Market Assessment Sustainable Investing in: Agroforestry ... Agroforestry.pdf · 4 Guiding Principles of the Market Assessment (2/2) The Assessment will apply a qualitative approach
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Business Plan
Market Assessment
Sustainable Investing in:
Agroforestry, Restoration &
Conservation
Many of our biggest sustainability challenges directly relate to Sustainable Agriculture,
Agroforestry and Conservation (Forests and Biodiversity): Climate change mitigation,
biodiversity conservation, food security, healthier food, sustainable cities, regional
development represent some of the most important global challenges of the 21st
century.
Tackling these issues from an investing perspective demand a different mind-set in the
sense of “valuing” impact and return - which many times are still “intangible” - as well
as applying new business models.
There are already several initiatives in Agriculture and Agroforestry with a sustainable
investing mindset. However, many of them under the radar.
A market assessment is required as the basis to promote new “joint initiatives” that
could increase the amount of private investing together with FDIs in order to prove it is
possible to scale up sustainable agriculture and agroforestry.
Introduction
2
Market Assessment: Objective
To provide a panorama of sustainable investing in
Agroforestry, Restoration and Conservation in Brazil
and in Peru as a reference/benchmark to guide further
investing, propose blended finance models, allocate
capital and finally, scale-up initiatives that have a direct
contribution towards climate change mitigation, climate
resilience, and biodiversity conservation.
3
Guiding Principles of the Market Assessment (1/2)
As the Assessment aims at identifying and analyzing the already in place
business and blended finance models1 that would allow a larger flow of
(positive) impact driven investing in Agroforestry, Restoration and
Conservation, the Assessment will focus on the investors’ perspective.
The Assessment sample includes: Investment Funds, Sovereign Funds,
Foundations, Development Finance Institutions (DFIs), Private Investors,
Companies and/or food value chain integrators that have intentionally of
investing in Agroforestry, Restoration and Conservation as part of their
business.
Domiciled/headquartered in Europe, USA and Latin America.
There is a clear regional focus to allow a more in-depth analysis – Brazil and
Peru.
(1) Blended finance is defined as “the strategic use of development finance and philanthropic funds to mobilize private capital
flows to emerging and frontier markets"
4
Guiding Principles of the Market Assessment (2/2)
The Assessment will apply a qualitative approach and concentrate on in-
depth interviews and selected case studies “in the ground” – making the
experience more tangible with interviews, pictures and videos.
The Assessment also includes the development of a webpage which aims
at consolidating the available knowledge (studies, reports, cases, videos) in
the area of sustainable investing and agroforestry.
The Assessment will provide the point of departure and kick-off the
conversation of a “Transformation Leaders Network” formed by a group of
private investors, (U)HNWIs, foundations, institutional investors FDIs and
Governmental Sovereign Funds to work together in a proposal that aims at
incubating and scaling up sustainable investment in Agroforestry,
Restoration and Conservation.
5
We look at Agroforestry as it being the use of spatial and/or temporal
combinations of trees, crops and/or animals within the same area.
Our understanding of Agroforestry
Agroforestry Systems
• Planting of permanent crops, such as coffee and cocoa in areas shaded by trees;
• Timber plantations with sequential agro-forestry;
• Orchards (i.e., fruit and nut trees) combined with crops;
• Silvo-pastoralism (livestock and forestry combinations); and Inter-twinned agro-
forestry.
Extractivism
• Acai, Brazilian Nut, and other native species according to selected biome
Value Chain Development
• Initiatives that integrate value chains (i.e. smallholder farmers) aiming at product
value-adding and having a positive impact in biodiversity conservation.
• We will also look at the input factors influencing the value chains:
• Water management (access, irrigation)
• Other relevant input factors for value chain development
6
We look at Restoration from a Systemic perspective following the Bonn
Challenge principles.
Our understanding of Restoration
• We will look into both Landscape and Individual Restoration initiatives as we
believe the individual ones are a good starting point to be integrated to the larger
picture.
• Restore functionality, giving preference to original vegetation
• Allow multiple benefits – from adding trees to agricultural land to enhance food
production, reduce erosion and provide shade; to adding trees aiming at
sequestering large amounts of carbon, protecting downstream water supplies or
providing habitat for the wildlife
• Tailored to local conditions
• Involves different stakeholders
• And avoids further deforestation
7
This Assessment will search for practices of sustainable investing in
Agroforestry in selected countries of Latin America, more
specifically: Brazil and Peru
The Amazonia relevance for its biodiversity, fresh water flows,
carbon sequestration, natural resources, traditional
communities, etc. justifies focusing on these two countries,
mainly:
The largest part of the Amazon is in Brazil (60% of total)
The largest part of Peru is in the Amazon (60% of Peru is in the
Amazon and 13% of the Amazon is in Peru)
Due to the relevance of family farming as the main source of
income and the flag-ship of many sub-regions in those countries
Those countries are the cellar of new sort of functional food
In Brazil we will also be looking at investments done in the
biome Mata Atlantica and Cerrado.
