The Brief | January 22, 2025

The Brief: The investment impact of Trump’s executive orders

ImpactAlpha
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ImpactAlpha

Greetings Agents of Impact!

🇧🇷 Agents of Impact Call No. 68: Unlocking impact and climate alpha in Brazil. Latin America’s largest country is in the climate hot seat this year. The Amazon city of Belém will host the COP30 climate summit in November just as the US is set to exit from the Paris climate accord. Brazil is seizing leadership not only on climate, but in impact investing more broadly, with a new National Impact Economy Strategy, or Enimpacto. “Amplifying the Brazilian impact ecosystem is not just about showcasing its potential – it’s about challenging entrenched systems that perpetuate inequality and environmental degradation,” says Fama Re.Capital’s Fabio Alperowitch, who will help sketch the outlines of Brazil’s growing impact ecosystem on this month’s Agents of Impact Call, co-hosted with Aliança pelo Impacto, Brazil’s national advisory board for impact investing.

In today’s Brief:

  • The impact of Trump’s executive orders
  • AI applications for disabled access
  • Investing in Andean impact startups
  • Fighting for the freedom to invest

Trump’s executive orders will affect investments in climate, equity, AI and global development. Here we go. An “urgent request” from a recruiter at the US International Development Finance Corp. on Day One of the Trump administration asked ImpactAlpha to remove the DFC’s posts from our Career Hub. The urgency: Immediate compliance with the new president’s hiring freeze memorandum. The freeze was among more than two dozen new executive orders (among 46 executive actions), which trumped the previous record of nine first-day orders signed by President Joe Biden. Trump started the clock on US withdrawals from the World Health Organization and the Paris climate accords (again) and declared, perhaps dubiously, an end to birthright citizenship (in a lawsuit filed Tuesday, 22 states sought to block the order). Some of the actions were clearly performative, such as renaming the Gulf of Mexico the “Gulf of America.” Others will have immediate impact. Newly confirmed Secretary of State Marco Rubio paused all foreign aid for 90 days to ensure the funding is “fully aligned with the foreign policy of the President of the United States.” ImpactAlpha pored through the raft of orders so you don’t have to (but probably should!). Some to watch:

  • Climate and energy. Many of Trump’s executive orders will be challenged in court, and perhaps even by Republicans in Congress (see, “Betting on the low-carbon transition, against the odds”). The president’s “Unleashing American Energy” order directs the federal government to eliminate the electric vehicle “mandate” (there isn’t one), while only “considering” the end of “unfair subsidies” that favor EVs (hello, Elon?). It also calls for an immediate pause in disbursements under the Inflation Reduction Act and bipartisan infrastructure law, pending a 90-day review. Trump declared a national energy emergency to facilitate the refining and production of domestic energy resources, including on federal lands. A single order revoked over 70 of Biden’s executive orders tackling the climate crisis, mitigating climate-related financial risk, and promoting environmental justice. He also disbanded a group that had set the social cost of carbon, a calculation used in government decision-making, at $190 a ton.
  • Blowin’ in the wind. Trump dedicated an entire directive to his longtime bête noire – wind power. The order freezes new leases for off- and on-shore wind farms, and cancels a wind farm in Idaho greenlighted last month. The new Interior Secretary will review existing wind projects for “the necessity of terminating or amending” them. The order flies in the face of Trump’s energy emergency declaration. “On one hand the Administration seeks to reduce bureaucracy and unleash energy production, on the other it increases bureaucratic barriers, undermining domestic energy development and harming American businesses and workers,” said Jason Grumet of the American Clean Power Association. 
  • AI arms race. Among the dozens of Biden-era orders the new president rescinded was a directive to safeguard the development of artificial intelligence by testing AI models and identifying “deep fakes.” Trump announced a $100 billion commitment from OpenAI, SoftBank, and Oracle to stand up Stargate, a Texas-based joint venture that Trump called the “largest AI infrastructure project in history.” The companies could plow up to $500 billion into the project, starting with 10 data centers in Texas, which Trump claimed would create 100,000 jobs. SoftBank’s Masayoshi Son, OpenAI’s Sam Altman and Oracle’s Larry Ellison joined Trump at the White House.
  • Diversity and inclusion. As promised during his campaign, Trump took particular aim at programs promoting diversity, equity and inclusion, which he called “a divisive and dangerous preferential hierarchy.” In the most sweeping anti-DEI order, Trump directed the Office of Management and Budget to “coordinate the termination of all discriminatory programs,” under “whatever name they appear.” Last night, Trump placed all federal employees in DEI roles on paid leave. Illumen Capital’s Daryn Dodson told Bloomberg, “The challenge of those that would be fully against DEI is that they’re also against… economic returns… market optimization… economic value within corporations… (and) basic underlying principles of modern portfolio theory.”
  • Keep reading, “Trump’s executive orders will affect investments in climate, equity, AI and global development,” by Dennis Price, Isaac Silk and Amy Cortese on ImpactAlpha.

