The Week in Impact Investing: Earthlings

TGIF, Agents of Impact! 

🗣 Planet people. On this Earth Day, the sun shines on the farmers and foresters, the ranchers and rangers, the conservationists and composters who take care of the land and help us all adapt to a changing climate. The abundant experience, know-how and community relationships of people, and especially Indigenous people, are crucial for the planet. “Many of our affiliated farmers make decisions to improve intergenerational wellbeing, which includes making nature better,” Ejido Verde’s Shaun Paul writes from Michoacán, Mexico, where communities are restoring degraded landscapes – and harvesting valuable pine resin. The ability of local producer cooperatives “to both support their communities and protect the environment, benefiting us all, may be one of our biggest assets,” SVX’s Stevie Smyth Valdez and Mauricio Martinez Miramontes of La Mano del Mono add from Mexico City. From New York, Melanie Allen describes the dream of building a Black Farmer Fund that “would center the farmers’ lived knowledge, collective decision-making and community relationships.”

The climate emergency is spurring Agents of impact to foster resilience with models, mechanisms, technology and training (see The Call, below). Taj Eldridge and Bahiyah Robinson of VC Include are bridging climate finance and equity with non-dilutive capital for diverse climate-fund managers able to spot neglected opportunities. Another kind of resilience is economic mobility and income security, as Roodgally Senatus reports in his profile of Pursuit’s upskilling program for low-income New Yorkers. From Kenya, Apollo Agriculture’s Benjamin Njenga shared on this week’s Call that his mother has improved yields on her own farm, even in the face of spotty rains and other climate hazards. It took more than just telling her what she needed to do. “I had to actually have my own farm and be able to show her how to farm better, because that is how farmers change their mindset,” he said. “They believe by seeing.” Agents of Impact know that to sustain the Earth, we must sustain the stewards. – David Bank

🎧 Impact Briefing. Host Brian Walsh brings together roundtable regulars Imogen Rose-Smith and David Bank to debate the term “activist investor” and how it applies to Carl Icahn – and Elon Musk. And we hear from Lightsmith Group’s Jay Koh of Lightsmith Group and Benjamin Njenga of Apollo Agriculture, featured guests on this week’s Agents of Impact Call. Plus, the headlines.

• Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.

The Week’s Call 

How investors are catalyzing climate capital for adaptation and equity. Climate disruption could spur investments in resilience that can buffer other shocks, from pandemics to invasions. “Our view is that this creates both an enormous impact and investment opportunity,” said Jay Koh of Lightsmith Group, which in January closed its $185 million Climate Resilience Fund. Koh joined Call No. 41 to explore ways to catalyze more capital for climate adaptation and equity. Such capital is vital for the smallholder farmers who are integral to climate solutions, said Benjamin Njenga of Apollo Agriculture in Nairobi. Africa’s small farmers struggle to access capital and credit. Underinvestment in their farms causes low productivity and demand for more land, driving a destructive cycle of deforestation. Apollo is intervening with high-quality seeds, fertilizer, training in climate-smart practices, and insurance to protect farmers from extreme weather disruptions. “These farmers are able to succeed, and they’re able to even double or triple their production,” said Njenga. Having insurance, he added, helped farmers avoid ruin after a drought last year and enabled them to plant for the next season. In what was the speakers’ recurring refrain, Njenga said, “The big call is that we need to scale up these solutions.” 

Private investors, long absent from financing for climate adaptation, are starting to see growth opportunities in resilience. Nuveen, the $1.3 trillion asset management arm of TIAA, has invested more than $1 billion around a thesis of inclusive growth and resource efficiency. In February, Nuveen raised $218 million for the Nuveen Global Impact Fund, which has committed $100 million through the Shell Foundation for the kind of off-grid energy and agtech interventions Apollo and others are providing in Africa and Asia. Nuveen, says Rekha Unnithan, has a keen interest in markets “where the low-income emerging customers are very much part of that energy-transition story.”

• Keep reading, “Agents of Impact Call No. 41: How investors are catalyzing climate capital for adaptation and equity,” by Amy Cortese and watch the replay.

