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Interview with PUR Projet: A New Approach to Carbon Offsets That Puts Farmers First

PUR Projet has teamed up with 30,000 farmers and companies like L’Oreal, Nespresso and Ben & Jerry’s to restore degraded ecosystems and revitalize local economies. How do they do it? Their unique approach is called insetting. And so far, they’ve planted over 8.5 million trees (and counting).

“Insetting” is a powerful trend in which companies offset their carbon emissions through agroforestry initiatives within their own supply chains. This innovative approach is not your typical carbon offset program—it creates economic stability for farmers through employment, income diversification, retirement funds through sustainable forest management and the restoration of the ecosystems where they live and operate, all while increasing the resilience of a company’s supply network.

We talked to PUR Projet’s Director of North America, Andrew Nobrega. In this interview, Nobrega tells us about PUR Projet’s insetting and impact investing programs and how they’re designed to support small farmer livelihoods, conservation and land regeneration simultaneously.

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Interview: Andrew Nobrega June 22, 2017

This interview has been edited and condensed.

GA: PUR Projet’s mission is to support livelihoods amongst the less fortunate and promote the conservation and regeneration of the most endangered species and ecosystems. Tell us more about your work and programs.

AN: The story of PUR Projet begins with another company called Alter Eco. When Tristan Lecomte, the founder of PUR Projet and Alter Eco, was a young consultant in sustainable business, he became inspired to work with local agricultural communities. Upon pursing this passion, he discovered that there wasn’t a great pathway for fair trade organic goods to reach the French market. He was working with cocoa, sugar and coffee cooperatives in developing countries seeking to find additional value for good practice in agriculture. He saw a real opportunity to both help them go organic or fair trade and improve their practice, which would create more economic sustainability. He would then help them get access to the market in France, through his newly create company, Alter Eco.

Alter Eco did very well in France and expanded internationally. With encouragement from other agri-food companies, Tristan was encouraged to found PUR Projet, which applies what Tristan learned from his experience with Alter Eco, to other companies with larger supply chains to this social and environmental scale impact. PUR Projet works with large international companies and the local communities that they’re sourcing their materials from to develop positive impact projects that align ecosystem restoration, conservation and socio economic development.

The core in a lot of the work we do centers around reforestation and agroforestry because it’s an effective tool for carbon sequestration, ecosystem restoration, promotion of ecosystem services and socio-economic development.

GA: Can you give us an example of a project you’re currently working on?

AN: The Peruvian project is a fantastic example. The San Martín region of Peru has had the highest deforestation rate in the country for the past 50 to 60 years. There’s over 500,000 acres of degraded land in San Martín right now, which is massive. In the 1940s, the area was primarily forest. Since then, there has been a substantial decrease in the amount of forested area as people cleared, slashed and burned for the development of agriculture parcels. The causes are complex: policies that promoted migration to the region for agriculture, the illegal coca industry that found a home in the region due to the expansion of transportation networks, and an overall massive boom in agriculture. You end up with a fragmented forest ecosystem, and, ultimately, less fertile land overall.

Our priority was to work with cacao producers in the region. Some of the largest organic and fair trade cocoa producers in Peru are in San Martín. We work with communities and farmers to highlight the value of ecosystems, demonstrating how they can create longevity in their parcels, economic stability, increase yields and adapt to climate change through the implementation of restorative practices, primarily agroforestry.

GA: What is agroforestry?

AN: Agroforestry is planting trees within cacao parcels. Let’s say you had 1,000 cacao plants within a parcel, you could then plant 250 trees within that parcel and that would provide partial shade which is beneficial and natural for cacao. You could then have some sustainable timber starting in the 8th year, obviously respecting a strict sustainable development plan and a carbon sequestration plan (allowing only 3-5% felling per year). You can also cultivate fuelwood, fruit and medicinal products in an agroforestry system. We only work with native species and we conserve endangered species.

By implementing agroforestry, you’re supporting the hydrological cycle, reducing erosion, supporting soil fertility and carbon accumulation in the soil, supporting the existence of pollinators and the prevention of pests. We work with the communities to understand this, to have them engaged as willing participants in the process. We also help to develop employment opportunities and alternative livelihood strategies.

GA: What economic benefits does a farmer see by using agroforestry?

AN: Often a farmer’s baseline production is vulnerable to significant fluctuation in yields on an annual basis due to pests, climatic, farmer performance, etc. The first kind of economic benefit that we see of using agroforestry is a stabilization of yields. That’s a stabilization of soil and habitat for pollinators, that’s protection against significant weather events like large storms, supporting the hydrological cycle to both mitigate floods and droughts. When you have trees, they recharge the groundwater and decompact soil so that it has a higher water carrying capacity. Parcels do better because they have a better groundwater source to draw from.

Add to that the additional value of introduced trees and other crops. You have the potential for fruit crops and firewood, which contributes to reducing what the farmer has to purchase or gives them additional cash crops, depending on their needs. Then you have medicinal plants associated with some of the trees like sagre de grado (dragon’s blood), which is a very valuable tree to some of the communities that we work with. In addition to that you have the timber trees over the longer term, using a sustainable management and harvesting plan. That for a farmer, in many cases, is the first passive income they’ve ever had. They call this program “happy retirement.”

GA: How do PUR Projet’s programs regenerate local economies?

