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Vale’s 2030 Forestry Goal

Vale’s 2030 Forestry Goal

Pledge by

Vale S.A.

Recover and protect 500,000 hectares by 2030, beyond its borders.

Type
Conserving, Restoring & Growing, Enabling
This pledge will take place from
2020 to 2030
Location
Brazil

Company website

Pledge overview

Vale, in 2019, committed to six sustainability goals aligned with the UN's 2030 Agenda. A significant one is the Vale 2030 Forestry Goal, aiming to protect and restore 500,000 hectares beyond operational boundaries. This includes restoring 100,000 hectares and protecting 400,000 hectares of forests. Noteworthy, it aligns with global climate targets and contributes to Brazil's commitments.

In addressing the recovery aspect, traditional methods were deemed insufficient for the desired impact. Vale sought sustainable business models, initially focusing on agroforestry systems to expand vegetation cover and increase carbon sequestration.

In 2019, a disruptive model was proposed, focusing on businesses with a balance between risk, return, and environmental impact. A pilot project was initiated, and an open innovation program, the Agroforestry Challenge, sought innovative solutions. Inocas, a selected company, became part of the investment portfolio.

From 2020 to 2023, the project expanded to 12,614 hectares through impact businesses, embracing commercial models for restoring degraded areas. In 2022, new models were evaluated, aiming to build a stable portfolio by 2024, ensuring a better combination of risk, return, impact, and carbon credit generation.

For conservation/protection, partnerships with Protected Areas, a total of 16 5,000 hectares of conserved areas, and protection projects are considered. These collaborations aim to prevent and protection projects are considered. These collaborations aim to prevent deforestation, involving payments for environmental services. Vale Natural Reserve and Fundo Vale play key roles in these partnerships, emphasizing conservation and restoration components, respectively.

The Vale’s 2030 Forestry Goal envisions a portfolio of integrated initiatives forming synergies for optimal results. Support spans from community businesses to partnerships with financial organizations like Biomas. In 2022, an in-depth study focused on forest protection, carbon credit generation, and combating Amazon deforestation identified 58 opportunities, covering around 5 million hectares. Partnerships, like with Algar, were formed to protect properties, such as Fazenda Pacajá in Pará.

Implemented collaboratively, the Vale’s 2030 Forestry Goal aligns with Vale's sustainable production chain focus, intending systemic interventions. This approach ensures that supported chains and businesses have incentives to generate impacts beyond 2030, preventing further forest degradation and reducing dependence on Vale's resources.

Actions in this pledge

  • Conserving trees and forest landscapes

    Supporting actions
    Permanent conservation
    Secure a forest through acquisition or legal agreement to avoid planned or unplanned deforestation or degradation, and/or ensure permanent conservation of land
    Conservation support activities
    Support the operating costs and activities of existing conservation areas, including advocacy for conservation policy
    Additional details

    In 2020 and 2021, partnerships were established with seven public protected areas, which together total more than 115 thousand hectares. In these areas, several species of flora and fauna, rare and threatened with extinction, are present and have already been mapped, through partnerships, such as, for example, the jueirana-facão (Dinizia jueirana-facao), the juçara palm (Euterpe edulis), the jaguar (Panthera onca) and the northern (Brachyteles hypoxanthus) and southern muriquis (Brachyteles arachnoides). Among the activities developed are ecosystem protection and environmental conservation, environmental education and monitoring of the activities carried out, through software developed by Vale, in which the activities carried out are managed, the occurrence of environmental incidents recorded and the biodiversity of the locations recorded.

    In 2022, we structured the first purchase of high-integrity forest carbon credits for Vale from Grupo Algar’s REDD+ project at Fazenda Pacajá, a property straddling the municipalities of Portel and Bagre, in the state of Pará. After examining more than 60 initiatives, this project was selected based on the social and environmental impacts generated, Algar’s concern with co-benefits and its long-term view of the region. The project aims to conserve and prevent unplanned deforestation in an area of more than 140,000 hectares of native forest in the Amazon biome. It is estimated that the project will avoid the predicted deforestation of 82,994 hectares, which is equivalent to 40,222,208 tCO2 in avoided emissions over the space of 30 years.

    Conserving

    Land area
    400,000 hectares

  • Restoring and growing trees and forest landscapes

    Supporting actions
    Assisted natural regeneration
    Actions that support natural regeneration without tree planting, such as Farmer Managed Natural Regeneration, forest soil remediation, exotic species control, disease prevention, and wildfire protection
    Reforestation
    Re-establishment of forest through planting and/or deliberate seeding on land classified as forest, that has been degraded or where trees are unlikely to regenerate naturally
    Agroforestry
    Activities that establish and manage the integration of trees into agricultural landscapes, silvopastoral systems, farming in forests and along forest margins and tree-crop production
    Additional details

    In order to support the principles of transparency, governance and efficiency leveraged by an impact measurement and management system, and to advance in the development of flows and practices, the Fundo Vale has developed GIMPACT, a model built for the management and measurement of the Vale Fund's impact, based on its Theories of Change. It was built on the basis of the main global references for impact management (GIIN, IRIS, IMP, IFC, ODS) and designed to monitor the portfolio of initiatives supported by the Vale Fund from the point of view of achieving results and impacts. GIMPACT is the methodology used to measure the social and environmental impact generated by the businesses supported by 2030 Forestry Goal.

