Cotton grower billed as ‘ethical investment’ linked to land invasions

It grows cotton for companies that supply Nike and Adidas and attracts millions of dollars from some of the world’s top investment firms. But you’ve probably never heard of SLC Agrícola.

The Brazilian farming business sees the Cop30 climate summit, currently taking place in the Amazonian city of Belém, as a chance to boost its public profile. Aurelio Pavinato, SLC’s CEO, called the gathering “a crucial moment to strengthen our global image and consolidate the country as a reference in sustainable production and environmental conservation”.

But while SLC pushes its green image inside the summit, 700 miles away its cotton and soy fields lie at the heart of a tense land dispute. In the Baixa Grande do Ribeiro municipality in the south of Brazil’s Piauí state, traditional communities claim a farm encroaches on their ancestral territory. The dispute stretches back decades, with the community saying they suffered pollution, environmental harms and aggression before SLC leased the farm, according to court documents.

Despite the situation, however, some global investors and major asset managers, such as Vanguard, are channeling so-called sustainable funds into the company.

“Nature and human rights remain a major blind spot for asset managers,” said Xavier Lerin, the interim head of financial sector research at ShareAction, a responsible investment group. He added that the destruction of ecosystems is one of the biggest threats to the global economy.

Farming and land-grabbing

The cotton farm leased by SLC lies within the Cerrado biome, an expansive savannah with vast underground water stores that became the site of an agricultural boom that began in the 1970s.

A decade before, Brazil’s military government offered free smallholdings on rural public land to make it productive. Most land in the Cerrado is now officially privately owned, much of it by massive farming businesses.

The private ownership of land in the Cerrado often means it has fewer protections than the Amazon, the majority of which is public. And the Cerrado has lost about a third of its vegetation in the past 40 years. Traditional communities, many of whom are still in the process of getting territory formally recognised, conserve a small share of what remains.

“Today, we are facing what is called modern land grabbing,” said Juliana Martins Carneiro Nolêto, a public prosecutor representing the Melancias community. “[The farmers] feel authorised to invade the community, using threats, expelling families, contaminating rivers, contaminating crops.”

Melancias, a traditional riverside community, is one of them. They say Cosmos Farm, a sprawling estate that’s about the same size as Cardiff, encroaches on land they’ve inhabited for generations. SLC company documents show that it leased the farm from two landowners called Ricardo Tombini and Eduardo Dall’ Magro in August 2024.

Piauí state’s land development company awarded titles to the area covered by Cosmos Farm to two farming businesses in the 1980s. Ownership changed hands again before it was sold on to Tombini and Dall’ Magro. Once they’d bought the farm, they were responsible for documenting it with Brazil’s rural land registry.

However, according to Brazilian public prosecutors, the original sale did not take into account the communities that already lived in the area. And the boundaries Tombini and Dall’ Magro registered conflict with those the Melancias community outlined in its territorial claim submitted to Interpi, the state body now responsible for land management.

Today, the farm has expanded further into land where the Melancias community grows cassava and corn, they say. It also borders on areas where Indigenous Akroa Gemela communities live. In the past, they too have suffered from environmental damage, including the dumping of toxic waste, court documents allege.

“We are impacted by everything. Besides the threats, there’s also the threat of pesticides,” said Carlos*, a member of the Melancias community. “The animals are gone. Everything is disappearing. Many species have been extinct for a long time.”

SLC said that it conducts a due diligence process when leasing or acquiring new areas and considers the possibility of an overlap with traditional communities. In such cases, the company said it does not proceed with these negotiations.

It said it leases an area within the boundaries of the wider Cosmos Farm. And the part of the farm that compromises the Melancias’ territory, which is outside the area it leases, is the responsibility of the landowner.

Ricardo Tombini told Repórter Brasil that he bought Cosmos Farm in 1995 and that its boundaries were established in the 1980s. He said the actively farmed area was far from the Melancias community. Eduardo Dall’ Magro declined to comment.

An Adidas spokesperson told TBIJ that since 2018 it has only used third-party certified cotton that meets industry standards. They added that they have already contacted Better Cotton Initiative, a sustainable sourcing programme and the company’s main cotton sourcing partner, to investigate the situation.

Nike told TBIJ it is committed to ethical sourcing practices, adding: “It’s our goal to drive continuous improvement in the communities where our products and materials are sourced and manufactured.”

Booming business

SLC doesn’t just grow cotton, but other cash crops too, including soy and corn. It has been listed on the Brazilian stock market since 2007 and today it’s a highly profitable enterprise, having paid out $45m in dividends to its shareholders so far this year. Most are individual investors. But they also include Blackrock, State Street and other asset managers.

Chief among them is Vanguard, which had more than $11m in SLC shareholdings at the end of last year. Some of those shares are held by its supposedly ethical funds, which have “ESG” (environmental, social and governance) in their names.

ESG funds shouldn’t be invested in certain industries, such as arms, gambling or fossil fuels. While there are no restrictions on investing in agricultural business, investments are meant to be independently screened for social, environmental and governance criteria and should align with UN business principles on these issues. The type of ESG fund through which Vanguard channels some of its SLC investments is meant to promote these goals.

Lerin, of ShareAction, said: “Negative impacts on nature and human rights create serious financial, reputational, and legal risks. However, few institutions have robust investment policies for sectors like agriculture and forestry, and many still fail to ensure their investee companies respect the rights of people directly affected by nature destruction.”

Vanguard did not respond to TBIJ’s requests for comment. Blackrock and State Street declined to comment.

Far from the mingling at the Cop venue in Belém, the Melancias community’s situation remains highly precarious.

“No one lives in peace. In a situation like this, people are constantly tormented by fear and never know what will happen, whether in relation to their own physical integrity or their legal situation,” Carneiro said.

And the community has a message for the international investors channeling money into SLC: “They should better investigate the impacts they are causing by investing in these companies.”

*Name changed to protect identity