The Brief

The Brief: Adaptation, biodiversity and water funds on this month’s Liist

ImpactAlpha · November 5, 2024

Greetings Agents of Impact!

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In today’s Brief:

  • Blending finance for climate action 
  • Business leaders protecting democracy
  • CalSTRS’s growth equity decarbonization strategy
  • Reed Hundt on the Coalition for Green Capital’s big plans

Blending finance for climate adaptation, biodiversity and water solutions. Capital doesn’t always flow to where it’s most needed, as shown by the failed negotiations at last week’s COP16 biodiversity summit in Cali, Colombia (see, “Breaking down barriers to addressing the climate crisis“). This month’s Liist of impact funds that are raising capital features managers that are blending public, private, philanthropic and even corporate capital to shift risk perceptions and redirect financing to under-appreciated climate opportunities. “The issue is not a lack of solutions but their distribution,” says Luca Torre of Gawa Capital.

Gawa, a Spanish impact fund manager, is in the market with a planned $300 million fund to support climate adaptation in rural communities in Latin America. Its Kuali Fund builds off of the firm’s Huruma Fund, a blended finance fund for rural and agricultural livelihoods. Kuali is leveraging first-loss capital from the Green Climate Fund and subordinated debt from the Spanish government to encourage commercial investors to back financial and tech products that improve climate resilience for people in vulnerable, hard to reach places. 

  • Natural resources. Cerulean Ventures is parlaying philanthropic funding to support early stage tech founders working to protect nature and biodiversity through carbon removal, renewable energy credits, blockchain applications, and sustainable supply chains. The California-based investment firm in September hit its $10 million target but has kept the fund open for additional investments. Wellers Impact in the UK is leveraging philanthropic funding from food and beverage corporations to derisk startups focused on water treatment, conservation and access in emerging markets. “How do you invest in water and make money?” Wellers’s Neil Sandy said in an interview with ImpactAlpha. “No one’s ever cracked the nut.”
  • ‘Deep green’ and impact-linked. Confluence Investors is raising for an open-ended fund it launched in early 2023 to invest in publicly listed companies in emerging markets that are supporting climate action, financial inclusion, education access and quality healthcare. The fund, based in Guernsey, aims to comply with Europe’s SFDR Article 9 requirements for “deep green,” high-impact funds; it is linking a quarter of its share of profits to its impact and ESG targets. Netherlands-based SevenGen’s Growth Fund is aiming to raise 150 million for a growth-equity climate tech fund that will back companies in Northern Europe. Like Gawa’s Kuali Fund, it’s a designated Article 9 fund with impact-linked carried interest. 

Impact Voices: Election Watch

Protecting democracy is every business leader’s responsibility. With US election day upon us, CEOs have a responsibility to “mitigate election interference and challenges to our democracy,” writes B Lab’s Jorge Fontanez. B Lab US and Canada signed last month’s letter from the Interfaith Center on Corporate Responsibility’s to members of the Business Roundtable, urging them to support democratic institutions and uphold voting rights and free, fair and peaceful elections. “Together, our business communities can protect our democracy, no matter the election results,” Fontanez writes in a guest post. He makes the case for why and how.

  • Democracy is good for business. CEOs have the responsibility to take a stand on critical issues and use their influence for collective benefit. Businesses benefit from a resilient constitutional democracy because it provides the economic and legal assurances necessary for the long-term market stability and investment that the public and private sectors rely on, argues Fontanez. Business leaders hold an influential lever that can be pulled to uphold equity and protect our democratic rights, he says, in part because CEOs and businesses are seen as more competent and ethical than governments. 
  • Peaceful transfer. How can American business leaders keep the election fair and peaceful? “First, use influence to stop, discourage and condemn election interference,” says Fontanez, an approach nearly 70% of Americans agree with. Leaders must also call for a concession if a candidate who has factually lost a race refuses to concede. “A refusal to accept defeat fundamentally rejects the will of the American people,” he says. “Business leaders must lead by example and personally accept the election result themselves.” 
  • Keep reading, “No matter who wins this election, protecting democracy is every business leader’s responsibility,” by B Lab’s Jorge Fontanez on ImpactAlpha.

Dealflow: Green Infrastructure

CalSTRS allocates $150 million to Ninety One’s Global Environment fund. Ninety One’s $4.2 billion Global Environment strategy makes invests in wind and solar energy, green batteries, sustainable building materials, energy-efficient appliances and lighting and other solutions for the low-carbon transition. Holdings include Schneider Electric, Power Grid Corporation of India, and Orsted. The California State Teachers Retirement System, which manages over $350 billion on behalf of California’s educators, invested via its sustainable investment and stewardship strategies, or SISS, portfolio. Ninety One’s long-term investment horizon and active engagement give CalSTRS “access to the structural tailwinds to participate in outperformance and real impact,” said Ninety One’s Sangeeth Sewnath.

