Leonardo Fleck works in Palo Alto but his ideals have taken him as far the Pantanal woods and a floating house in the Amazon. He is a biologist, administrator, and economist at the Gordon & Betty Moore Foundation, where he’s been doing a remarkable work on sustainability and the conservation of natural ecosystems of planetary importance.
BayBrazil: You have a degree in biology, a master’s degree in conservation biology and in business administration. Your career has always been directed to the use of tools of economics and business to promote the conservation of natural ecosystems. Despite being in Silicon Valley, you are not a typical entrepreneur, are you?
Leonardo: I’m not because I’m not a company owner. But I strongly believe in the power of creating value with entrepreneurial spirit, and I believe I have made use of it throughout my career. I always liked to focus on solutions. Does that make me an intrapreneur? Maybe. I began my career as a biologist dedicated to environmental conservation. I saw value in nature but did not understand why businesses, governments, and society in general, did not see it. I also did not have any idea of how this issue could be addressed. I began studying business administration before even finishing biology, hoping that I would find a solution. I soon realized that in order to change that reality I also needed to have a deep understanding of how ecosystems functioned. So as soon as I graduated in biology, I dropped the course of administration and moved to the Pantanal, where I lived immersed in the woods for a year, so that I could observe the full 12-month cycle of that ecosystem. The experience was revealing and I decided to go further. I moved to Amazon, where I lived for two years in a remote location, in a floating house, four hours by boat from the nearest town. There, I began to develop researches that integrated economy, natural resource management and nature conservation among local communities that depended on natural resources to survive. I concluded my research during the Masters in England, where I expanded my knowledge on the functioning of economic systems and their effects on the environment.
BayBrazil: Did you have the opportunity to work in Brazil, using tools of economics and business to promote the conservation of natural ecosystems, before joining the Gordon & Betty Moore Foundation?
Leonardo: Yes, I returned to Brazil, after the Masters, to work for an international non-governmental organization based in California called Conservation Strategy Fund (CSF). John Reid, the entrepreneur who created it, identified in the late 90s, a major bottleneck amongst most non-governmental organizations, academic organizations and government agencies that worked on environmental conservation: they did not use the most basic principles of economics and business in their work. The CSF was created in 1998 to fill this niche, by empowering these organizations and conducting economic analysis that allowed them to value the economic benefits of environmental conservation. As technical director and senior economic analyst, I collaborated on the expansion of the operations of CSF in several Latin American countries and trained more than 500 professionals from around the world on conservation economics. Over the seven years, I performed several strategic analysis of major infrastructure projects and their effects on deforestation of tropical forests and the economy of the countries where they were located and several others on the economic benefits generated by parks and reserves.
BayBrazil: What results obtained in this work would you highlight?
Leonardo: In my work in the CSF I was surprised by the huge number of infrastructure mega projects that were promoted as solutions for development, and that did not pass the minimum criteria for a cost-benefit analysis. This means that the benefits were so small that it not even outweigh the costs, even before considering the enormous environmental costs associated. A classic case was that of the reconstruction, by the federal government, of a 800 km length (497 miles) highway on Amazon that had been completely abandoned since 1986. This project would open the heart of the Amazon to property speculation and to a rampant land occupation. Politicians of the state of Amazonas had much interest in this project as a bridge to candidacy for governor. The project progressed at a cost of around $260 million, without the federal government having done any economic study to justify it. At the time I did an economic analysis that showed that the project was a lousy investment for Brazilian society: for every dollar invested only 30 cents would generate benefits. I presented the findings to federal prosecutors and to Marina Silva [Senator at the time]. A number of media reports led Marina to demand that TCU did an audit of the project, based on the study. That infrastructure project was probably the highest impact action on tropical forests in the world at the time. The progress of the project stopped, and my work became an international case study and a book chapter. Obviously I’m not against roads in tropical forests. I favor good projects that make good use of public resources and do not cause environmental destruction on a large scale.
BayBrazil: And how did you come to the Gordon & Betty Moore Foundation?
Leonardo: During my time with the CSF I realized that I needed to go back to school. At the time I was developing financial models to guide the expansion of private investments to promote tourism in parks in Brazil. I wanted to explore the potential of private capital to leverage environmental conservation. I decided to do an MBA and during the course I became very interested in supply chain logistics because that was the lens I needed to be able to think of solutions for sustainability in supply chains, since about 80% of the environmental impact of enterprises is in its chain. As soon as I finished the MBA I was invited to teach corporate sustainability at the same college. This gave me a very large exposure to business professionals from various industries. To my surprise at the time, I had the unique opportunity to work in the United States on this issue for the Gordon & Betty Moore Foundation, which was created by the co-founder of Intel, Gordon Moore, one of the fathers of Silicon Valley.
BayBrazil: What is your job in the Gordon & Betty Moore Foundation?