Dealflow: AI for Impact

Enable Ventures backs Be My Eyes to develop AI applications for the blind. Danish tech venture Be My Eyes connects blind and low-vision individuals with volunteers for support with everyday tasks, like reading food labels or finding a flight gate at the airport. Its eight million sighted volunteers support more than 750,000 global users in real time via its free app. The company has raised $6.1 million in a Series A extension round, backed by Enable Ventures, an impact manager that invests in tech designed by and for people with disabilities (see, “Closing the disability gap“). Be My Eyes will use the funding to develop Be My AI, which uses Open AI’s Chat GPT-4 to help companies like Microsoft, Hilton and Meta provide visual interpretation products and services. Microsoft is using the service on its Disability Answer Desk to help customers with Excel spreadsheets and software downloads. It has helped Microsoft cut customer service calls from 20 minutes to four, while improving customer satisfaction, By My Eyes’ Mike Buckley told ImpactAlpha. “This is becoming a business imperative. We can walk into any company and make a credible ROI argument that’s hard to ignore.”

  • Inclusive AI. Be My Eyes was started a decade ago by Hans Jørgen Wiberg, a Danish furniture maker whose vision was failing. The company has collected millions of blind user experiences, and last year began leveraging that user data to help Open AI tune its language models to the lived experience of blind people (including distinguishing images of service dogs from other pets, and identifying the white canes used by blind individuals). The Be My Eyes app hosts more than 3.5 million AI-assisted sessions and adds about 16,000 new users each month. “Be My Eyes is the exemplar of AI for good,” said Regina Kline of Enable Ventures. “Inclusive design creates altogether better technology [that] has a longer life cycle in the market than anything else right now.”
  • Check it out. 

Impaqto Capital closes first fund to invest in Andean impact startups. The Quito, Ecuador-based fund manager raised $2.1 million for its first fund, slightly surpassing its $2 million target. Impaqto invests in impact companies in Colombia as well as in Latin America’s smaller investment markets like Ecuador, Peru and Bolivia. The firm provides flexible loans of up to $200,000 for working and growth capital to startups delivering basic services, agricultural development and climate resilience in the Andean region. Its investors include Sorenson Impact Foundation, Full Spectrum Capital Partners, CREAS Ecuador and DF Impact Capital. Impaqto’s Michelle Arevalo-Carpenter called the firms’ successful raise in a difficult funding environment “a proof point for the power of proximate fund managers who deeply understand the challenges and opportunities within the Andean region.” 

  • Livelihoods and gender equity. Impaqto has invested in a half-dozen companies supporting the livelihoods of more than 175,000 people. Four of the companies have female founders. Three of its portfolio companies are based in Peru: Elsa, a software company helping address sexual harassment and other workplace safety issues; waste collection and recycling company Sinba; and Quenco, which connects smallholder farmers to buyers. In Colombia, Fibrazo provides high-speed internet access on a prepaid basis. Bolivia-based tuGerente is digitalizing small and informal businesses and helping them secure credit. Cusi in Ecuador is a fair trade, healthy food brand.
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Dealflow overflow. Investment news crossing our desks:

