Guest Blog Post by Perzen Patel of Ennovent, a global organization that accelerates innovations for sustainability in low-income markets.
Tropical forests are critical global ecosystems. Not only do they represent an incredible wealth of biodiversity, play an important role in storing carbon and help to control various diseases, but tropical forests also provide a source of income for many indigenous communities living in their boundaries.
However, around the world tropical forests are being destroyed by harmful activities – such as slash and burn agriculture and the growth of extractive industries.
Recognizing the need to identify sustainable solutions to tropical forest conservation, WWF Switzerland launched the WWF Switzerland Tropical Forest Challenge in May 2012.
The objective of the WWF Switzerland Tropical Forest Challenge – which was managed by Ennovent – was to discover the best for-profit solutions from around the world in the Company and Startup categories that have a positive impact on tropical forest biodiversity.
For low-income communities that live amidst tropical forests, often conservation becomes akin to taking away their livelihood. Therefore, the Challenge aimed to discover sustainable innovations that not only conserve forests but also allow these communities to earn an equitable income.
After more than five months of searching, 306 nominations, 77 applicants, over 2,300 public votes and the involvement of 42 experts in the fields of forestry, development and business, Ennovent and WWF Switzerland announced the winners and finalists of the Challenge.
Runa, co-founded by Tyler Gage, creates US markets for guayusa tea and was selected as the winner in the Company category of the WWF Switzerland Tropical Forest Challenge.
Runa was started in 2009 after Gage discovered that guayusa (pronounced “gwhy-you-sa”), a native holy species that grows throughout the Ecuadorian Amazon, had a unique mix of antioxidants and caffeine. Guayusa naturally contains as much caffeine as coffee and double the antioxidants of green tea, with a distinctly smooth, clean taste.
After significant testing (using himself as the first test subject given his high caffeine sensitivity) and market research, Gage learned that there was a solid market for energy products and tea in the US especially – of which guayusa was both.
Runa uses a Fair Trade mechanism to create international markets for guayusa tea and to mutually reinforce the priorities of income generation and sustainable natural resource management.
To facilitate their supply, Runa partners with farming families to grow guayusa in organic agroforestry systems. The company then creates economic incentives for the appropriate management of natural resources by purchasing the guayusa at a guaranteed minimum price from the farmers.
Runa’s market-based approach and commitment to creating a viable business model has resulted in a self-sustaining organization. The company now boasts a network of 3,000 retailers and an international staff of more than 60 employees. Not only that, the company has increased the incomes of their 2,000 network farmers by at least 30% since inception, teaching them the building blocks of sustainable land management along the way.
In addition to Runa, there were four other finalists within the Company category that are also setting examples of innovative approaches to tropical forest conservation that can be implemented globally. These were:
- Chicza – a consortium in Mexico that works to protect the forests through the harvesting, transformation and commercialization of Chicle gum
- Ecoplanet Bamboo – an organization that addresses deforestation and rural poverty through the use of responsible capital to develop commercial bamboo plantations in Nicaragua and South Africa
- Rainforest Expeditions – an ecotourism company that operates three lodges in Peru
- Wildlife Works – a company that pioneered the use of REDD+ credits to finance large-scale tropical forest conservation programs in Africa
In comparision, the winner of the Startup category, Planting Empowerment uses another kind of innovative business model to conserve tropical biodiversity.
Planting Empowerment provides alternative income streams for indigenous and smallholder farmers who traditionally live off slash and burn agriculture – an activity that destroys tropical forests. Recognizing the link between rural poverty and deforestation, Chris Meyer and his partners designed a business model to help rural communities profit more sustainably from their natural resource endowments.
Meyer was fascinated by the economics of the teak boom. Companies were buying up deforested land, planting thousands of non-native teak trees, and selling it to European investors for USD 30,000/hectare (without land ownership). Based on his finance training, Meyer estimated that at least half of the sale price was arbitrage. Furthermore, the plantation companies only encouraged migratory deforestation by encouraging smallholders to sell out and move further into the rainforest.
Instead of purchasing land like the majority of forestry companies, Planting Empowerment leases land from indigenous communities and small landholders to encourage land tenure. The leases are structured to assist with income generation and provide an incentive to actively participate. After the first plantation cycle ends, their goal is that land lease partners will have the capital (from profit sharing) and technical capacity to manage their own agroforestry plots – but with complete ownership.
Meyer says, “In the long-term we aim to work ourselves out of jobs by training local counterparts in forestry management so that after the first harvest cycle, the local partners can manage their own profitable forestry projects and receive 100% of the profits.”
Planting Empowerment’s results have been impressive. Since the first sapling was planted in 2007, the company has planted 27,500 trees (25 hectares) of at least eight different species that have sequestered approximately 540 tons of CO2 to date.
The finalists of the Startup category in the WWF Switzerland Tropical Forest Challenge were also equally as impressive in their efforts to conserve tropical forests. They included:
- Eco-Fuel Africa – a startup that trains Ugandan farmers to turn farm waste into clean burning fuel briquettes, which are sold within the community by empowered women entrepreneurs
- Maya Mountain Cacao – an organization that sources premium cacao from farmers in Belize for specialty chocolate makers
- Ecotech Timber – a natural resources management and renewable energy development company in Sierra Leone
- Floresta Holdings – a startup which designs, finances and develops two of the world’s largest forest carbon programs in Indonesia and Brazil
While the businesses these organisations have created are different, all of them aim to promote the importance of conserving the world’s tropical forests through sustainable business models. These enterprises set the bar for entrepreneurs looking for opportunities to address the pressing issue of tropical forest depletion and make an impact on people living in low-income markets.
Not only are the winners and finalists of the WWF Switzerland Tropical Forest Challenge conserving the forests but they are also creating new – and in many cases more profitable – income streams for indigenous communities.
Learn more about the innovations discovered in the WWF Switzerland Tropical Forest Challenge here