Study identifies weaknesses in support for social and environmental businesses in Amazon Rainforest

After mapping local enterprises in the Amazon, Graziella Maria Comini, a professor at the School of Economics, Administration, Accounting and Actuarial Science at the University of Sao Paulo, identified weaknesses in these businesses and the need for higher investment in the region to allow these firms to expand geographically.

The study was published in GV-Executive, a journal produced by Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP). It presents the initial results of a mapping exercise carried out in the Amazon region, helping identify actions required to strengthen social and environmental businesses in northern Brazil.

The goal of the research was to map enterprises in the Amazon and to understand what has been done in the region to promote bioeconomy initiatives. The author focused on social and environmental enterprises, which she believes have an ideal business model to address these issues.

Most of the mapped enterprises are based in the states of Pará and Amazonas, few of them are in the “traction” and “scaling up” phases, and the bulk of the social and environmental businesses have a “social logic” and institutional mechanisms for collective participation.

According to Comini, the only public database of social businesses in Brazil was produced by Pipe.Social, a platform that maps and connects impact businesses. The last survey indicated the existence of 1,300 social enterprises in Brazil, but only 39 or 3% were in the North region.

Breakdown of social and environmental enterprises in Brazil’s North region by state

Most of the social and environmental businesses in Brazil’s North region are located in the states with the largest economies, namely Pará (33%) and Amazonas (24%). The most mature enterprises in terms of business development stage and scale were also observed in these two states. In the other states (Maranhão, Acre, Mato Grosso, Rondônia, Amapá, Roraima and Tocantins), the businesses are predominantly in the initial stage of development, in the ideation and prototyping phases.

Considering the study’s analytical frame of reference, all the social and environmental businesses mapped in the research can be understood as having hybrid organizational models, but the results were not homogeneous. Most of the businesses have a logic based on the concept of social entrepreneurship but there is a shortage of resources and investments in the sector.

Future prospects

According to Comini, the study found that the Amazon’s social and environmental business ecosystem is fragile and there are institutional gaps in most states, as only Pará and Amazonas have projects in the traction and scaling up stages.

“Social and environmental businesses play an important role in overcoming social, economic, technological and environmental problems in the Amazon region. However, in order to become agents that promote sustainable development, they need to be strengthened, while respecting different existing legal formats (companies, associations or cooperatives),” the researcher explains.

She believes it is fundamental and necessary for the region’s businesses to be strengthened. This means going beyond theory and applying it in practice. Comini says that the path ahead will likely be arduous, as there is a risk that these enterprises will not reach the scaling up phase if they do not obtain support from public and private sector business promotion organizations. That is why it is essential to increase the number of accelerators that encourage the creation of social and environmental ventures.

To read the full article, click here.