    Based on this, it aims to add efficiency to the decision-making process and transparency for governance, as well as create the basis for demonstrating, in a robust and effective way, the contribution to changes in the short, medium and long term, as stated in the Vale Fund's 2030 Theory of Change.
    The model can be accessed via this link.

    Restoring & Growing

    Land area
    100,000 hectares

  • Enabling activities for trees and forest landscapes

    Supporting actions
    Nursery and seedling development
    Establish tree nurseries, including actions such as identification and collection of seeds and/or growing seedlings
    Sustainable forest management
    Activities that support the stewardship and use of forests (including by local communities and indigenous peoples), to maintain their biological diversity, productivity, and regeneration capacity, as well as their potential to fulfil relevant ecological economic and social functions
    Market development for sustainable forest products
    Activities that create markets and demand for ecologically and socially responsible timber and non-timber forest and agroforestry products, e.g. capacity-building for the harvesting and processing of agroforestry products, forest certification standards, etc.
    Education and capacity building
    Forest / tree species conservation and restoration education programmes, targeted educational and behaviour change campaigns, training and capacity building, including promotion of local and traditional knowledge and practices
    Community mobilisation
    Community mobilisation and engagement activities for conservation, restoration and reforestation, including enabling systems of community governance, etc.
    Land, community rights & enabling institutional frameworks
    Activities that support land rights, resolve land tenure conflicts, support indigenous people’s rights, and other institutional and policy measures that support and facilitate conservation and restoration
    Financial innovation
    Activities that create additional financial opportunities and incentives for conservation, restoration and reforestation (e.g. blended financing vehicles, etc.)
    Additional details

    By hiring a company specializing in management and support, the businesses receive the following services: Implementation of management and control processes, evaluation of business performance, support in structuring the company, in terms of governance, management of socio-environmental impact and structuring of processes for collecting, analyzing, validating, storing and using business data for internal use and reporting. The contracted company also offers face-to-face and online support to businesses, working directly to structure and strengthen internal management processes.

    Entrepreneurs are supported by senior professionals who are market benchmarks in Impact Management, Business Development and Impact Investment and who provide support on strategic business issues. The entrepreneur's personal development activities usually take place individually and online, focused on the CEOs of the supported businesses, with a total duration of between 3 and 6 months. Mentoring meetings are held weekly, varying between 1 and 1.5 hours per week. The program is run by a third-party company hired by Fundo Vale. Normally there are between 4 and 6 places on the acceleration program, each for each of the businesses supported.

    Enabling

Carbon benefits

3.7 to 5 million tons of CO2 2020 to 2030

Our ecologically and socially responsible approach

By strengthening each partner business in the Vale’s 2030 Forestry Goal portfolio, under the umbrella of the Theory of Change and emphasizing general data, financial results, knowledge production, innovation, socioeconomic impacts and ecosystem services, we were able to monitor their results and impacts in 2022, including each business’ contribution to the overall results envisioned for the 2030 Vale’s 2030 Forestry Goal portfolio. Through a partnership with the Vale Institute of Technology (ITV), we calculated a baseline Soil Quality Index, in order to evaluate the soil’s capacity to function within the limits of a natural or managed ecosystem to sustain the productivity of plants and animals, thereby maintaining or increasing the quality of ecosystem services.

The quantities of species planted in each site were also mapped, to measure the effective contribution to the increase in vegetation cover, as well as the use of native species in each production scheme. Using this data, ITV was able to build an analysis m ethodology, considering rules for standardizing the physical and chemical attributes of the soil. It also created a methodology for calculating this indicator. To assess species diversity, the Shannon Wiener Index was used, which considers the number of sp ecies (richness), the abundance of these species and the total number of individuals. To comply with the Vale’s 2030 Forestry Goal Theory of Change in the socioeconomic context, it is expected that the initiatives will contribute to the creation of new job opportunities and above all boost the income of workers and farmers involved in habitat restoration. These individuals may be engaged in various roles, whether working in the business’ offices or on partner farms. These roles include management and production activities, logistics and input production (in cases where businesses carry out these activities within their production sites). Furthermore, it is crucial that as businesses generate financial returns, there is a fair distribution of the fi nancial benefits among all the stakeholders involved.

The Institute for Forest and Agricultural Management and Certification (Imaflora) has been a partner of this initiative since 2020. It is responsible for evaluating whether the chosen businesses are operating in compliance with legislation and best practices related to agriculture, agroforestry and pastoral systems and social demands in the period in question.

This monitoring involves the diagnosis of projects and their social and environmental practices, as well as the analysis of georeferenced data from areas being restored. This allows Fundo Vale to mitigate risks related to each business’ social and environmental compliance and offer projects the opportunity to improve their management systems in areas of production.

