You Know It When You See It
What if you were sitting in a large reserve of a unique tropical forest ecosystem, listening to the bird ruckus of endemic species, when you suddenly realized you were in fact sitting among the integrated assets of a profitable company?
What if you discovered that those assets were only valuable because they were a living part of this biodiverse ecosystem, not because they were going to be cut or caught and removed?
What if this was a new company formed by a 100-year old industrial conglomerate that was more known for its steel and cement than its orchids and butterflies?
And what if, in that forested company, you found yourself among scientists from around the nation converging to share data and expertise on everything from eradicating malaria to restoring urban tree populations with native species?
And as if that weren’t already enough, what if in that same forest where you heard the bird ruckus, you then heard an orchestral performance by a hundred musicians from a nearby city, spanning six decades in age, with diverse socio-economic backgrounds and widely varied musical educations, who brought Beethoven, the Beatles and Brazilian music to a raptured audience of those same scientists, joined by local politicians and corporate partners?
Would you be freaking out? I was. As was my friend Juliana Lopes, intrepid advisor on business and climate change, who joined me on an adventure that was all of those what-ifs, and more.
Before setting out on our journey to the Legado das Águas, a two-hour journey that began at 5:45am this past Saturday in São Paulo, Brazil, to arrive ahead of the day’s scientific and community presentations in the world’s largest reserve of Mata Atlântica (Atlantic Forest), Juliana and I joked that we didn’t have any expectations for the day. We knew it was an early start for an event in the forest with scientists and an orchestra, so of course we said, “Yes!” We had no idea what we were in for.
What Does an Innovative Business Model Actually Do?
The Legado das Águas — or “Legacy of the waters” — was already on my radar, having learned about this emergent business model from the pioneering botanist and urban landscape designer, Ricardo Cardim, whom I featured in an earlier blog post where we explored his unique Floresta de bolsa or “pocket forest” approach to regenerating São Paulo’s urban forests. Having heard about the Legado from Ricardo (who collaborates with the business to develop its seedling supplies), I spent a day mountain-biking in the reserve earlier this year, taking advantage of one of the easier to explain services the company offers: eco-tourism.
But that little dabbling only hinted at what this fledgling — yet already financially promising — company has in store. In fact, it’s so progressive and far-reaching that it’s hard to state what it actually is. It’s as if they’re composing the future vocabulary of regenerative business and the ink isn’t yet dry. Following are some highlights of the business* to give a hint of what lies ahead:
The business maps and markets genetic material. By genetically mapping genes taken from species found in the forest, they have created an important proof of concept in biotechnology, which is of potential interest within the cosmetics industry, and may be of interest to others such as the pharmaceuticals industry.
The business welcomes tourists. There were five bird-watching events throughout 2017 as part of the evolving eco-tourism offering, taking advantage of the fact that there were 291 bird species observed, of which 40% were endemic. New mountain-biking and hiking trails await visitors in 2019.
The business sells seedlings. For example in 2017, 3.25 hectares of Salto de Pirapora in the interior of São Paulo state were planted with more than 7,000 seedlings of different native species, trees and bushes using seedlings from the Legado das Águas nursery; the nursery also provided more than 10,000 seedlings to the Gabriel Chucre Park situated in Carapicuíba, a part of Greater São Paulo.
The business cultivates biodiversity. As an example of just one facet of enabling biodiversity, 208 orchid species have been catalogued of which 12 are endangered and one was thought to have been extinct; many of these are rescued from fallen trees and cultivated in the orquidário (a word that means “place where orchids are cultivated”). Increased biodiversity underpins the value created in all the other business lines.
Beyond “Sustainability”
As a consultant who works with large companies to shift towards an economy that delivers on our needs while restoring ecosystems, I am constantly on the lookout for innovative business models that do this by design, as opposed to retrofitting good ideas into models designed for other things (like maximizing profit). At the moment, such business models are about as rare as some of the orchids we saw on Saturday.
Of course there are lots of great intentions out there, with many companies setting ambitious goals and putting resources and plans in place to meet these goals. But if I’m honest, much of what I see today still falls into the harm reduction or strategic philanthropy camps, and a lot is still plain and simple greenwash (or one of my favorite Brazilian expressions: papo furado, aka empty talk). Even many of the leaders we point to today still don’t typically have business models that can legitimately be described as being more profitable because of ecosystem regeneration. This is so true that when I ask people if they see examples of this idea in action, unfortunately, they often instinctively laugh.
Yet that is exactly the design behind this business that spun out of the large industrial group, Votorantim, which celebrated its 100th birthday this year. Until recently the company consisted of fairly traditional businesses, generating value within a range of industry verticals from electric power to cement to eucalyptus pulp. But in 2012 they created a new business, taking advantage of a large reserve of Mata Atlântica owned by Votorantim. Approximately 31,000 hectares had been set aside early in the last century to create a series of hydro-electric power dams (some of which are still in operation today) to service the energy-intensive aluminum business within the group. This was a strategic decision based on a recognition that without thriving forests, the waterways would lose volume and the ability to generate power in the region would be compromised. It was a solid business decision, and it also resulted in the allocation of what is now the largest relatively undeveloped tract of the Atlantic Forest biome.
I don’t take lightly the impact that dams have on waterways and wildlife, so I won’t pretend that there has been no effect on the forest or that we need more dams in the world. But that infrastructure was laid down in the 1940s. The willingness of the parent company to look forward to the next century and lay down a new kind of infrastructure — one that is holistic and community-based, that recognizes the intrinsic value of thriving, native ecosystems — is a genuine innovation in the right direction.
A Brave — And Better — New World
The orchestra in the forest that day was the culmination of a two-day event where scientific findings and community stories were shared at the small facility inside the reserve. After the presentations, we shifted from the small meeting complex at the company’s basecamp (which includes the nurseries, greenhouses, orquidário, green roof, dining area and dormitory) to a clearing beside one of the dams a few kilometers away. Here a large tent had been set up to shelter the orchestra and its appreciative audience.
Did I mention the orchestra? Orquestra Filarmônica Jazz SENAI Sorocaba is a whole story unto itself, perhaps for another time, although I offer a brief clip below that hints at the conflation of goodness that was that afternoon with those sights and sounds. Suffice it to say this philharmonic ensemble bears an uncanny resemblance to the story of Legado das Águas, illustrating how the richness that comes by fostering diversity creates a self-reinforcing system of goodness that can never be over-estimated.
If I hadn’t seen it myself, I am not sure I would have believed it. But listening to a range of scientists, rain drops, community members, birds, violinists, percussionists, and other people from around the region, I believe it. It is possible to evolve business into the future we want by design. We have a long way to go to make ideas like Legado das Águas the new normal, but if an $8 billion industrial conglomerate can put this kind of bet on the future, then anything is possible.
This is a brief clip of the orchestra performing the Brazilian classic, Emoções (“Emotions”) by Roberto Carlos.
The photos below include a visit inside the orquidário, a tour of the green roof with Ricardo Cardim, and scenes from the orchestra.
* These highlights include figures sourced from the company’s 2017 annual report which offers more facts and figures about Legado das Águas’ business.