Regenerative Land Trust Fund is Value Flow’s land regeneration solution. Resident at Casa do Impacto, it’s promoted by a multidisciplinary team, which includes: Paulo de Carvalho, Telma Gomes, Jefferson Sofarelli, Katharina Serafimova, Fábio Borges and Jeronimo Souza, among others.
Paul holds a degree in Information Technology, Organizational Design and Engineering. He has led international transformation programs, implementing automation and artificial intelligence solutions. Telma is co-founder and CEO of SEEDS for Sustainability, Master of Strategic Leadership for Sustainability (BTH) and has twenty years of experience in multinational and the Secretariat of Institutional Relations of Brazil. Jefferson is an Engineer, Software and Internet activist and enthusiast of decentralized technologies such as Identity Self-Sovereign, Blockchains and Autonomous Decentralized organizations. Katharina has experience as Head of Renewable Resources, Head Sustainability, Senior Advisor Sustainable Finance, and since 2014 has taught at the Institute for Banking and Finance, University of Zurich. He is also co-founder of the Food Network, Terra in Mértola and the Regenerate Forum. Fábio has been a boarding member, investor and independent consultant for various companies, startups and NGOs in Brazil, Canada and Europe. Entrepreneur and mentor in regenerative projects graduated in MKT and Business Management, international MBA at IESE Business School. Jeronimo has financial experience as a supervisor of asset managers in the UK. He was developed and implemented risk management frameworks in the retail, private and investment banking sectors and held a degree in Chemical Engineering and a Masters in International Banking from Southampton University.
IMPACT FOUNDERS | SDG 11 | Sustainable cities and communities
(5 min. read )
What is the Value Flow mission?
I will start by sharing that part of the challenges we have today results from problem-solving thinking, which sees reality as a problem. However, when created proper context, every situation has an evolutionary potential, producing better “quality and quantitative” results.
Value Flow is born from two crucial findings:
As the most significant human construction, the economic/financial system we created is its most considerable constraint and contains a tremendous evolutionary potential.
We, humans, have, intrinsically, a set of values that are consistent with life and are far from what the economy values. Or worse, the economy has a system of “values” against life.
Two examples: although the universal rights charter indicates a set of rights for all human beings, these are not socially guaranteed and depend on the “state of the economy”; right to work, education (…) a caregiver can work for a home earning a salary, providing care in all identical to another caregiver but who, by doing it voluntarily and in a close relationship, does not make an equivalent salary
What is the business model of the “Regenerative Land Trust Fund”?
The Regenerative Land Trust Fund takes ownership of the IPO (Initial Public Offering) mechanism and adapts it as a metaphor for land as property. For a year, we investigated three significant themes central to the regenerative movement: the complexity of land as property, regeneration, and the economic and financial models that support land-related activities (agricultural, forestry, tourism).
There are enormous challenges that imply a profound change in mindsets. An example is the challenge of regeneration as a concept related to our ability to think and act long-term (transgenerational). Another challenge is related to how we deal with land as a possession, and yet another is what we value when we look at it as immovable.
Our investigation allowed us to conclude that there is a growing number of owners and investors with a regenerating heart, for which the proposed business model makes sense. We are currently in the “prototyping” phase to validate the business model, which follows forward components:
- > Agency: the entity that acts as a mediator between investors and owners and that charges a transaction fee
- > Valuation: the entity defines a rigorous model in the valuation parameters of land and provides this information as a service available to an investment manager who advises investors in this market niche
Does the expected value chain consider the by-products (waste) in a circular economy logic?
We base our conceptualization on two financial dynamics:
- > A simple one that is the driving force of the fund. It corresponds to the “IPO” mechanism that allows the start of the regeneration project.
- > A complex, which supports and adds value to the regenerator throughout the entire regeneration cycle.
This second layer has many variants, as the enormous value resulting from the scale synergies that the fund can leverage and the scientific rigour of the metrics. As an example, today, we have an additional value given by voluntary markets or carbon certificates. The fund intends to boost these markets. In addition, we are confident that we will monetize other “eco-services” in the future, such as the ability to retain and filter water. These are examples of the type of savings that the fund can leverage, resulting in potential additional sources of income for all stakeholders.
In addition, embracing regeneration is embracing economic regeneration around intervention sites. Thus, economic revitalization is much deeper than the circular economy.
Therefore, there will always be a concern to use and maximize what we consider waste. Here are two examples:
- > Consolidating a compost network makes it possible to maximize the quality and quantity of organic matter in the soil, now wasted in many places.
- > Today, the industry can take advantage of the almond husks that were once wasted and take advantage of their properties, such as their insulating capacity. Thus, there is an infinite and abundant sea of possibilities when we look at nature through the eyes of biomimetics.
In March of this year, they held a session promoted by ESDIME on the Regenerative Land Trust Fund to create awareness among landowners aligned with the idea of land regeneration. What has evolved since here?
(…) For a year, we repeated sessions of this type and interviewed dozens of regenerating owners. We learned a lot and our proposal incorporated this learning. I highlight the following:
- > About land as property, we learn the inherent complexity of this concept. There is a relationship with the land that has a particular expression in the meaning of “being an owner”. Instead of an owner, a regenerator sees himself as a guardian, marking the difference between “being in relationship with” or “taking possession of”. To guarantee this differentiation, the concept of “guardian” should be legally established.
- > The fund is not buying the land; it is changing the ownership relationship to a caring relationship, nevermore reversed.
- > We learned about the value of the land; we learned that the real estate market, as an integral part of a logic that looks at land as a mere resource, we learned that real estate market devalues distinctive elements and anchors of biodiversity. Thus, for example, earthen land, devoid of life, has more value than land with natural features or biodiversity.
As the majority of forest land in Portugal is private property and therefore more challenging to manage, namely regarding the issue of forest fire prevention, is the fund’s mission even more pressing?
There is a multitude of factors that contextualize the increase in fires. As a society, we value a natural asset at its death: a fish when caught when cutting down a tree, etc. Unfortunately, there’s no vitality created, so forest areas are “living” and cared for, and thus the relationship with the land is lost. The same “land as a resource” vision favors “monocultures”, which reduces the resilience of natural spaces and aggravates the climatic situations that increase fires.
In this sense, the fund intends to contribute to a different understanding and appreciation, which inspires and demonstrates other possibilities for these owners.
What have been the most significant challenges, and what are the goals for Value Flow and the Regenerative Land Trust Fund?
This year we worked and experimented with various concepts. We hope that the next cycle will be one of realization. We aspire to launch the Regenerative Land Trust Fund as a pilot project (not as a fund yet). In addition, we are preparing a set of other funding mechanisms, which we call “Regenerative Fund” and which we want to present shortly. We remain very attached to the SEEDS project, which we want to consolidate in Portugal over the next year.
Like many impact agents, it isn’t easy to find funding mechanisms that support our mission. Most of the support would make us deviate from our path, and this issue has proved to be a significant challenge.
How do you think you can contribute to SDG 11, “Sustainable Cities and Communities” or any of the other SDGs?
Value Flow action is transversal to all Sustainable Development Goals. For example, the Regenerative Land Trust Fund is centred on SDGs 15 and 13, but with decisive contributions to 2,3 6, 11 and 12.
Founders de Impacto interviews the founders of resident startups, whose mission is aligned with the Sustainable Development Goal (ODS) celebrated each month at Casa do Impacto.
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