Our results tracking

We keep this management in constant alignment with global references that aim to facilitate taxonomy and comparability between experiences such as the proposals formulated by the Global Impact Investing Network (GIIN) in its catalog of metrics listed in IRIS+, impact dimensions or classes of assets presented by the Impact Management Project (IMP), in addition to the observation of the Sustainable Development Goals (SDGs), both in the sphere of the 17 goals, as well as their specific goals. We developed an impact management system based on those global references to help keep all indicators on track. Also, for the recovery goal, we have a specific theory of change that describes the causal logic expected.

Ecological metrics

• Ecosystem services: impact dimension that aims to monitor the carbon balance, the increase in vegetation cover (with NDVI analyses) and the quality of the soil in the areas under recovery (with the support of scientific methodology developed by ITV-DS).

• Recovered Area: impact dimension that tracks the expansion of hectares of recovered areas through georeferenced satellite images.

Social metrics

• Socio-economic: impact dimension that monitors the generation of jobs, the increase in income for families and workers, the financial return for partner businesses and the fair distribution of the financial benefits of the businesses.

• Strengthened and sustainable impact businesses: results dimension that measures the strengthening of supported businesses so that they increase their capacity to deliver financial results and socio-environmental impact.

• Production of knowledge and innovation on sustainable production systems: result dimension that seeks to map the knowledge and innovation in products and services generated by the supported businesses, with a description of systematized experience, published and distributed to interest groups, in partnership with ITV-DS.

• Financial resources mobilized: dimension of the result that monitors resources from third parties (other than the Fundo Vale) mobilized directly from investors, partners and off-takers. It also takes into account the funds raised by the businesses from the Fundo Vale's investment.

Our system of accreditation

Imaflora (Institute of Forestry and Agricultural Management and Certification), a partner in the initiative since 2020, is responsible for evaluating whether the chosen businesses are operating in compliance with legislation and best practices linked to agriculture, agroforestry and pastoral systems and social demands in the evaluated period. This monitoring takes place by carrying out a diagnosis of the enterprises, their socio-environmental practices and an analysis of georeferenced data from their areas under recovery, which allows the Fundo Vale to mitigate risks related to the social and environmental compliance of businesses and offer enterprises the opportunity for improvement related to the management system in production areas.

The ABC Norte REDD+ Project, from which carbon credits were acquired as part of our conservation strategy, was validated by Rina and registered under the Verra Standard. Every credit issuance will be verified by a third party and issued by Verra. For more detailed information, please visit this link.

Our partners

Protection Goal – 400,000 ha:
1) Instituto Chico Mendes de Conservação da Biodiversidade (ICMBio) / Chico Mendes Institute for Biodiversity Conservation – Federal;
2) Instituto Estadual de Meio Ambiente e Recursos Hídricos (IEMA) / State Institute for the Environment and Water Resources – Federal State of Espírito Santo;
3) Instituto Estadual do Ambiente / State Environmental Institute (INEA) – Federal State of Rio de Janeiro.

Restoration Goal – 100,000 ha:
1) Fundo Vale: Creator of impact investment thesis for achieving the Vale’s 2030 Forestry Goal and main executor of structuring and implementation work, supported by a network of partners;
2) Palladium: Management of Vale’s 2030 Forestry Goal’s restoration portfolio and integration into program;
3) Move Social: Impact measurement and evaluation, monitor the trajectory of results; and impacts of Vale’s 2030 Forestry Goal portfolio and support acceleration of companies in field of impact management;
4) BRQ: Support for mapping and structuring of program data management.
Sitawi finance for good: Financial assessment and monitoring of investees;
5) Fruto – Agrointelligence: Evaluation and measurement of socioeconomic impact, measurement in the field through interviews with partners and workers;
6) Ecosecurities: Carbon project feasibility studies and related activities;
7) Certi Foundation and Darwin Startups: Responsible for the open innovation program and structuring of businesses;
8) Provalia management for rural companies: Technical assistance to support management, structuring of processes and business governance;
9) Institute for Forest and Agricultural Management and Certification (Imaflora): Management of social and environmental safeguards through field surveys, due diligence, production of reports, action plan monitoring, external validation of georeferenced data and tracking of evolution of areas using Normalized Difference Vegetation Index (NDVI);
10) ATA Consulting: Structuring of advisory board and technical opinions to formulate goal’s conceptual framework;
11) Vale Institute of Technology – Sustainable Development (ITV- DS) Research and development related to socioeconomics, ecosystem services, habitat restoration, data management, knowledge production and innovation;
12) Vale Natural Reserve supports evaluations and technical monitoring of program.

Our locations

We are working at locations across Brazil.

Protection Goal – 400,000 ha:
Espírito Santo (Atlantic Forest), Rio de Janeiro (Atlantic Forest), Minas Gerais (Atlantic Forest), and Pará (Amazon Forest).

Recovery Goal – 100,000 ha:
All biomes in Brazil are eligible, we already have implemented in the biomes Cerrado Savanna, Atlantic Forest, Amazon Rainforest, Caatinga Shrublands.