Allison Langille

A Market for Preservation: Tropical-forest friendly products, entrepreneurship and consumer choice

On behalf of WWF Switzerland, Ennovent is managing the Tropical Forest Challenge, which will identify best for-profit solutions having a positive impact on tropical forest biodiversity from around the world. This is the second of two posts focused on for-profit eco-enterprises. The first is available here.

The destruction of arguably the earth’s most lush, vibrant and environmentally important ecosystem – tropical forests – is frequently attributed to uncaring local communities that live amongst these impressive landscapes.

Yet, looking closer at rural life in most of the 75 countries around the world that contain tropical forests, the reality is that most communities are caught in a cycle of persistent poverty, and are simply trying to get by.

What this usually means is putting the needs of their families – such as food, water and fuel – before that of environmental preservation. If clearing a patch of tropical forest to plant soya beans for animal feed ensures a farmer a lasting source of income, then this is what he will do.

“The current economic environment or the market forces are driving tropical forest destruction because it is more profitable to convert a tree into furniture,” says India-based environment and social enterprise expert, Shashank Verma.

The communities, which have been living amongst these rainforests for centuries, are not happy to cut down the trees – quite the opposite. Yet, faced with viscous poverty and unemployment, they are left with little choice.

Verma puts it simply: “We need alternate economic incentives for these local communities to keep the rainforests protected.”

In addition to the work that NGOs and governments are doing to identify mechanisms to protect tropical forest biodiversity over the long-term, for-profit enterprises are emerging as important alternatives to income generation, and tropical forest preservation.

For example, instead of clear-cutting, perhaps it is more profitable to process exotic forest fruits for resale as juice or as a nutritional diet supplement. And if fruits aren’t viable – perhaps transforming gum-derivatives contained within the forest into organic chewing gum is another option.

“The reality is that there are endless opportunities for rural entrepreneurs to both generate an increasing income and have a positive impact on local tropical forests,” notes Verma.

More and more, thanks to education and outreach, farmers and manufacturers looking to earn an income are recognizing – even if from a self-interested point of view – that forest degradation isn’t always the answer. The message is becoming clearer that for-profit business models can harness the power of the forests, while also ensuring their longevity.

And Verma would know. After graduating from Oxford University in 2005 with his MBA, he helped found CleanStar Energy, a social enterprise that focuses on CleanStar’s model aims to transform non-farming “wasteland” in central India into plentiful fields of Pongamia trees. Cleanstar works with local farmers to extract the vegetable oil and sell it for use in low-speed diesel generators. It also makes use of the remaining seedcake, producing it into briquettes of bio-coal, which gives local stakeholders a source of income. (Check out a past post on CleanStar here).

Verma has seen firsthand how providing a remote community with options – such as alternative sources of income – can have a positive impact on the environment.

However, once a viable enterprise establishes – either by design or by necessity – some variation on triple bottom line returns (social, environmental and economic), entrepreneurs are finding that they need additional support to ensure the longevity of their business. “The biggest challenge that I have seen with social entrepreneurs in this context is building a community to gain visibility of their work – for investment and as a solution to a global issue,” says Verma.

As many entrepreneurs addressing tropical forest biodiversity are in remote parts of the world, for example in rural Uganda where there is limited Internet access year-round, they are often cut off from a base of green consumers and investors required to grow their business and ensure the commercial viability and lasting environmental impact of their business.

Recognizing this, WWF Switzerland recently launched the Tropical Forest Challenge, which aims to identify the best for-profit solution – an idea, start up, or company – having a positive impact on tropical forest biodiversity. The Challenge is running through Sept. 30, with a winner in each category announced in December 2012.

“I think the visibility that applicants will get from a Challenge like this is really exciting,” says Verma. “I think it will offer many entrepreneurs their first chance to link up with like-minded organizations to boost collaboration – either for new business ideas or funding opportunities. This is quite powerful.”

What it comes down to is options – local communities in tropical forest-rich countries do not want to actively destroy these important resources, but in many cases they have no other choice. However thanks to the work of NGOs, governments and proven success stories – like CleanStar Energy – entrepreneurs are realizing that deeper opportunity for income generation and tropical forest preservation exists.

And when considering options, it can’t be overlooked that consumers have the ultimate choice. We can choose to buy organic coffee or organic chocolate that has been sustainably harvested and will help preserve the rainforests – or not.

However, if we choose the former, we are directly condoning the decision made by farmers, manufacturers working to increase their incomes, while also preserving the tropical forests they call home.

Agriculture, Energy, Transportation
business development, renewable energy, transportation