Looking south: Latin America offers sustainable investment opportunities.As the American economy continues to lag, more and more socially and environmentally responsible investors are looking south to find promising venture capital opportunities. While much of the rest of the world is bogged down in recession and cowed by the specter of terrorism, Latin American businesses are operating in a relatively sale and fast-growing economic climate friendly to sustainable development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union and still rich in virgin natural resources. A small cadre of environmentally conscious venture funds--most of which feature a nonprofit component--have already invested almost $2 billion in sustainable forestry Sustainable forestry is a forest management practice. The basic tenet of sustainable forestry is that the amount of goods and services yielded from a forest should be at a level the forest is capable of producing without degradation of the soil, watershed features or seed source , organic agriculture, renewable energy Renewable energy utilizes natural resources such as sunlight, wind, tides and geothermal heat, which are naturally replenished. Renewable energy technologies range from solar power, wind power, and hydroelectricity to biomass and biofuels for transportation. and other green businesses in the region, and are poised to make significant returns over the coming decades. Individual investors are still welcome to invest in many of these funds. Green Pioneers "When we started to invest in green businesses in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. six years ago, there was no one," says John Michael Forgach, president of the A2R A2R Ag2r Prevoyance (Tour de France cycling sponsor) Fund Management Group, which has committed $205 million for Latin American green businesses to date and hopes to boost that number to $500 million by 2005. "We were considered the clowns, the dreamers, the romantics," he adds. Today the field is a little more crowded, thanks in large part to New Ventures, a program of the World Resources Institute's Sustainable Enterprise Program, which connects investors with sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. leaders to promote the development of profitable solutions to environmental and economic challenges in Latin America. New Ventures convenes Investor Forums twice a year in different Latin American countries List of American countries Nations:
Costa Rica based EcoEnterprises Fund, established in 2000 as a joint venture of the Nature Conservancy and the Inter-American Development Bank Inter-American Development Bank (IDB) international organization founded in 1959 by 20 governments in North and South America to finance economic and social development in the Western Hemisphere. , is one of the frequent venture capital participants at the forums. The fund invests seed and expansion capital in small to midsize companies in Latin America and the Caribbean and focuses on ecotourism e·co·tour·ism n. Tourism involving travel to areas of natural or ecological interest, typically under the guidance of a naturalist, for the purpose of observing wildlife and learning about the environment. as well as sustainable agriculture and forestry. EcoEnterprises prefers to fund ventures that are unable to secure financing from conventional sources due to their small size and innovative nature. To ensure adherence to strict standards for biodiversity conservation, sustainable use and community involvement, each venture in the fund's portfolio must collaborate with a nonprofit conservation or community organization on an ongoing basis. Investors have already committed $10 million to the fund, but managers hope to marshal an additional $15 million in the next few years. By 2010, the Fund will have invested in approximately 20 small- to medium-scale ventures. Private and institutional investors may participate in the EcoEnterprises Fund by purchasing shares or making a charitable contribution charitable contribution n. in taxation, a contribution to an organization which is officially created for charitable, religious, educational, scientific, artistic, literary, or other good works. toward its work. According to EcoEnterprises President Tammy Newmark, "Environmentalists are paying more attention to the ways that market forces can be used to help protect nature. From helping to conserve rainforest habitat for jaguars to restoring and cultivating degraded lands, these companies are proving that business and the environment can advance common goals. Each successful venture also strengthens nonprofit organizations and creates economic alternatives for local people." Seed Money Another major player in this new field is the Environmental Enterprises Assistance Fund (EEAF EEAF Environmental Enterprises Assistance Fund EEAF Eth Evc Adaptation Function ), which has invested more than $85 million to date in Latin America. The fund, established as a nonprofit in 1990, works to develop sustainable growth in emerging markets by capitalizing smaller, private-sector businesses that can serve as replicable models for local entrepreneurs and investors. EEAF manages three Latin American funds that invest in organic agriculture, sustainable forestry and aquaculture aquaculture, the raising and harvesting of fresh- and saltwater plants and animals. The most economically important form of aquaculture is fish farming, an industry that accounts for an ever increasing share of world fisheries production. , renewable energy, energy efficiency, recycling, pollution abatement and nature tourism. As lucrative green investment opportunities in the United States become harder to find, socially conscious investors are doing better than ever by doing good in Latin America. While U.S. venture funds like investors to commit millions of dollars, the Latin American funds tend to be less stringent in this regard, with some even welcoming small sums. Individual investors looking to jump on the bandwagon can contact any of the green venture funds working in the region to find out how to get involved. CONTACT: A2R Fund Management Group, www.a2r.com.br; EcoEnterprises Fund, www.ecoenterprises fund.com; Environmental Enterprises Assistance Fund, www.eeaf.org; New Ventures, www.new-ventures.org. RODDY SCHEER follows market developments from his post as E's webmaster. |
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