AN: PUR Projet’s model is to build the capacity of the local community to run the program. While we do have regional managers that visit the projects frequently, particularly in the first few years, the idea is that we hire local managers. We hire and build the capacity of local technicians so that this program is an employment opportunity for the local community as well. Small program might have just two employees, but a large program could have upwards of 50 employees in various organizations supporting the program. So the employment benefits can be quite significant.

In addition to that, we need inputs to the program. Often there are no tree nurseries in the regions that we’re working in, so we provide the communities with the tools and capacity needed to develop tree nurseries. They source the seeds from the forests, they’re native trees from their own forests. Then those nurseries become social enterprises where the profits reinvest into the program. That’s one example. In other cases, we help communities to develop vegetable gardens, apiculture, or aquaculture initiatives to help develop additional employment opportunities.

GA: What kind of employment opportunities and alternative livelihood strategies have you developed for farmers in the San Martín region of Peru?

AN: As a result of that program and good work with the local community, there was a clear need to develop a program to protect existing primary forest adjacent to these communities. So we helped develop a REDD program (Biocorredor Martin Sagrado REDD+ project in the provinces of Mariscal Cáceres and Rodríguez de Mendoza) with the local communities to get 18 villages conservation concessions. The program is funded through the sale of carbon credits for the development of alternative livelihood strategies for the surrounding communities. It also funds ranger programs to ensure that conservation is maintained.

Now we’re working on developing ecotourism in the region so that communities can benefit from that potential economic development. Additional programs like these have blossomed over time through positive relationships, a participatory approach, and through the visual impacts of the program.

The final stage of the program that we’re working on is to take degraded land that has been simnifically degraded and actually help farmers to develop economic productivity through agroforestry. You get both economic growth and ecosystem restoration that would not have occurred otherwise there, and we’re doing it through an impact investing model.

GA: Tell us more about Pur Projet’s impact investing program.

AN: We’re in a pilot phase for the program. In today’s impact investing world, you will often find that there’s a bit of a gap on the technical assistance side. You may have a fantastic program, but the impact investors will generally want to hold off until there’s a proof of concept before they engage. There’s a funding gap for that period while the pilot project is being developed.

We’ve solved that by using grant funding for the pilot phase. Once we get up and running, we’ve toyed with both ideas of having institutional investors, which would be more traditional impact investors, and a crowdfunded model where individuals could participate. We’d need to make sure we have the right partner who can administer the fund for individual contributions, because that could be quite costly for the program.

GA: How do you mitigate risk for farmers?

AN: Our impact investment model includes a buffer to protect the farmer from debt to investors in case things don’t work out. We work with farmers to develop the farm and we share commodity offtake with them, meaning we’re paid back in product not in monetary terms. And that commodity offtake is relative to their production. If they win, we win. If they lose, we lose as well. We’re sharing the risk on the production. When the commodity goes to market, the return comes to the rotating fund, this rotating fund takes off any additional income above the 10 to 12 percent threshold and it stays within the buffer pool. If next year is not as robust, we can dig into the buffer pool to deliver returns to investors before it impacts the farmers. In a situation where we have full performance, that then just rotates back to the farmers.

The fund helps grow the project over time. So, worst case scenario, the farms are buffered and best case scenario, we have more farms being installed as a result of the program. From the investor’s perspective they feel that they’re protected and that the risk profile of the program has been reduced because there’s a buffer pool.

GA: Let’s talk about Pur Projet’s insetting program. What is insetting? How is it different than offsetting?

AN: Insetting is the core business of Pur Projet. Insetting is working with companies to take control and action on their carbon impact within their own value chain. It’s kind of similar to saying you would invest in energy efficiency measures within your own operation to reduce your carbon impact as opposed to buying offsets for that carbon impact associated with natural gas or electricity. In a similar vein, we’re asking, “isn’t it better to address the carbon within your own supply chain as opposed to buying offsets that have no connection to your supply chain?”

At the global level, the carbon benefits are of those choices are equal. Yet when you look at doing a program like this within communities that you care about and within your supply chain, there are so many other benefits and synergies. You start to see the benefit of soil restoration, conservation, biodiversity, pollination benefits, supporting the local hydrological cycle. You start to see that the value of an inset or a carbon action restoration activity in your own supply chain actually benefits the entire ecosystem in many ways as well as providing economic diversification and stability for the farmers in your supply chain. From our perspective, an inset is a more valuable proposition to a company who wants to engage in climate action.

GA: We’re starting to see companies like Nespresso adopt insetting. Do you foresee more big companies to engage in this space in the future?

AN: Yes absolutely. We work with a lot of large international entities, some that we can talk about and some that we can’t. We’ve engaged with many big brand names out there (for example, L’Oréal , Nespresso, Accor Hotels, Clarins, and Hugo Boss). Most companies that I’ve talked to recently have by now engaged with the idea or heard the word. I think we’ll continue to see iterations of what insetting means based on the different participants and how they want to value it. Our goal is to have a common definition so that it doesn’t become a greenwashing term. As these projects go through multiple iterations, companies are continuing to see the real benefits and it’s just going to become more of an influencing factor for them to participate.

GA: How can people get involved with Pur Projet?

AN: As we discussed, there’s potentially a future opportunity for them to engage in impact investing with us as we develop that program for consumers.

Then there’s the obvious: we’re living in a world where you can’t always rely on policy makers and elected officials to take action on the environment and our changing climate. More and more, it is up to the public to ensure that brands, governments and media value ecosystems. Vote with your dollar!

Learn more about Pur Projet’s work

Plant a tree in Peru