Featured: Climate and Community

Community lenders look to carve out a role for themselves in the new green bank fund. The Inflation Reduction Act in the U.S. sprinted into law almost as fast as an electric Ford F-150 Lightning can go from 0-60 (if you can get your hands on one). Details of the bill, which contains $369 billion in energy and climate-related investments, are still coming into focus. One murky provision: the Greenhouse Gas Reduction Fund, a $27 billion “green bank” facility that will channel capital to hard-to-finance decarbonization efforts, particularly in low-income communities. The funding could turbocharge initiatives like Accion Opportunity Fund’s loan program for independent truckers, which has helped thousands of individual owner-operators reduce emissions and stay in business, or Rhode Island-based Capital Good Fund, which makes loans for energy-efficiency upgrades, like insulation, heat pumps and windows, to borrowers who wouldn’t qualify for a bank loan. But critics have seized on language that specifies that only not-for-profit, non-deposit-taking entities can access the funds. That could rule out a wide swath of minority-owned banks and community lenders who have for decades worked in low-income communities that big banks all but abandoned. “There’s a ton of confusion,” says Beth Bafford of Calvert Impact Capital. 

Dealflow: Carbon Markets

IFC partners with Aspiration in a $10 million fund to lift the quality of carbon credits. Forest projects that don’t remove carbon. Protection for forests that aren’t threatened. The low quality of many of the carbon credits from nature-based climate solutions has hampered growth in the “voluntary” carbon market, whose credits are essential for many companies to meet their net-zero emission targets. A $10 million Carbon Opportunities Fund – anchored by the neobank Aspiration and biodiversity investor Cultivo, along with International Finance Corp. and crypto-tech provider Chia Network – aims to source, tokenize and sell higher-quality credits (for context, see, “Climate is a crypto play”). The fund will initially seek to source up to 700,000 credits – each representing a metric ton of carbon – and recycle the proceeds into additional credits. The credits will be tracked through the World Bank’s climate warehouse, a blockchain repository for verified credits developed by Chia.

Agents of Impact: Follow the Talent

Neo Gim Huay, managing director of the World Economic Forum’s Center for Nature and Climate, will join LGT Bank’s board of directors. En Lee, LGT’s head of sustainable and impact investments in Asia, will also join the board… Zeal Capital Partners is recruiting for several roles, including a chief of staff, investment analyst, and vice president of operations in Washington, D.C… Global Partnerships seeks an investor relations analyst in Seattle… Connect Humanity seeks a remote investment director or manager.

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