The Brief

The Brief: Climate Week cheat sheet

ImpactAlpha ¡ September 19, 2024

Greetings Agents of Impact!

📞 Today’s Call: Lessons in catalyzing capital at scale for climate and development. Large funds. Catalytic levers. Outsized opportunities for impact in emerging markets. On today’s Agents of Impact Call, join MacArthur Foundation’s Debra Schwartz, Climate Fund Managers’ Rajashree Padmanabhi, Mitsubishi UFJ’s Ariane Pevide, and Convergence’s Nnamdi Igbokwe to share practical lessons in “blending billions,” at 10am PT / 1pm ET / 6pm London. Last chance to RSVP.

In today’s Brief:

  • Climate week cheat sheet
  • $100 billion for AI and data
  • Verifying gender-lens investing

Elemental Impact aims to accelerate climate tech deployments. Climate tech startups face numerous “valleys of death” on the path from pilot projects to customer deployments to commercial production. In the lead up to next week’s Climate Week NYC, Elemental Impact – the Honolulu-based nonprofit formerly known as Elemental Excelerator – announced a $100 million slug of capital to help ventures cross those valleys. The funding comes from the Coalition for Green Capital, a network of green banks that was awarded $5 billion from the Environmental Protection Agency’s Greenhouse Gas Reduction Fund, or GGRF. Elemental will channel the funds toward place-based climate tech deployments involving clean energy, water, sustainable agriculture and industrial applications. Elemental expects to fund 10 to15 such projects in underserved communities. “We’re laser-focused on the scale gap,” Elemental’s Avra van der Zee tells ImpactAlpha. “We’re really excited to be building this bridge between public dollars and private sector mobilization.” She said the fund is the first – with more to come – under the Elemental Impact brand. Recipients of the GGRF grants are gearing up to begin underwriting green projects across the country as part of a new green-finance infrastructure. Read the full story. 

  • Climate Week. The worlds of green community finance and climate tech remain maddeningly far apart, if next week’s Climate Week NYC is any indication. The GGRF “has not made it into climate tech conversations in the way that I had expected,” says van der Zee. There is plenty else on tap next week for those braving Climate Week, once a side event to the annual UN General Assembly meeting in New York that has now eclipsed the diplomats. Insiders say many leaders will skip December’s COP29 climate gathering in Baku, Azerbaijan, and are trying to cram important conversations into meetings around UNGA and Climate Week. The climate tech crowd, meanwhile, will fan out across the city to talk FOAK (first-of-a-kind) projects, new climate solutions, adaptation investments, emerging market opportunities and other issues.  
  • Sargasso Sea. The Lotus Award from Savia Ventures highlights the abundance of talented but underfunded Latina climate entrepreneurs. The winner: Andrea Bonilla of MĂŠrida, Mexico-based BioPlaster Research, which converts sargassum seaweed into biodegradable packaging. Bonilla will receive the award next Thursday at Reassembly, Regeneration VC’s Climate Week event. Bonilla is raising a seed round to industrialize the process. She has secured a letter of intent for $5 million annually from China-based Great Packaging, along with similar offers from Latin America-based consumer-packaged goods companies AbaMex and Refurbi. The Lotus Award drew 65 entries. “We need portfolio diversity to get the best results,” Savia’s Andres Baehr tells ImpactAlpha.
  • Climate and culture. Climate Week will feature film festivals, science fairs and karaoke, among other pursuits. On Sunday, Sept. 22, Make Justice Normal hosts Street Works Earth, a day-long art and climate festival to provide a “hopeful and joyous space for climate action and discussion.” Eight artists and collectives were invited to collaborate with climate experts from the Environmental Defense Fund and Queens Climate Project. The festival will take place on 34th Avenue, one of the longest open streets in America, in Jackson Heights, Queens, one of the most diverse neighborhoods of New York. Featured: Art from All Street Gallery, Kaleidospace, Cecilia Lim, Nitin Mukul, BayetĂŠ Ross Smith, Sabina Sethi Unni, The Veggie Nuggets, and Jing (Ellen) Xu. Read more on the festival from ImpactAlpha contributing editor Monique Aiken and her Make Justice Normal co-founder Anjali Deshmukh.
  • Gender smart. “The gender and climate finance nexus matters because it’s about investing in the next frontier of climate solutions, tapping into the sheer economic growth and impact opportunity, and mitigating risk exposure to future-proof our portfolios,” says Sana Kapadia of Heading for Change. Learn how and where investors are spotting the market opportunities in a discussion with ImpactAlpha’s David Bank, Kapadia and Jackie Vanderbrug of Heading for Change, Andrew Lee and Amantia Muhedini of UBS, Courageous Capital Advisors’ Laurie Spengler, MCE Social Capital’s Camilla Nestor, and The 22 Fund’s Tracy Gray. Register your interest for the session in New York, Tuesday, Sept. 24 at 4pm ET.
  • Climate alpha at Climate Week: On Monday, find David Bank speaking at the MIT Solve Challenge Finals… On Tuesday, see ImpactAlpha’s Amy Cortese lead a discussion on “How carbon markets finance social impact,” with Chris McKinney, James Cahalin, Daniel Sadik, Nicholas Jones and Amrita Bhandari… On Thursday, catch Sherrell Dorsey moderating “Bold eco solutions: Diverse minds forum,” with Taj Eldridge, Lacey Reddix and Mike Hawthorne Jr., and a reception hosted by VC Include and Lowenstein Sandler to advance equitable climate solutions (email [email protected] for an invite). And check out, if you haven’t already, CTCV’s handy event tracker.
  • Keep reading ImpactAlpha’s Climate Week preview.

