mobilizing capital to scale responsible expansion of crop livestock in brazil

BOSTON CONSULTING GROUP 5 83% 3% 100%2.3% 18% 48%4% 27%51%17% 49% 24%49%20-25% tipping point12X France 4X California Of Brazil’s territory Industrial Processes2022Converted Waste Energy Agriculture Change in Land Use and ForestrySource: MapBiomas Brasil, BCG analysis Source: SEEGAmazon Cerrado 421 Mha 198 MhaBrazil’s conversion situation is alarming: Amazon is reaching its tipping point and half of Cerrado has already been cleared Current deforestation levels affect both nature and society, and place Brazil as the 5th largest global GHG emitterLand coverage status by biome In Mha and % of Brazil’s territory, 2022 Brazil gross GHG emission Share of total (in Gt CO2e2)The stark reality of conversion in Brazil is underscored by some facts: 95.4 Mha, a third of the total converted area, has been converted since 1985 73% of Brazil’s land is the Amazon and Cerrado, with 27% converted The regulatory landscape in Brazil, particularly the Forest Code, plays a pivotal role in the ongoing deforestation narrative. This legislation mandates landowners to reserve… …which renders the Cerrado particularly susceptible to positive incentive measures, given the less stringent legal restrictions.of the land in the Amazonof the land in the Cerrado region within the Legal Amazonfor the rest of the Cerrado80% 20% 35-50% The repercussions of deforestation are profound, affecting both the ecological balance and the global carbon emission agenda: • Deforestation releases significant amounts of CO2 (11% of global GHG issuance3) and diminishes the forested areas that assist in capturing this gas; • It poses a threat to biodiversity, as tropical forests globally account for 80% of terrestrial biodiversity; • Indigenous communities frequently face conflicts as they clash with loggers, farmers, and businesses exploiting the land; • Removal of forest vegetation exposes the soil, resulting in erosion, decreased fertility, and diminished water retention capacity. 1. Moment from which the forest reaches a state of degradation and fragmentation that is unable to maintain its characteristics, being subject to savannization 2. Gigatons of CO2 equivalent 3 . Crippa et al. (2020) - UN Emissions Gap report.