LINGO lands $2.3 million investment for STEM education access. Workers trained in science, technology, engineering and math, or STEM, are in demand. Virginia-based LINGO, a Black, woman-led company, has developed a project-based coding kit designed to make STEM learning more hands-on and connected to real-world problem solving. The company has deployed more than 10,000 kits to partners including Howard University and Siemens Healthineers. LINGO’s investment round was led by Pinnacle Private Ventures. The investment, says Pinnacle’s Sean McCurry, reflects a commitment to “creating meaningful social impact through education and fostering diversity within the tech sector.”

Dealflow overflow. Investment news crossing our desks:

  • Vermont-based Beta Technologies raked in $318 million for its fully-electric and battery-powered planes. (Electrive)
  • Hala Mobility raised 510 million Indian rupees ($6 million) in equity and debt funding to provide EVs-as-a-service for gig workers and delivery companies. (YourStory)
  • SeaO2 snagged €2 million ($2.2 million) for technology that extracts CO2 from seawater and returns carbon-free water to the ocean to sustain oceans’ natural ability to absorb carbon from the atmosphere. (EU-Startups)

Signals: Deploy!

Reed Hundt on the Coalition For Green Capital’s first deals and big plans (Q&A). Last week, the Coalition for Green Capital announced two direct deals totaling $175 million, its first deployments of the Greenhouse Gas Reduction Fund. The financing for green building loans via Coventry Structured Investments and for electric school buses via Highland Electric Fleets showcase the green bank coalition’s approach: go big or go home. The coalition’s original strategy was complicated by its need to reallocate resources. Reed Hundt, former US Federal Communications Commission chairman and longtime green bank champion who leads CGC, sought the mandate to distribute the full $14 billion from the National Clean Investment Fund, the GGRF’s green lending program. Instead, the pot was divided three ways, with CGC awarded $5 billion. The group is now building a nationwide network of green banks and other on-the-ground partners through which it plans to deploy $2 billion; the rest will be invested directly. Hundt, who is stepping down from CGC, spoke to ImpactAlpha about CGC’s strategy, its first deals, and how he is preparing for today’s US presidential election.

  • Election jitters. The US election is hanging over many decisions, including CGC’s search for a new CEO. “Everybody they’re talking to wants to know who’s won the election,” says Hundt, who is not involved in the search. “People appreciate the job as being quite different, depending on whether the president is hostile or sympathetic.” On election night in 2000, Hundt stepped into an elevator to await results with his high school buddy Al Gore. “We get into the elevator, somebody yells out, ‘We’ve won!’” The elevator got stuck, and by the time he emerged, Gore had seemingly lost, only to be reversed again. The uncertainty lasted for more than 30 days, until the Supreme Court halted the vote count, giving George W. Bush the win. “I just hope this one is over sooner,” says Hundt. 
  • National strategy, local impact. Regardless of who wins the election, Hundt plans to reach out to every state senator and governor about CGC’s plans. “Two thirds of carbon emissions in the country come from Red states. You can’t be in the business of having a clean power platform only in Democratic states,” he says. Republican-led states have been the primary beneficiaries of much of the investment spurred by the Inflation Reduction Act, bridging partisan divides. Hundt emphasizes that “there is no lawful way to get the money back,” and any attempt to do so would violate the takings clause of the Fifth Amendment of the Constitution.
  • Keep reading, “Reed Hundt on the Coalition For Green Capital’s first deals and big plans (Q&A),” by Amy Cortese on ImpactAlpha.

Agents of Impact: Follow the Talent

Julianne Zimmerman is promoted to co-CEO at Adasina Social Capital, alongside Rachel Robasciotti… Ebony Perkins, previously with UnitedHealthcare, joins NeighborWorks Capital to lead investor relations and capital aggregation… Diane Damskey, founder and managing partner of DC Damskey Global Consulting, joins Ocean Us as strategic development director and advisory board member.

Beeck Center for Social Impact and Innovation at Georgetown University launches an Innovation and Incubation Fellowship and names Maya Uppaluru Mechenbier as the first fellow… Climate United seeks a senior strategist for digital communications in the Washington, DC area… ImpactAssets is looking for a remote investment services associate.

Nuveen is hiring a private equity impact associate in New York… The Nature Conservancy has an opening for a climate and energy project manager… Upstart Co-Lab announces an open call for investments to companies and funds in the creative economy.

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

Thank you for your impact!

– Nov. 5, 2024