Leonardo: The Foundation works in four areas: science advancement, health care (United States), environmental conservation and in the San Francisco Bay Area. I am part of the conservation program and our role is to develop strategies to make investments that can bring benefits to current and future generations. In the environmental area we are probably the largest private investors in the global conservation. Over the last 12 years we have focused on supporting the creation of parks and reserves that now protect half the area of the Amazon, in conjunction with local governments. However, we know that economic pressures for agricultural expansion, which drives the destruction of tropical ecosystems, will grow. Estimates show that we need to double the food production by 2050 to meet growing demand. This means achieving the same level of output reached in 10,000 years, by the next 30 years. To achieve these goals it is necessary a strong participation of the corporate sector, in collaboration with non-governmental organizations, the academia, and governments. I develop strategies and investments accordingly, focused on the creation and testing of solutions to this issue, in scale. Currently, my portfolio has approximately 20 projects with organizations from the US, Europe ,and Brazil.
BayBrazil: Why is Brazil so interesting for the Foundation?
Leonardo: Brazil will be the world’s great producer of food for the next decades, as it is the country that combines the best conditions for increasing the world’s food supply. However, this poses a great risk to the country and the world because of environmental degradation and its consequences for climate change and biodiversity loss. Half of the global deforestation occurs due to the expansion of agriculture, especially for the opening of pasture, and the Brazilian Amazon region is where the greatest expansion of areas for livestock happens. However, it has been demonstrated that Brazil has the perfect conditions to expand agricultural production without destroying its natural resources. It is in this direction that we expect to contribute.
BayBrazil: Explain the strategic plan developed at the Foundation focused on the corporate sector.
Leonardo: If the way businesses operate is part of the problem, they also need to be part of the solution. And several companies have already realized that, since the destruction of forests is already affecting their bottom line. My job is to invest in solutions that facilitate, in scale, a large number of companies to manage their carbon footprint, so that they can encourage suppliers to provide greater sustainability. For example, we are working with Walmart, which is the largest retailer in the world and one of the major buyers of beef in Brazil. Walmart is committed to only buy meat and other products free of deforestation. We are testing solutions for achieving this reality in the Brazilian Amazon. Together, with our partners, we have also been working with a much larger group of retailers and brands of global value that are part of the Consumer Goods Forum. This group moves a third of the global GDP and is committed to only buy products free of deforestation by 2020.
BayBrazil: We know that the environmental issue is directly linked to the economy, since society uses natural resources to access the products needed for its survival. There is also a poor use of space, as shown in the National Geographic article, supported by the Foundation, on the challenges of feeding the world’s population. Why is there the idea that economic development goes in a direction contrary to environmental preservation?
Leonardo: This is a very complex question. I believe this idea exists because the development model of the past depended on a lot of land. The easiest way to expand the production was through deforestation. Governments did not impose barriers against this destruction because they did not realize that deforestation would cause other problems for the country itself. They actually encouraged it through settlement programs, new roads, and subsidized credit. The lack of water in São Paulo, for example, is associated with deforestation, but not everyone is aware of this. The GDP of the state of São Paulo will be severely affected this year. Twenty years ago environmental movements started the discussion about the seriousness of intensive deforestation caused by food production, saying that it would affect access to water and other natural resources. There are also short-term interests. A private agent will deforest because he will quickly profit, and the losses from environmental degradation may take longer to arrive. It would be the State’s role to develop a long-term view of these issues, but the priority of governments is equivalent to its mandate. Which politician will be committed to a period that goes beyond the four years? Consumers also have responsibilities. They may buy more sustainable products.
BayBrazil: Is it possible to produce and preserve at the same time?
Leonardo: We fund studies showing that Brazil and the world is fully capable of expanding agricultural production without cutting down any more trees. This is because there are already several open areas that are unproductive and could be better used. If the government focuses on public policies to improve the use of these areas, and this initiative has broad support from the private sector, Brazil may reach all the projected demand by 2030. To do that we need to work collaboratively: environmental organizations, the academia, businesses, banks, and governments need to develop a shared vision that enables increased production without deforestation. We are focusing on this issue.
BayBrazil: So would you say that governments and companies are willing to dialogue with the environmental sector?
Leonardo: Yes. A few weeks ago, the UN conference ‘Climate Summit’, in New York, was a milestone in this direction. Numerous commitments to reduce deforestation were made by both governments and corporations. One of the highlights was Cargill, the largest privately held company in the United States and one of the largest processors of soybeans in the world. Cargill has made a commitment not to buy any products linked to deforestation. That commitment is very important because the company operates in the markets of beef, soy, and palm oil, which are the three major global drivers of deforestation. Obviously, these commitments must be implemented.
BayBrazil: The Gordon & Betty Moore Foundation was created in Silicon Valley by an entrepreneur who understands all about innovation. How is the Foundation contributing to innovation, entrepreneurship and economic development through its work?
Leonardo: We seek to put into practice the lessons learned in Silicon Valley that are embedded in our culture. The impact of investments that we make, our dedication to measuring the results of our strategies and the implemented projects, and addressing issues of great importance, are points that align well with the philosophy of Silicon Valley. We have many innovative projects in our portfolio. A year ago it was launched, in partnership with Google, the first global maps of deforestation. These maps are currently being used in the platform created by the organization World Resource Institute (WRI) to facilitate the monitoring of deforestation anywhere in the world. We are also supporting, with the WRI and the University of Minnesota, the development of tools for environmental risk management on a global scale, regarding the acquisition of agricultural commodities, to be embedded on the same platform. This platform will assist companies in tracking and managing environmental impacts in their supply chains.