Stories - Impact Hub

Small businesses in Asia can help economies and forests grow

Written by Tyler Tornaben | May 31, 2016 5:19:22 PM

According to a new study, small- and medium-sized Asian businesses specializing in forest and ecosystem services can play a key role in reducing deforestation in the region and can help economies and forests grow. Impact Hub focuses on developing local entrepreneurial ecosystems, with 9+ locations in the Asia-Pacific region and 80+ around the world.

The Impact in the Forests: The potential for business solutions to combat deforestation in large forest landscapes in Asia report, explores ways to create business solutions for deforestation-free trade chains in Asia.

Analyzing the policy and entrepreneurial context in three landscapes across Asia, the report highlights how supporting innovative small-scale green businesses could help reverse the current trend where business incentives for promoting deforestation remain greater than those for preventing it. The study shows that this trend persists despite recent deforestation-free commitments made by several countries and the UN push to halt deforestation by 2020.

“This report shows the importance of bringing together entrepreneur incubators, impact investment and innovation support in a more coordinated fashion and increase investment in zero deforestation products,” said Paul Chatterton, head of WWF’s Landscape Finance Lab. “Policies and practices need to be focused to assist new business development if governments and donors want to meet their deforestation-free commitments.”

A collaboration between Impact Hub, and four organizations, WWF, EnnoventClarmondial and GreenWorks Asia – the report draws on case studies from three key biodiverse countries that represent the range of conditions across Asia including: the Central Truong Son area in Vietnam; Kalimantan and Sumatra in Indonesia; and the Terai Arc region in the lowlands of Nepal.

The report shows that there is strong potential for innovative green business approaches. Sectoral analyses in the study show the kinds of enterprises that might contribute positively to addressing deforestation, such as rubber, cocoa, rattan, essential oils and medicinal plants. A good example is The Mountain Institute work to turn medicinal and aromatic plant production as a profitable business for small producers.  Since 2001, The Mountain Institute has increased the income of over 15000 farmers through training and supporting the sustainable cultivation of plants such as citronella, anthopogon oil (Rhododendron anthopogon), bael nut (Aegle marmelos), and butter tree (Diploknema butyracea). The institute in partnership withWWF and business innovation company Ennovent plan to join forces in the future to secure certifications for organic production, quality processing and good forest management – including in the buffer zones of national parks – strengthening linkages to the profitable global cosmetic and pharmaceutical industry.

The report also looks at the various actors – innovators, investors and connectors such as Impact Hubs – who might be involved in the scale-up and consolidation phase for forest-friendly initiatives and outlines recommendations to create and replicate successful models of deforestation-free social enterprises in other affected areas. Impact Hub Phnom Penh is mentioned as a strong connector and with the increasing reach and influence through our growing Impact Hub network, Impact Hubs can be a significant actor in this field.