Sustainable Investments Are Not Always What They Seem

Friday, September 22, 2017

Have you ever booked a flight and dwelled on whether to tick the box to support a carbon offset project? Or been reassured by a news article about the wonders of projects like forest plantations in Africa, which seem like win-win-wins for people, profit, and the planet? Me too.

Or at least I did until I went to Mozambique last month. I took some time off work to visit the incredible Gorongosa National Park, and volunteer for the Business and Human Rights Resource Centre, on whose board I serve. Together with a colleague from Brazil, I set out to learn more about the framework for business and human rights in the region, and explore a complaint filed by local communities against a company that is using thousands of hectares of community-owned land to monocrop trees—grow a single crop year after year on the same land—for biofuel and export markets.

In Mozambique, like many other African countries, the national government wants to increase foreign direct investment. Foreign companies love cheap or free land. Benefits to investors and consumers include higher land productivity and carbon sequestration. Government may see benefits in developing the economy, and local government officials sometimes get rewards (although the more local they are, the less they may get—perhaps a new building or, as we heard in one case, a bicycle) or a promise (revenue once the company begins earning profits or better health and education services). Sometimes there’s a simple pay-off of individuals to overlook regulations or follow the lead of a higher level of authority.

Photo courtesy of Pavel Ahmed.

Source: Stanford Social Innovation Review (link opens in a new window)

Environment, Investing
ESG, global development