Brazilian companies chase investors in battle to save Amazon

Many private Brazilian companies trying to slow the destruction of the Amazon forest are using a climate conference in New York this week to lure investors to support preservation plans.

Investors are increasingly trying to develop carbon offset credits to help companies and the government to meet targets for emissions reductions, which could be a benefit for Brazil.

The Amazon’s preservation is considered key to maintaining the planet’s climate balance, but wide swathes of the forest were destroyed in recent years due to increased development and relaxed environmental protections.

“The idea is to try a different path, to offer solutions through private investment,” said Luciana Ribeiro, a partner at private equity eB Capital, who helped organise the Brazil Climate Summit at Columbia University, one of the events during the New York Climate Week.

About 7,943km² of the Amazon, the world’s largest rainforest, was destroyed from January to August 2022, according to deforestation tracking nongovernmental organisation Imazon. That is the most in 15 years, an area roughly the size of the island of Puerto Rico.

Private companies trying to slow deforestation are distancing themselves from Brazil President Jair Bolsonaro’s government, heavily criticised for relaxing enforcement of environmental laws. Bolsonaro faces voters in October’s election. Polls show him trailing rival and former president Luiz Inácio Lula da Silva.

“We are doing a roadshow here, we need to attract capital. Politics don’t define everything,” said Marina Cançado, CEO at Future Carbon Group, which is seeking investors for a purchase of 1-million hectares of forested area in the Amazon for preservation. Carbon credits would help finance the venture.

Brazil could generate 10% of nature-based global carbon offsets, or about 1-billion tonnes of CO₂ a year, according to a study by Boston Consulting Group (BCG) released this week.

“Preserving forests used to be only about expenses. This is now changing. You can profit from it,” said Henrique Dantas, BCG’s climate and sustainability consultant.

He said the need for carbon offsets is going to soar around the world as corporations seek to neutralise emissions, and preserving and restoring forests constitutes a giant opportunity to generate those credits.

One of the companies, Re.Green, has raised $80m with private equity investors; they focus on forest restoration in the Amazon and in Brazil’s Atlantic forest.

Oil major Shell said in July it had invested $40m in Carbonext, a Brazilian preservation-focused company.

Other companies working with the idea of preserving forest using carbon credits and sustainable management of local economic activities include Nemus, Biofilica and AYA Initiative, led by French entrepreneur Alexandre Allard.

Reuters