Dealflow: Digital Infrastructure

Microsoft-led $30 billion AI infrastructure fund raises climate questions. Microsoft, BlackRock and MGX, a state-backed investor from the United Arab Emirates, launched the $100 billion fund with $30 billion to invest in data center infrastructure to feed the demand for AI applications and hopes to attract an additional $70 billion in outside capital. The Global AI Infrastructure Investment Partnership, as it is called, will “bring together financial and industry leaders to build the infrastructure of the future and power it in a sustainable way, said Microsoft’s Satya Nadella. Details were scarce about how the partnership will handle the massive power and water consumption of AI. Microsoft declined to comment. 

  • Flash point. Across the globe, data centers that train and process AI technologies like Chat GPT have become a flashpoint for concerns about climate change caused by greenhouse gas emissions. This week, Google said it would “rework from scratch” its plan to construct a $200 million data center in Santiago after Chilean officials raised concerns about its environmental impact. In Memphis, Tenn., Elon Musk’s plan to build “the most powerful AI in the world” is sparking pushback from local officials and residents worried about the project’s consumption of electricity and water in a community already burdened with pollution.
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S2G Ventures backs Amperage to bridge the digital divide in rural America. Uneven access to broadband infrastructure in the US disproportionately impacts rural, Indigenous and Black and Brown communities. Loveland, Colo.-based Amperage Infrastructure Corp. launched in 2022 to provide financing and infrastructure services to Internet service providers in rural areas to expand their networks. “The broadband industry in these areas remains largely untapped, which we believe preserves significant opportunities for growth,” said Amperage’s Jack Lawrence. Amperage leverages funding from federal and state government programs, including the Federal Communications Commission’s $20 billion Rural Digital Opportunity Fund, and the Broadband Equity, Access, and Deployment, or BEAD, fund. The latter has roughly $42 million from the bipartisan infrastructure law to expand high-speed Internet across the US. 

