The Week in impact investing: Fierce urgency

TGIF, Agents of Impact!

In today’s Brief:

• The fierce urgency of delivering impact now
• On the podcast: Reclaiming the narrative
• Plastic credits to help finance collection and recycling

🗣 Summer of impact. “All of the things we’ve been talking about: Build wealth. Create jobs. Create health. Transform these communities forever.” At Jobs for the Future’s summit in Washington, DC, this week, BlocPower’s Donnell Baird said he could almost taste the opportunity to leverage the historic federal investment in greening low-income communities. But, as ImpactAlpha’s Roodgally Senatus reports, Baird dreads that it could all slip away. He committed himself to moving as much capital into communities as possible before the November election in the US. “It’s hard for me to focus on anything else.” Not gonna lie: We welcomed the renewed energy unleashed by the suddenly reset US election campaign. Amy Cortese, Dennis Price and I laid out the opportunity to reclaim the narrative, not only for tech and venture capital, but for positive social impact itself. Amy followed up with a sampling of pollution-reduction projects across 30 states, from climate-smart agriculture in Nebraska, to wildfire mitigation in Montana, to the electrification of heavy duty trucking in New Jersey. The challenges for Agents of Impact remain the same, regardless of the polls: Deliver tangible and measurable positive impact for people and communities, and soon.

What’s at stake is perhaps even more stark in countries across Africa, Asia and Latin America. In Kenya, young demonstrators have for six weeks protested against a new tax proposal, stagnating wages and widespread corruption. At the Africa Impact Summit in Nairobi, ImpactAlpha contributor Lucy Ngige explored what Africa’s youth are protesting for, and found that impact themes such as quality job creation, women’s economic empowerment, inclusive financial services and access to affordable clean energy could form the core of a positive agenda. In Peru, the path to inclusive prosperity runs through biodiversity and social innovation, Aldo Soto of Amazonia Impact Ventures and Marisela Vega of Aliados de Impacto wrote in a report from the country’s first impact investing summit in Lima (the sixth edition of our monthly newsletter ImpactAlpha Latin America dropped this week).

For a glimpse of what’s possible in even the toughest circumstances, check out the third post in Roody’s Real Revitalization series from West Baltimore, where at least 15,000 buildings sit vacant (here are Part 1 and Part 2). Nadine Ngouabe Dlodlo is redeveloping a 30,000-square-foot mixed-use space to anchor a full block revival of a once bustling commercial strip, one of several projects of her organization, Women’s Home Preservation. “We are running out of time because of the speculative interests that are coming on the back of our hard work, and those speculative interests are counterproductive to what we want as a future,” Dlodlo said. “Anti-displacement is building a community that is healthy and sustainable.” Enjoy the summertime, and the fruits of your impact – David Bank

The Week’s Podcast

🎧 This Week in Impact. Host Brian Walsh takes up ImpactAlpha’s top stories with editor David Bank. Up this week: The political proxy battle for the soul of tech, innovation and social impact; what youth-led protests mean for the impact agenda; and the recycling of recycling as an impact investing opportunity.

• Listen to our new episode of This Week in Impact. Get the podcast in your feed by subscribing on Apple or Spotify.

The Week’s Deal Spotlight

SecondMuse adds ‘plastic credits’ to the global effort to combat pollution and waste. In Asia, a cottage industry of recyclers is processing plastic waste collected by thousands of women working in the informal economy. SecondMuse, an “impact and innovation company,” is launching an $8 million Revolving Fund, backed by the Visa Foundation, to provide recyclers with flexible, zero-interest loans of up to $500,000 for working capital or equipment purchases. By “recycling” the capital, SecondMuse aims to deploy as much as $18 million. Innovative twist: Revolving Fund will use “plastic credits,” akin to carbon credits, to provide an additional revenue stream for recyclers and cover the program’s costs. The credits, including both collection and recycling credits, are tied to the amount of plastic diverted from landfills or incineration. SecondMuse will train recyclers on how to register plastic credits and navigate the marketplace.

• Circular economy. In addition to clogging landfills and oceans, the 460 million tons of plastic produced each year account for 3.6% of global greenhouse gas emissions. Countries need to invest more than $2 trillion by 2040 to address the mounting waste. Singapore-based Circulate Capital has raised a total of $250 million from some of the world’s largest plastic producers and users to accelerate a circular economy. After investing nearly $100 million in Asia, Circulate this week cut its first check in Latin America, with an investment in Polyrec SAS, a Colombian recycler of flexible plastics (see, “Circulate Capital brings growth capital to plastics recycling in Latin America”). New York-based Closed Loop Partners this week extended a catalytic loan to Eureka Recycling in Minneapolis. And the US Department of Energy’s Loans Program Office announced a loan guarantee of up to $183 million to IRG Erie to finance a plastic recycling facility in Erie, Penn.

• Global treaty. The renewed wave of recycling investment is being driven by policy initiatives around the world. In the US, the world’s largest plastics consumer, the Biden-Harris administration this month set a goal of ending federal procurement of single-use plastic products from food service operations events, and packaging by 2027, and from all federal operations by 2035. More than two dozen countries in Latin America have passed laws to clamp down on single-use plastics. India, Vietnam, the Philippines and Singapore have adopted “extended producer responsibility” policies, which shift responsibility for recycling plastics and other materials from end users to the companies that sell them. In November, representatives from 175 nations meet in Busan, South Korea, to finalize a global plastics pollution treaty.
  
• Go with the dealflow. Share this post and check out our full roundup of ImpactAlpha’s deal reporting this week. 

The Week’s Talent and Jobs

💼 See and share more than a dozen new impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here.

Darren Walker, president of the Ford Foundation, plans to step down at the end of 2025 (here’s Roy Swan’s tribute)… Bboxx promoted Anthony Osijo from chief financial officer to chief executive, replacing founder Mansoor Hamayun, who is transitioning from CEO to executive chairman… Valerie Red-Horse Mohl is retiring as president of Known, the financial services and asset management firm she co-founded (see, “Moving capital at scale to elevate communities of color”). She will be replaced by Known co-founder and chief strategy officer Nathalie Molina Niño… Illumen Capital promoted Jason Henning to head of investor relations.

Align Impact taps Greg Tanner, previously with Mobilize Capital Partners, as chief operating officer… Obvious Ventures promotes Kahini Shah to partner… LeapFrog Investments welcomes Ulrike Engling, previously with Visio Fund Management, as chief financial officer… Social Finance hires Harika Kolluri, formerly with Cowen and Company, as an impact investing associate… Impact Investors Foundation taps Africa-focused fund manager Kuramo Capital Management to manage its Nigerian Wholesale Impact Investment Fund.

That’s a wrap. Have a wonderful weekend. 

– July 26, 2024