in buying, deforesting, and selling land in Matopiba. 

In December 2020, the same year that SLC reportedly deforested more Cerrado land than any other entity, the company was able to raise R$480m (£76m) via a “green” CRA, thanks to Santander. The cash will be invested in “projects directly linked to the reduction of greenhouse gas emissions”, such as the “the expansion of digital and low carbon agriculture practices”. The CRA is backed by 55,000 tonnes of cotton, to be produced in 48 farms in six Brazilian states, including Maranhão, Bahia and Piauí, in Matopiba.

SLC Agrícola said in 2020 that it would stop deforesting in the Cerrado, but that it still planned to clear land later that year. Fires were detected on one of its farms in 2021. By email, SLC Agrícola said that it had stopped opening new areas before the end of 2020 and that fires detected since then had natural causes or may have originated in neighbouring properties. Read the full response here.

In order to get a green label, the CRA must be verified externally. Despite SLC Agrícola’s history, the consultancy Resultante concluded the company has “consolidated management practices and integration of environmental, social and corporate governance issues”. 

“I have seen second party opinions that wave through green bonds with very little scrutiny, so they can be very dangerous”, said Wijeratna. “As soon as you get that second party opinion, that’s all that you need to get that financing.”

KPMG, which bought Resultante in 2022, said these verifications happened before the acquisition, so it could not comment.

The three green CRAs from SLC Agricola, Caramuru and Uisa also state they comply with the guidelines of the Climate Bonds Initiative (CBI) or with the Green Bond Principles (GBP), from Capital Market Associations (ICMA). But none of these bodies have the authority to monitor whether the companies claims around sustainability are really being fulfilled. 

“There is no assigned responsibility. There is no one enforcing and checking the claims made in the CRAs, and that is the big flaw,” said Wijeratna. “If these kinds of financial mechanisms are facilitating human right abuses and deforestation, then they need to have much stronger regulation.” 


This story was updated on December 13 2023, to reflect a federal court ruling that cleared Werner Elger of keeping workers in slave-like conditions. The judge wrote that “although the labour violations were serious, there was no annihilation of the individual’s dignity or freedom, either physical or psychological,” so the conditions could not be compared to slavery. The full statement can be read here.

The story was updated a second time on December 14th to remove some details of Mr. Elger’s case, and to reflect that he had two lawyers, not one.