  • Broadband portfolio. Lawrence says the undisclosed investment from S2G Ventures, a Chicago-based sustainable venture firm, will help Amperage “enhance connectivity where it is needed most.” Amperage’s portfolio of Internet service providers include Aristotle Unified Communications, which has 30,000 homes in its network in rural Arkansas. A recent investment from Amperage will enable Aristotle to expand in Arkansas and to underserved communities in Mississippi, Missouri, Oklahoma and Illinois. Earlier this month, Amperage acquired Ascension Infrastructure Group, a broadband infrastructure developer and program manager in Seattle and Denver.
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Dealflow overflow. Investment news crossing our desks:

  • BluePeak Private Capital made a $25 million investment in Singapore’s Robust International to expand agrifood processing and exporting in CĂ´te d’Ivoire, Nigeria, Burkina Faso and Mozambique. (BluePeak)
  • UK-based Water Unite Impact secured $7.5 million from the US International Development Finance Corp. to provide growth financing to water companies in emerging markets. (Water Unite Impact) 
  • CarbonEthics, an Indonesia-based developer and operator of nature-based decarbonization projects, clinched $2.1 million in seed financing from Intudo Ventures and angel investors. (Tech in Asia)

Signals: Gender Smart

Gender-lens certification from 2X Global aims to boost transparency and intentionality. 2X Global has been working since 2018 to encourage global capital markets to direct more capital to and for women. The organization launched a third-party certification process at its global summit in Nairobi this week to bring transparency and rigor to gender-lens investing. Its 2X Criteria sets baselines for investors, fund managers and enterprises to target. Until now, organizations could self-declare 2X alignment. The new certification process requires both self-assessment and third-party validation “to provide more transparency to investors and stakeholders to guard against credibility issues and ‘pink washing’,” says 2X Global’s Jessica Espinoza.

  • Mobilizing billions. Espinoza has been involved in 2X since it launched at the G7 Summit in 2018. The 2X Challenge set a modest goal of mobilizing $3 billion for gender-lens investments by 2020. By the end of last year, the Challenge had mobilized 11 times that amount. DFIs and multilateral banks have pledged to invest an additional $20 billion by 2027. To provide greater visibility into where and how those dollars are flowing, the 2X team sought to develop a rigorous but accessible benchmarking mechanism. “Consider this mechanism an ode to progress, a nudge forward,” Danielle Burt, one of the architects, wrote on LinkedIn.
  • Assess, rate, verify. The three-stage certification includes a self-assessment questionnaire about gender-related governance and accountability, ownership, leadership, employment, supply chains, products and services, and commitments to meet specified gender targets. Assuming they meet the baseline 2X Criteria, applicants get an indicative rating of “good,” “advanced,” or “best in class.” The third step is independent verification by one of 2X Global’s three partners: Value for Women, PwC and Sagana.
  • Traction factors. The influence – or impact – of 2X certification will depend on uptake. Early adopters include Beyond Capital Ventures, a woman-led fund manager known for its profit-share structure with investees, and AAvance, a woman-led fintech focusing on migrants and the unbanked in Colombia. The self-assessment tool is free for the first year. Verification and the certificate are priced. Accessibility is important, acknowledges Espinoza. But, she adds, “it’s becoming important to differentiate more between those who are just getting started on their journey and those at the leading edge of the field.”
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Agents of Impact: Follow the Talent

Donald Felix, formerly with Citizens FInancial Group, will become president and CEO of Carver Federal Savings Bank in November… Vision Ridge Partners taps Pete Murphy, previously with Nuveen Private Equity Impact, as head of impact… The Pivot Fund adds Susan Smith Richardson, previously with The Guardian, as managing director.

Beyond Capital Ventures promotes Christophe de Montille to principal and Pooja Monga to senior investment associate… US Bank is hiring a net zero program manager in New York… Social Finance is looking for a head of communications in Boston… Inari Agriculture seeks a sustainability analyst… Acumen America is hiring an investment associate in San Francisco.

Morgan Lewis will host “Impact investing: Tales from the front lines 2024,” featuring Betty Francisco of Boston Impact Initiative and Amplify Latinx, on Tuesday, Sept. 24 in Boston… The Colorado Health Foundation will host “The power of employee ownership: A Colorado and national conversation,” Wednesday, Oct. 23 in Denver.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Sept. 19, 2024