John Michael Forgách: Giving Globalization a Human Face

Last year John Michael Forgách added another prize to his collection of environment-related honors: the 2001 Rainforest Alliance's Green Globe for his efforts to promote investments in environmentally sustainable businesses. In the growing world of social entrepreneurship, Forgách is often described as a "visionary." The Web site for A2R (www.a2r.com.br), the investment business he heads in São Paulo, Brazil, blinks the words "profits + conservation + social responsibility = sustainable development." He was instrumental last year in the creation of IBENS (The Brazilian Institute for Education in Sustainable Business), which provides training and other support to small, emerging indigenous companies. And he spends about half the year traveling, lecturing and consulting to advocate for sustainable investing, using his own experiences as a case study in success.

Reflecting on these achievements, Forgách expresses surprise at how his professional life has turned out. Neither environmental advocacy nor philanthropy figured early in his career. Rather, he was driven to make money and run companies. And he did.

Born in Brazil and educated at Harvard and the Académie de Paris, Forgách began his career in investment banking and made a fortune in crude oil trading and shipping. Starting out in Paris, he moved to Switzerland in 1983. By 1995, he was living comfortably in a spacious house on a lake. His two daughters were grown and on their own. "I had always felt like an outsider and was unhappy," he says. Among other things, he was tired of never being able to fully in charge of the businesses he ran; Switzerland does not allow non-citizens to control companies based there. He no longer needed to prove himself. "It was probably my mid-life crisis," he admits, and in 1995, at age 47, Forgách decided to go home.

A macaw got him started

Forgách might say that his change in direction started with a macaw. In 1983, his first year in Switzerland, Forgách met a woman who had a macaw to sell. "I was surrounded by macaws growing up in Brazil, so I bought it," he says, "but the bird was as miserable as I was." Six months later, he bought another bird to keep this one company. Nothing happened. It turns out they were both males, so Forgách then purchased two females, and soon he was building an aviary and breeding macaws. "I became a convert," says Forgách, who starting winning prizes for the quality of the birds he bred -- and also attracted press attention. He wrote books and spoke widely on the subject, eventually starting an NGO to breed and protect them. In 1995, as he prepared to leave Switzerland, he created a foundation to make the aviary self-sustaining; additional income comes from selling macaws to zoos in major cities. Key to this enterprise is that these macaws are bred for zoos, and aren't taken out of their natural habitats, thus stemming illegal traffic in wildlife. "When I started this project, a blue and gold macaw was about $2,000," says Forgách. "Now there are so many that they're about $250."

Next steps?

Back in Brazil, Forgách was ready for something else, but not yet sure what. "I'd become a millionaire very young and I'd fulfilled my material goals," he says. "But I wasn't satisfied." So he essentially started over, cutting most of his earlier business ties except for a few clients whose money he managed through a Swiss company, Forgách & Co.

His initial efforts focused on animal welfare. After seeing the appalling conditions at the São Paulo Zoo and becoming aware of animal smuggling in Brazil, he formed an NGO to protect wildlife and rehabilitate animals retrieved by customs and police that were being illegally transported out of the country. One of his projects was to produce a video on the bad conditions at the zoo that he sent to animal support organizations and potential supporters. He recruited people he knew to allow some of their property to double as wildlife sanctuaries. More boldly, he organized a bond issue to raise the funds to purchase a nearly-bankrupt timberland company so that its properties could be used as an animal reserve (and managed in an environmentally sustainable manner). He convinced some Brazilian pension funds to buy in.

Bringing the partners together for the timberland purchase was an arduous process that made Forgách realize he couldn't continue operating on his own. So in 1996, he joined with local partners to create Banco Axial, a boutique firm whose investments included "green" businesses as well as dot-coms and biotechnology ventures. Some of these included companies in the Amazon that provided materials valuable in genetic research. "No one else had our resources," says Forgách. "Multinationals were consulting us." He garnered publicity and spoke at meetings examining emerging trends in corporate responsibility in the Americas. But various factors led the bank to close in 2000. Forgách bought out the "green" interests at Axial and, with six people from its staff, launched A2R, his new company, later that year, in partnership with a major fund manager in Boston. A2R identifies indigenous industries with the potential to develop export markets that can generate jobs and produce income while protecting communities.

Last year, Forgách took one step further into the world of social investment and philanthropy when he helped establish IBENS. IBENS provides seed money and training for entrepreneurs starting or switching into sustainable endeavors. The program is sponsored by A2R in conjunction with Brazil's State Secretariat for Economic Affairs, and with partners in the US and Latin America concerned with sustainable development. An overarching goal is to spread the message, in media and with the private and non-profit sectors, that sustainability is profitable. IBENS, Forgách says, is the focus of his philanthropy: "All my resources are in it." In addition to helping communities develop successful indigenous businesses, IBENS also acts to protect and celebrate their cultures by producing musical recordings and videotapes. A new cultural archive is growing.

Globalization with a human face

John Michael Forgách may seem to have become an idealist as the result of his identity crisis, but he insists he's a pragmatist. Globalization is here to stay, he says, and his goal through A2R, IBENS and his other activities is "to put a human face on it."


 
Creative Commons Attribution 4.0 license  Creative Commons Attribution 4.0 license; reuse is encouraged with credit to Synergos.