Through this support, Radix will begin a transition from a monoculture system to a mixed forestry model, planting a larger number of species and focusing particularly on including native trees.
The same month when the Brazilian government relaunched its Amazon Deforestation Prevention and Control Action Plan, greentech firm Radix Investimentos Florestais received extra support from Fundo Vale to bolster its new forestry operations, through a philanthropic grant of around R$1.3 million. These resources will allow Radix to transition from a monoculture system to mixed forestry, generating financial and environmental gains by preserving and restoring Amazonian regions and promoting biodiversity. The objective is to test a new investment model with greater positive environmental impacts, involving a public offering of shares, which will be open to individual investors.
According to Gustavo Luz, Fundo Vale’s director, the support for Radix to implement a habitat recovery model, now based on mixed forestry, adds to the portfolio of activities of the nonprofit association funded by Vale, which already supports cooperatives and impact businesses that use agroforestry and agro-silvopastoral systems. Philanthropic support for Radix is an additional option aimed at achieving Vale’s Forest Goal of protecting and restoring 500,000 hectares of forests in Brazil by 2030. Of this total, 400,000 hectares of existing forests will be protected and 100,000 hectares of habitat will be restored by supporting businesses with positive social and environmental impacts.
“Radix, which is democratizing green investments and restoring areas through the planting and sustainable management of forests, was selected for its operational capacity to recover habitat and, above all, for its innovative solution to unlock access to forest investments, so that it can reach more people in this movement and amplify the impact of our actions,” says Gustavo Luz.
The company has 200 hectares under cultivation in Roraima and Minas Gerais, growing African mahogany, divided into modules and offered in the form of accessible shares through crowdfunding. To date, 950 shareholders have bought forestry assets from the startup. Radix will use Fundo Vale’s grant to begin the transition from a monoculture system to a mixed forestry model, planting more species, with a special focus on including native species.
“Each species has a distinct role in the recovery process, in terms of ecosystem services, such as better fertilization, decompression or greater deposition of carbon in the soil. Likewise, each species is suited to specific land characteristics, such as flooded or highly compacted soil,” explains Gilberto Derze, founding partner of Radix.
Implementation will begin with the planting of African mahogany, teak, Brazil nut tree, paricá, andiroba, pau-rainha, guanandi, roxinho and balsa, followed by ipê, maçaranduba, cumarú, angelim, freijó and cedro, among other species. The company will protect biodiversity by preserving and maintaining trees threatened by overexploitation and harvesting the timber in a balanced way, so that the forest always remains intact.
“Radix is a reforestation company that has been working mainly with African mahogany plantations. The current project aims to promote and test the viability of a mixed and heterogenous agroforestry system, involving the planting of 11 species native to the Amazon over the course of 20 years, starting with at least two native species in the first year. Even though the purpose is commercial exploitation, this type of forestry generates positive ecological impacts during its cycle, reaching a process of perennial renewal in the long term, with regular harvesting and replanting points,” says Maria Otávia Crepaldi, the project manager for forests and land use at Palladium, one of Fundo Vale’s partners in the implementation of the 2030 Forest Goal.
“Radix’s expertise in forest management, its own equipment and its qualified staff facilitate the transition process, even more so in the Amazon region, which lacks these resources. Fundo Vale’s philanthropic support gives us the conditions to implement this system securely, with technical and financial support to expand our team and invest in seedlings and fertilizers and thus reach our goal of planting 1 million trees by 2030,” says Radix’s Gilberto Derze.
Based on the experience gained in previous years and its track record as an impact investor, Fundo Vale promotes businesses that offer an attractive balance between risk, return and positive social and environmental impacts related to land use. “We aim to conserve an area equivalent to 400,000 soccer fields and restore another 100,000 soccer fields. Radix is one of the enterprises chosen to perform a proof of concept, as part of our Forest Goal business portfolio,” says Gustavo Luz.
New model expands positive environmental impacts with financial return on green investment Through a diverse mixed forestry system, Radix investors will also benefit from a higher expected return compared to the company’s previous model, as well as earlier and more frequent revenues. “African mahogany can be harvested after 18 to 20 years, while other trees have different felling times. By including species with a shorter cycle, such as balsa and paricá, which will remain in the system for five and 10 years, respectively, we will carry out forest management to allow early harvesting without harming the established forest system,” Derze explains.