Interview: Sustainable Policies in the Amazon Benefit Business

ProMarket spoke with Natura & Co Latin America’s Global Sustainability Director Denise Hills about how her company, industry at large, and Brazil benefits from sustainable policies in the Amazon.

During the last four years, Brazil has registered record rates of deforestation in the Amazon rainforest and other Brazilian biomes, putting at risk the country’s main and most undervalued commodity: its biodiversity. Denise Hills, the global director of sustainability at the Latin America subsidiary of cosmetics group Natura & Co, explained in an interview to ProMarket why Brazilian forests have more economic value standing up than cut down. She also divulged what the company hopes from the country’s next president, Luiz Inácio Lula da Silva, in terms of environmental policies. 

Despite having more than 5 million square kilometers of tropical forest, raw materials from the Amazon comprise only 0.2% of global exports of biodiversity, Hills said. Illegal activity in the region and the lack of public policies to encourage companies to sustainably explore the Amazon are some of the factors preventing Brazil from reaching its potential.

Hills believes that it is no longer possible to imagine a company that is profitable and unsustainable. She added that an Environmental, Social, and Governance (ESG) agenda should inform all facets of public policies rather than be pursued as an isolated item in many of these bills.

Founded in 1969 and owner of cosmetics brands like Avon, The Body Shop, and Aesop, Natura started to incorporate ingredients from Brazilian biodiversity in its products during the late 1990s. In 2000, the company made the sustainable use of raw materials from the Amazon its main innovation platform. 

Traded on the São Paulo Stock Exchange (B3), the company has been carbon neutral since 2007 and has a goal of being net zero by 2030.

ProMarket: Natura has historically defended the sustainable use of Amazon resources, in contrast to the unbridled exploitation of the region. Is it possible to have economic development and preserve the environment at the same time?

Denise Hills: The opposition between economic development and environmental conservation is a false paradigm. Today, it is no longer possible to imagine a company that is profitable and unsustainable. In fact, the loss of biodiversity is currently one of the greatest threats to the global economy, alongside climate change, as pointed out by the World Economic Forum. It is necessary to change the logic of development in the Amazon region.

Natura has been present in the Amazon for more than 20 years, and we are witnesses to the fact that economic development, social progress, and forest conservation are not incompatible. On the contrary: together, they are the basis of a new productive logic that can boost Brazil’s leadership in the bioeconomy sector and in the low carbon economy, generating wealth, income for local populations, conservation, and greater shared value for all.

Commitment to sustainability guides our strategic direction and integrates our performance management model. Since 2009, the wages of our employees and executives have been influenced by goals that include social and environmental issues, such as carbon emissions and the satisfaction and loyalty of our network of sales representatives. This performance evaluation model now extends to all companies in the Natura & Co group in Latin America, including Avon, Natura, The Body Shop, and Aesop.

Are consumers demanding more from companies in terms of environmental and social responsibility? 

Yes. The pandemic has deepened consumer’s awareness of their shopping habits and the impact their choices have on the world. They understood that the interdependence of all beings became even more evident after this crisis. In this sense, companies have a great challenge ahead, since the longevity of their businesses is, more than ever, linked to their ability to contribute to the evolution of society and its sustainable development. Our concept of “biobeauty” makes this clear: we want to continue developing powerful formulas that benefit our body. At the same time, we also want to help nature regenerate and respect those who inhabit and know the Amazon Forest – the native indigenous populations.

About 17% of the raw material used by Natura currently comes from the Amazon. What is the importance of preserving the region for the company’s business? 

Our business model proves that the forest is worth much more standing than being cut down. Regenerative solutions are viable, both from a technical and commercial point of view, giving local populations more attractive alternatives to other economic activities that generate deforestation. Partner local communities generate income and at the same time become guardians of the forest and of the traditional knowledge that are fundamental for the development of research on bioactivities. 

One of the successful examples of this business model, among many others, is the case of Ucuuba. Before cosmetic use, local communities saw almost no economic value in the ucuubeira tree. This species was on the verge of extinction because it was cut down for the production of broom handles, a product with very low added value. After research, we found that the annual harvest of a conserved tree produces three times more income for families than logging. Instead of cutting down the tree, which only happens once, seed extraction can be done for at least ten years.

Another example is SAF Dendê, the first agroforestry system for palm oil cultivation in the world. Led by Natura since 2008 in partnership with Embrapa (Brazilian Agricultural Research Corporation, a public company linked to the Ministry of Agriculture) and the Mixed Agricultural Cooperative of Tomé-Açu (Camta), SAF cultivates palm oil in Pará in a sustainable way, bringing the culture of this oilseed closer to its original environment in the forest through the association of several plants in the production system. The cultural practices of the areas are based on agroecological management, without the use of pesticides. Today, palm oil produced at SAF has become the main ingredient in Natura Biome, our new brand of bar products.

Deforestation in the Amazon hit a record in 2021. Does the lack of public policies for forest conservation and the dismantling of environmental agencies create an environment of unfair competition for companies like Natura? 

Ending deforestation is an urgent issue that requires collaborative responses and actions and must be a goal of society as a whole.

Beyond the environmental and climate impact, it is important for society to be aware that we are also facing an economic challenge: illegality competes with legal businesses and investments. The impact, therefore, is on the development of businesses and markets that are being structured from the global concern with sustainability and that invest legitimately and respect the laws.

So far, unfortunately, we are far from the ideal path. World-renowned experts have continually warned about the proximity of the Amazon biome’s tipping point when the forest will no longer be able to regenerate. We need to act faster and collectively.

What can be done in terms of public policies so that national companies become more sustainable?

From January to June this year, almost 4,000 square kilometers were deforested in the Amazon, according to the Brazilian National Institute for Space Research (Inpe), reaching a historic record. Among the ten Brazilian cities that emit the most greenhouse gasses, eight are in the Amazon region, according to recent data from the System of Estimates of Emissions and Removals of Greenhouse Gases (SEEG). The North region of Brazil, where the Amazon is located, represents 60% of all carbon released in the country. The devastation of the forest makes it clear that current sustainability policies are not working and need to be urgently reviewed.

Companies can be great allies in strengthening a development model that promotes income generation and conservation. Our performance in the Amazon is proof of that. However, we understand that this will only be possible if the country reinforces state mechanisms to combat illegal deforestation, promoting accountability for criminals, and improving instruments to support native peoples and local communities, such as small farmers and extractivists, who are the true protagonists of the standing forest economy.

What does the company expect from the country’s next president, Luiz Inácio Lula da Silva? 

The international market for biodiversity represents about $175 billion per year, but the Amazon’s share in global exports of raw materials only comprises 0.2%.

The potential is huge. We cannot miss this opportunity.

We hope that the next administration will invest in Brazil’s leading role in the global sustainability agenda and the enormous potential of Brazil’s bioeconomy to guarantee a more prosperous future for the country, based on the generation of shared value, respect for the land, local communities, and traditional knowledge. This new productive logic will need to go hand in hand with robust investments in science, innovation, and technology. 

It is also important that the sustainability agenda be present transversally in public policies and not as an isolated assistance chapter. It needs to permeate and guide structural discussions, such as tax reform, harvest plans, investments in infrastructure, and income transfer programs in order to drive Brazil towards a green economy with more jobs and income and a better quality of life for the population.