Market Assessment: Regional Focus
8
Market Assessment: Investor Selection Criteria
Investors Selection Criteria
Investor Domicile Europe, USA, Brazil and Peru
Investor Size Any
Investment Theme Sustainable Agriculture and Agroforestry
Geographic investment focus Brazil and Peru
Asset Class All
Target Returns Minimal: Return of invested capital
Minimum Investment Size US$ 100,000
Fund stage Open - Post First Close, Closed
Investment Status Open-investing, Closed-investing, no longer
investing
We will be looking at “for-profit” initiatives involving institutional investors,
direct investors, (U)HNWIs, Family Offices and Foundations.
There will be a separated session about investments made by Development
Finance Institutions (DFIs), other Governmental Funds.
Corporations will be added if they have a proven intentionality in
implementation agroforestry projects. Those doing it as part of compensation
agreements will not be considered.
9
The market assessment will be developed following the qualitative
research method with selected case studies. It is composed by:
Desk research(1) which will provide a first assessment of the
sustainable investing initiatives in Agroforestry and Conservation
according to investors domicile country and projects geographic
location. It will also provide a summary of other co-related market
overview and business model studies in this subject.
In-depth interviews(2)
Selected case studies will be portrayed(3)
(1) In a preliminary desk research we have identified over 26 investors domiciled in Europe, Latin
America and the USA in the area of agroforestry with focused region Peru and Brazil.
(2) We will perform 10 (ten) in-depth interviews (on-site whenever possible otherwise by phone)
(3) The amount of 5 (five) cases will be selected to be written and portrayed in the Market Assessment
Market Assessment: Methodology
10
Interative Online in a webpage which will include:
– the Assessment Report Highlights
– the Report version for download
– selected cases in written and illustrated with project pictures andinvestor/entreprenuer interviews
– video statments with the market assessment sponsors about the importance and relevance of sustainable investing in Agriculture andAgroforestry
– a “reference library” including a reference to co-releated studies andmarket assessments about Agroforestry and Conservation in projects based in Latin America
The Assessment Report will be available in English only
A launch event will take place in partnership with strong institutional partners in Brazil and/or Peru and in Europe
Media Coverage
Market Assessment: Form & Content
11
Market Assessment: Timeline
ActivitiesOctober
November DecemberJanuary February
Review and define report structure
and the key facts&figures to be
accessed during desk research
Desk Research – active funds, DFIs,
funds and direct investment in Brazil,
Peru
In-Depth Interviews
Compare desk research and in-depth
interviews + Data Analysis and
Structuring
Validate information and preliminary
conclusions with Knowledge Board
Case Study Writing
Report writing
Pre-final version submission to
Knowledge Board for overall review
English text review
Report Lay outing and Online
Uploading
First-Hand Presentation to Sponsors
12
Alimi Impact Ventures is an advisory firm assisting sustainable companies
and fund managers seeking solutions including raising capital, evaluating
strategic financial options and searching for new deals in order to scale-up
Sustainable Investing in Social-Environmental Impact Businesses in Latin
America.
We act based on a Systemic Perspective by including the different key
players in international value chains, impact investors, large corporations,
policy makers, and development banks.
Our action is consolidated in four main streams:
Assess and Develop Investable Deals
Engage Large Companies into Sustainable Investing
Promote a Transformation Leaders Network
Educational programs aiming at strengthening social finance and impact
investing in Latin America
www.alimi.com.br
Who we are – Alimi Impact Ventures
13
Impact Hub Brasil Part innovation lab, part business incubator, and part
community center, they offer their members a unique ecosystem of
resources, inspiration, and collaboration opportunities to grow impact.
Impact Hub believe a better world evolves through the combined
accomplishments of creative, committed and compassionate individuals
focused on a common purpose.
Since 2012 the Impact Hub Global and WWF Switzerland have established
a fellowship program in Biodiversity & Resource Efficiency.
In Brazil, since 2017 the Impact Hub Association, in partnership with WWF,
have launched the “Desafio Ambiental” (Environmental Challenge) which is
a call for entrepreneurs in areas co-related to restoration in Brazil which are
economically viable.
The Impact Hub adds a lot to this project due to its experience in fostering
entrepreneurship through like-minded people sharing the same space, as
well as its capitarity – both needed for the identification and incubation of
investable deals in Agroforestry and Conservation.
http://saopaulo.impacthub.com.br/
Who we are – Impact Hub Brasil
14
Angélica Rotondaro (Project Supervision) is a fouding member of Alimi Impact
Ventures, co-founder the multi-stakeholder platform Impact Investing Latin America
(IILA) and a member of the Advisory board of Insper-Metricis. From 2009 to 2016 she
was the executive Director of the St.Gallen Institute of Management Latin America
(Switzerland) in São Paulo. Before that she was a senior consultant for branding,
responsible for Latin America and Spain in an international Swiss company. In
parallel, she was the co-founder and vice-president of the private foundation for
investments in the 3rd sector and coordinated projects related to grass roots
development. In the environmental field, she implemented a brand positioning project
of alternative energy business in Asia and Latin America. She holds a PhD in
Organizational Studies by the University of St.Gallen.
