With a share of only 8% in GDP, Amazônia has great potential for impact investments

Article published by GIFE, a platform for strengthening philanthropy and private social investment in Brazil, on March 28, 2022. 

 

The Legal Amazon comprises nine Brazilian states and 772 municipalities. Despite holding almost 60% of the national territory, it contributes only 8% of the Gross Domestic Product (GDP). The Acceleration Thesis of Partners for the Amazon Platform (PPA)Impact Investment in the Amazon: paths to sustainable development, mapped the possibilities and challenges for investing in socio-environmental businesses in the region.

The initiative indicates the possible paths to accelerate actions within four axes: bioeconomy, regeneration and restoration, carbon/climate and sustainable supply chains.

“The purpose of the project is to create bridges between different opportunities for impact entrepreneurs, thus building development paths for entrepreneurial initiatives in the territory. In parallel, the aim is to find gaps or possibilities for strengthening strategic programs or even building new programs, always in accordance with the demands and needs of the territory”, explains Augusto Corrêa, executive secretary of the PPA.

The survey points out some difficulties for the creation of new ventures in the locality, such as the little development of the service sector, access to supplies, logistical solutions, communication, energy generation and water purification. According to the publication, it is necessary to see such shortcomings as opportunities, investing more in projects with impact in the service sector.

Interviews carried out in this study pointed to a lack of knowledge about entrepreneurship, reality and regional culture as the main barrier to successful impact investing in the region, as well as the lack of training among entrepreneurs.

ample potential

Data such as the participation of the Legal Amazon in the GDP show that there is great potential for private social investment (ISP) to act. “If we consider only the ecosystem services inherent to the existing maintenance, the Amazon already contributes with trillions of dollars annually just because of its importance in processes of climate regulation, water management, biological control, pollination and so much more”, analyzes Augusto.

According to the guide ISP through the Amazon, a GIFE initiative, social, inclusive and sustainable development in the Amazon is an urgent topic that brings with it questions about new development models that are capable of reducing inequalities and, at the same time, guaranteeing the environmental protection and conservation of the biome.

According to the executive secretary, the value that can be obtained from the sustainable use of its biodiversity is very comprehensive and can represent an important vector of development, permeated by the bioeconomy. “We have the largest biodiversity reserve in the world. This type of business, linked to the sustainable use of land and which brings socio-environmental benefits, can be key to the maintenance of our environmental reserves and, mainly, to Brazilian economic development.”

local features

The Amazon impact ecosystem has its own characteristics that must be analyzed when proposing business acceleration programs. Augusto gives a tip for investing assertively in the region. “A study carried out in 2018 by the PPA in partnership with SITAWI demonstrates the presence of many actors and financial resources in the Amazon ecosystem, but these will only be favored if they act in a manner consistent with the particularities of the region.”

In order to know these particularities and understand where to invest, the Acceleration Thesis presents, in several areas, the advantages and disadvantages of betting on a business and success drivers. One example is the managed exploitation of new commodities açaí, guarana and essential oils.

“It is a fact that a significant part of the businesses work with forest value chains, emphasizing the importance and potential of products extracted in a sustainable way by the people who live there”, says the specialist. The Thesis can be defined as a pocket guide, which brings from the local conjuncture to where and how to seek the ISP to support the ventures.

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