The bet on sustainability is no longer a competitive advantage. Faced with challenges posed by global warming and the international mobilization aiming at reducing carbon emissions, investment in clean and renewable fuel sources, the market for offsetting greenhouse gas (GHG) emissions, and agricultural production based on more environmentally-efficient practices will become the standard in the next decade.
This trend is often summed up by an acronym: ESG, which means Environmental, Social, and Corporate Governance. This umbrella term now identifies organizations that include in their processes the identification, assessment, and management of risks and opportunities related to sustainability and the environment—in all the links of their production chain (including products, customers, suppliers, and employees).
According to a PwC report, estimates show that by 2025, 57% of mutual fund assets in Europe will be in portfolios that consider ESG criteria, representing US$ 8.9 trillion, compared to 15% at the end of 2021. For example: in August, the European Parliament approved a package that includes the Carbon Border Adjustment Mechanism, a tax instrument on carbon-intensive products imported by the European Union (EU). In other words, sustainability will become a prerequisite for good business in the international market.
Potential to explore
Brazil has a huge competitive advantage. With 58% of its territory covered by forests, 12% of the world’s water reserves, and an energy mix with 84% of renewable sources, the country has immense potential to stand out on the international scene. However, this potential is not reflected in investment rates. Currently, only 4.5% of the available resources in climate funds reach the region of Latin America and the Caribbean, and a fraction of that reaches our country.
Much of this imbalance is related to a still incipient number of robust projects and, mainly, to the lack of essential international certifications for those resources to be drawn to the national territory.
Neexgreen positions itself precisely bearing that context in mind. The initiative brings together rural producers, businesspersons, and investment fund representatives who believe and invest professionally in ESG concepts. The bet: purchasing forest areas in different biomes, certifying these green areas according to the strictest international standards, and starting to operate actively in the carbon credits market.
Thus, Neexgreen intends to be a company of forest assets. It purchases forest areas, certifies reserves, ensures and verifies preservation, and sells the surplus carbon, including on stock exchanges. Neexgreen is a company that positions itself in an ecological-economic green system.
The carbon market functions through the sale of credits by companies that have reduced emissions to those that have not yet reached GHG reduction goals. One credit conventionally corresponds to one ton of CO2.
In 2021 alone, according to the World Bank’s State and Trends in Carbon Pricing 2022 report, transactions in the carbon market reached US$ 84 billion. Another study, called Seizing Brazil’s Climate Potential, carried out by the Boston Consulting Group, shows that in this sector Brazil can attract up to US$ 3 trillion in the next 30 years.
Partnerships and consultancy
Besides acting in the purchase of forests and consolidating itself as a leading player in the Brazilian carbon market, Neexgreen also intends to set partnerships with rural producers in search of new safe income sources in this segment. This will happen in projects linked to the sustainability of rural properties and in power generation from clean sources.
For that, Neexgreen provides expertise in obtaining certification of preserved areas and additionally points out ways to encourage the production of sustainable energy, whether wind, solar, or even from the use of groundwater for irrigation.
Therefore, besides taking advantage of the huge national potential in the sector, Neexgreen is positioned as an ally of the country in the mission to meet the goals Brazil committed to in international environmental conventions, to reduce carbon emissions by 37% by 2025 and 50% by 2030, starting from 2005 rates.