Marian Grabowski (Project Manager – Ouside LatAm Investors & Fundraising) is a
Double-Degree Master student in Finance and International Affairs at Sciences Po
Paris and St. Gallen University. With over 4 years of work experience in the
Development Finance industry, he currently works as Commodity Research Analyst
for responsAbility investments. His master thesis is about sustainable agriculture in
Malawi (Africa) where he has previously worked.
Carlo Iengo (Project Manager – LatAm Investors & Transformation Leaders
Network) obtained his Bachelor's in Economics and Social Sciences at Bocconi
University. Currently enrolled in the Master of Quantitative Economics and Finance at
St.Gallen University, his research interests are Impact Investing and Social Finance.
Assessment’s Development Team
15
Technical partner in the area of Agroforetry and Conservation
1 Research Assistant will be responsible for the desk research, questionnaire
review, scheduling in-depth interviews, structuring data for analysis, graphs
development, texts. Candidates should be from the area of agribusiness (master
or PhD level) and fluent in Portuguese, English and Spanish.
1 Project Trainee aiming at engaging new talents into the topic, a trainee from
either bachelor or master level will be invited to be part of the study team. Good at
preparing presentations. Fluent in Portuguese and English.
Third Parties
Visual media specialist - Case studies visual reporting – video and pictures
Online media responsible – For the webpage development
Media Relations
Assessment Development Team
16
Cecile Koller (Lima, Peru) Director at ResponsAbility Latin America
Andrea Minardi (São Paulo, Brazil) - Venture Capital professor a Insper Business
School
Amandine Favier (Zurich, Switzerland) WWF – Sustainable Responsible Investing
(tbc)
Jaap Bos (Maasstricht, Netherlands) Impact Investing and Blended Models
professor and the University of Maastricht and originally from EU Central Bank
(tbc)
Joe Koechlin (Cuzco, Peru) – founder of InkaTerra (tbc)
Editorial Board
The editorial board is formed by prominent experts in the area of agroforestry,
restoration, conservation and finance. They have volunteered to provide advice
about the study structure, case studies selection and analysis, provide feedback
about study conclusions as well as be an ambassador of the study and support
identifying other conferences where it could be presented.
17
Annexes
18
In 2010, emissions from agriculture, forestry and other land use accounted
for around 25% of total greenhouse gas (GHG) emissions. While, agriculture
alone accounts for 10-12% of GHG emissions, forestry and other land use
account for another 12%.
(1) LULUCF: Land Use, Land Use Change, and Forestry
(2) Includes emissions from on-farm energy consumptions as well as from manufacturing of farm tractors, irrigation pumps, other machinery, and key imputs
such as fertilizer. It excludes emissions from the transport of food.
Source: Climate Action Now – Source for Policymakers 2015 (United Nations Climate Change Secretariat)
Why Sustainable Investing in Agroforestry
19
(3) http://www.bmub.bund.de/fileadmin/Daten_BMU/Download_PDF/Klimaschutz/joint_statement_redd_cop21_en_bf.pdf
Picture source: Climate Action Now: Summary for Policymakers 2016 (United Nations Climate Change Secretariat
While with the expected temperature rise from 1 °C to 4 °C by 2050 will
affect agriculture yields (picture below), at the COP21 leaders from Germany,
Norway and the UK announced to provide over USD 5 billion from 2015 to
2020 if countries that have large forest areas demonstrate measured,
reported and verified emission reductions(3)
Why Sustainable Investing in Agroforestry
20
(4) The Amazonia Legal is the largest socio-geographic division in Brazil, containing all 9 states in the Amazon basin. The region was created
in 1948 based on studies of the Brazilian government on how to plan the economic and social development of the Amazon region.
In the period from 2015 – 2016 there was a 30% increase in the level of
deforestation in the Brazilian’s “Amazonia Legal” (Legal Amazon)4, as
show in the graph below.
Why Sustainable Investing in Agroforestry
Source: Prodes/INPE, 2016
21
Sustainable Investments in Agroforestry directly contribute to 6 of the 17
Sustainable Development Goals (SDGs) to be reached by 2030. Indirectly,
agricultural investments cover nearly every goal, as they address BoP
populations.
Maximising
Sustainable
Development
Why Sustainable Investing in Agroforestry
22
Sustainable Investing encompasses ESG criteria, Social Responsible
Investing (SRI) and Impact Investing. The financial threshold is at least
return of the invested capital; and the values-drive one is the intentionality
that investment generates positive measurable socioenvironmental impact.
Our understanding of Sustainable Investing
Source: Based on Sustainable & Impact Investment - How we define the market, Bridges Ventures (2012)
23
angelica.rotondaro@alimi.com.br
+55 11 98010 2299
Contact
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