Another Major Milestone for Brazil?s Sustainable Finance Sector
The triple-bottom-line focused Stratus VCIII fund announced its first investment this morning, a major milestone for the firm and more good news for anyone watching the growth of Brazil’s sustainable finance sector. The company, Ecosorb Environmental Protection Technology, serves as an environmental consultant to major infrastructure projects and operations.
As a timely reminder of the growing importance of this sector, Ecosorb led an emergency response team to contain the impacts of a commercial tow-ship that sunk in Porto de Santos, SP, just days before the announcement from Stratus. The company proved its value by dramatically minimizing the environmental impact of the damaged vessel, safely containing hazardous materials and working to resolve the situation as quickly as possible.
“This is a very strong first investment for us,” says Philippe Lisbona, manager of the S?o Paulo-based VCIII fund, “there were three major factors leading to our selection of Ecosorb as an investee.” One primary reason, Philippe explains, is the impressive growth of the environmental technologies and services sector, which has become a R$5-6 billion market.
The niche in which Ecosorb began operating, emergency response systems, was essentially created in Brazil in 2001 following regulations requiring an environmental component for new infrastructure projects. In a mere six years since, Ecosorb has become a key player in what is now a R$200 million annual market, with three strategic response units providing precision monitoring technology to minimize the impacts of any industry-related environmental disasters.
Another important factor is the first mover advantage for Stratus entering a sector that will grow increasingly important as governments place greater emphasis on environmental protection. Ecosorb is primed for strategic growth as the company plans to open eight new response units and aggressively expand its consultancy services, providing valuable risk assessment services for a range of new infrastructure projects including highway and rail construction.
Finally, Philippe stresses that Ecosorb is run by a highly skilled management team led by Eugenio Singer, founder of the successful consultancy firm ERM do Brasil, who will support the company’s strong corporate governance policies in his new appointment as CEO.
As a first investment, Ecosorb makes an important statement about Stratus’ role in the nascent world of “green” investing. The company is positioning itself as a leader in environmental risk mitigation, an issue that regularly makes national headlines and is becoming a focal point for many government officials and executives.
The foresight of Philippe and his colleague, Wagner Duduch, is evident in the fact that they have acted upon a trend in the financial community toward blurring the lines of sustainability and profitability, finding the blended value in each. With its mixture of traditional VC sensibilities and innovative, SME-oriented finance mechanisms, Stratus is joining the ranks of a generation of new investors finding market solutions to the most important environmental challenges.