Think of a landscape most negatively impacted by climate change and the Amazon Rainforest likely comes to mind. Our planet’s largest natural carbon sink, the Amazon is home to the one of the highest rates of deforestation globally and the timeline to address it is rapidly diminishing. People and corporations are increasingly ready and willing to pour finance into Brazil to stop deforestation but are stumbling before they reach the starting block, unclear of what to support or where to begin.

The answer certainly isn’t planting more trees. Instead, the starting point may be with cattle, which is, ironically, the principal driver of deforestation.

According to the latest reports, 80% of Amazonian deforestation is caused by cattle production and that deforestation is responsible for releasing 340 million tonnes of carbon annually into the atmosphere, accounting for about 3.4% of current global emissions.

I recently travelled to Brazil with a group of colleagues that work on a variety of projects across the Brazilian Amazon and cerrado – a rapidly disappearing scrub forest environment. We stayed in a hillside farmhouse overlooking the farm’s 6000 hectares of land and boasting stunning sunsets and sunrises – their beauty due in large part to the smoke caused by slash and burn deforestation.

Perhaps most poignantly, the farm was surrounded by the heavily degraded and deforested cerrado, a direct contrast to the canopies and rainforest edge just across the nearby river. The hard line of demarcation between served as a constant reminder of the destruction creeping further into the Amazon.

The farm’s land is currently the focus of Caaporа̃, a start-up company supported by two Palladium projects—Fundo Vale and Partnerships for Forests (P4F), the latter of which is testing a model that aims to improve the productivity of cattle by 5-10 times through better feeding and land use that restores degraded land. On the farm’s land, almost a third of it is designated to cattle, another third is used to grow corn (for cattle feed) and soy in the rainy season and grazing land in the dry season, and the final third is designated for reforestation or retained as forest. Trees will also be planted in the area dedicated to cattle. Caaporа̃ operates the farm on a profit sharing basis with the landowner who had basically given up on the farm due to its degradation.

The key here is that through intensive feeding and creating a better habitat for the cattle with more trees to provide shade, the density of cattle per hectare can be quadrupled and grow to market weight more than twice as fast.

Additionally, and maybe most importantly, through this method, the team calculated that compared to the traditional, more extensive cattle practices, they could attribute about US$70 of carbon value per head of cattle, which are worth about US$600-700 when they go to market. If converted into carbon credits, (validated by P4F), this provides the extra incentive to landowners of selling carbon credits to organisations looking to ‘claim’ the right to the carbon on their journey to net zero, and in turn support the investment in improved farming techniques.

The bottom line: cattle can be raised more sustainably and more productively on less land and produce less methane without deforesting the precious rainforest around them.

So, why isn’t this happening everywhere?

It requires a transformation of the whole ecosystem surrounding the cattle raising sector, not just a single farm. Based on our experience in Peru with cocoa value chains, we know is possible. It may not be easy, but it’s possible.
Think, for example, of a large meat company operating with tens of thousands of farms in its supply chain. By incentivising them to switch to this more productive and carbon saving method, it could meet market demand for beef on less land; reducing pressure on remaining forests while contributing significantly to its own net zero carbon commitments.

However, this would also mean that smaller and less efficient farms might no longer be competitive. So, what happens to them?

The reality is that many are already operating in areas that are too badly degraded or deforested, or too small to truly be profitable. These farmers often end up cutting more forest. However, an option for them is to produce other agroforestry products like cocoa (in the Amazon region) or consolidating their land with and working for a company like Caaporа̃. For the meat company, helping these uncompetitive farmers find alternative livelihoods will also help them on their path to deforestation-free and competitive supply chains.

A smaller value chain can also help solve the large meat company’s traceability problem. Recent reports have shown that many large beef corporations source from both direct and indirect suppliers, with little to no oversight into the legality or the practices of the latter. And while these corporations have made global commitments to sustainability, as they continue to expand without a clear view into the source of their beef, they continue to contribute to poor practices and deforestation. This puts them at risk for further harm to both reputation and profits as more laws are enacted around deforestation and more financiers commit to zero-deforestation policies.

It's not an overnight transformation, but with the insights from Caaporа̃ and similar organisations, we know that the method works; we have the proof points. Now, we need the buy-in and the finance to scale up the solutions. The buy-in has to come from the large meat companies, farmers, and producers to encourage and shift their supply chains towards more sustainable farming.

The start-up finance can be provided by companies that have made their commitments to tackling climate change and transitioning to net zero, and then by impact investors attracted to opportunities for financial, environmental, and social returns.

Now is their opportunity to step up, to move from small scale sustainability pilots and truly invest in transformation that’s not just good for business, but for people and the planet.

For more, read 'The Catalyst Special Report: Forests' or contact info@thepalladiumgroup.com.