  • Kenyan startup Ilara Healthcare, which provides diagnostic equipment, pharmaceuticals and other essential offerings to small, private clinics, received a $1 million loan from the US International Development Finance Corp. (Tech Journal) 
  • Ireland’s XOCEAN raised €115 million ($118 million) from Climate Investment, Morgan Stanley’s 1GT fund and others to expand its fleet of unmanned surface marine vessels that collect ocean data for offshore wind developers and marine protection agencies. (Impact Investor)
  • Amazon Climate Pledge Fund and Voyager Ventures led a $15 million Series A round for Moment Energy, a Vancouver-based startup that repurposes retired EV batteries for energy storage. (FinSMES)

Impact Voices: Fiduciary Future

Federal judge joins attacks on shareholders that helped turn Exxon around. In a move that could have far-reaching consequences for asset management, a federal judge this month ruled that American Airlines breached its fiduciary duty by allowing BlackRock, its retirement fund manager, to vote its proxies in line with environmental, social and governance, or ESG, principles. The vote at the center of the case: The high-profile board campaign by hedge fund Engine No. 1 to shake up ExxonMobil’s complacent board. The May 2021 shareholder vote put five new directors on the oil giant’s board – three nominated by Engine No. 1 and another two nominated by fund manager DE Shaw. US District Court Judge Reed O’Connor in Texas ruled that BlackRock pursued “non-financial and nonpecuniary ESG policy goals through proxy voting and shareholder activism,” harming AA’s retirement plan participants. Not so fast, says Andrew Behar of As You Sow in his latest Fiduciary Future column. Rather than hurting Exxon’s performance, the new board members helped impose financial discipline and encourage innovation at the oil giant – as shareholders have long pressed for.

  • Freedom to invest. As You Sow, says Behar, “began filing resolutions urging Exxon’s management to evolve with the changing energy market a decade before it was dropped from the Dow” in 2020. Exxon’s share price has more than doubled since the new directors came on board. “Judge O’Connor’s opinion builds on and nods to the ‘climate cartel’ fantasy pushed by the US House Judiciary Committee,” he says (see Behar’s earlier column, “On hearings and being heard”). “Allowing self-interested politicians to erode the rights of shareholders will inevitably lead to more big government and the end of free market capitalism.” On LinkedIn, Fran Seegull of the US Impact Investing Alliance noted that the lawsuit is unusual in targeting a corporate retirement plan versus a public pension plan. “This is a victory for the anti-ESG movement,” she wrote.
  • Keep reading, “Federal judge joins attacks on shareholders that helped turn Exxon around,” by As You Sow’s Andrew Behar on ImpactAlpha. 

Agents of Impact: Follow the Talent

Impact Capital Managers promotes Eliya Imtiaz to senior analyst… Social Capital Partners appoints new advisory board members, including Victor Beausoleil of Social Economy Through Social Inclusion, Jeff Cyr of Raven Indigenous Capital Partners, and Tiffany Callender of the Federation of African Canadian Economics… Lion’s Head Global Partners taps EMFin Advisory’s Orli Arav as climate and impact senior advisor.  

Rethink Education promotes Bridget Duru and Monique Malcom-Hay from senior associates to vice presidents… Overture Ventures adds Liron Gitig, previously with Environmental Defense Fund, as venture partner… Wefunder promotes Jonny Price to president… Common Future seeks a programs director in Oakland, Calif… The Boston Foundation is hiring an impact investments senior director… Tideline is recruiting an impact investing analyst… Cleveland Foundation is looking for an investment analyst in Cleveland, Ohio.  

Roots of Impact has an opening for a senior associate of impact-linked finance… AGRI3 is on the hunt for a head of origination and structuring… Boston Impact Initiative is recruiting a senior marketing and communications manager and a finance director… Climate Policy Initiative seeks a development finance associate director in Washington, DC… The Aspen Institute and Asset Funders Network will host, “Building wealth through inclusively-owned commercial real estate,” on Thursday, Jan. 30… The GIIN is surveying impact investors for its 2025 Impact Investor Survey, which is open through Friday, Feb. 28.  

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

Thank you for your impact!

– Jan. 22, 2025