The Week’s Dealflow

Deal spotlight: Return on inclusion. Corporations are an emerging source of investment capital for underserved people and communities. Comcast invested $1 million in Backstage Capital to support early-stage ventures led by women, people of color and LGBTQ+ founders. CNote will manage a $5 million investment from Xylem, a U.S. water technology company, for community development financial institutions working in underserved communities. LISC raised $100 million from the sale of its impact notes to finance investments in affordable housing, small businesses, health, education and jobs for underserved communities. 

• Inclusive VC. Algebra Ventures secured $15 million from the International Finance Corp. to invest in tech startups in Egypt led by women and/or serving rural communities. VC Include’s Climate Justice Initiative invested $100,000 in operational grants into 10 emerging climate managers in the U.S. and Europe. 

Clean energy. Australia’s TagEnergy snagged $485 million to expand its pipeline of wind, solar and battery storage projects… Japan’s EX-Fusion raised $1 million to advance laser-based fusion… Nevada-based Ohmium International raised $45 million to boost its green hydrogen output four-fold, to two gigawatts a year… Raptor Maps secured $22 million for solar management software.

Climate finance. Advancing Eco Agriculture raised $4.7 million for regenerative agriculture… Beta Technologies raised $375 million for electric aircraft… Stripe backed Lowercarbon Capital $350 million fund for carbon capture… The Energy Department’s Loan Programs Office will loan $107 million to Syrah Technologies to build a plant in Louisiana to produce graphite, a key input in lithium-ion batteries. 

Investing in Health. Clipboard Health raised $80 million in two recent rounds to match nurses with open shifts as a way to alleviate the nursing shortage… Kaiser Permanente allocated another $200 million to affordable housing for health… Medikabazaar raised $65 million for its online medical supplies marketplace for healthcare necessities in India’s smaller cities and rural areas… Theia scored $6.4 million for maternal health in Brazil.

Inclusive fintech. Colombia’s PayU invested in Treinta to digitalize micro and small merchants in Latin America… Ellis, a neobank for international students looking to study in the U.S., scored $5.6 million in seed funding… Kinara Capital secured $27 million from Nuveen and TripleJump for digital lending in India.

Circular economy. Glacier raised $4.5 million in seed funding to build waste-sorting robots for recycling facilities in the U.S… New York-based Closed Loop Partners will invest up to $5 million in flexible capital for circular economy projects.

Education and skills. Brazil’s Galena snagged $16.7 million in a Series A round to up-skill 50,000 young people over the next five years.

Impact bonds. IDB Invest generated $1 billion from a sustainable bond to promote private-sector social and environmental projects in Latin America and the Caribbean.

The Week’s Talent

William Burckart is promoted to CEO of The Investment Integration Project, or TIIP, as founder Steve Lydenberg moves up to chairman. ImpactAlpha contributing editor Monique Aiken is TIIP’s managing director… Jane Flegal, formerly of the White House Office of Domestic Climate Policy, joins Stripe’s climate team and the Frontier carbon removal initiative.

Carolyn Kim Allwin, ex- of Recap Investing, joins Capco as head of ESG in the U.S… Frederick Jelks, ex- of AlixPartners, joins Brightwood Capital Advisors as a director in the firm’s risk group. Chris Halajian, ex- of Geode Health, joins Brightwood as a director in the firm’s underwriting group… David Grunwald is promoted to managing director at SDS Supportive Housing Fund.

The Week’s Jobs

USAID seeks a senior climate finance advisor… The Development Finance Corp.’s Office of Equity and Investment Funds is hiring associate and a director-level investment funds specialists… NatureVest seeks a sustainable finance advisory lead and as impact management project manager… The Nature Conservancy is recruiting a senior carbon finance advisor for its impact finance and markets team… US SIF is looking for an operations and finance associate.

Bitgreen is hiring a director of sustainable project finance… CapRock is looking for two investment research analysts in Silicon Valley and a client advisor lead in New York… Energy access venture Nithio is hiring an East Africa investment officer… Carbon Direct is recruiting a head of climate justice… Verdant Frontiers seeks a chief investment officer in Austin or remote… HiiL is hiring an impact investment specialist in The Hague.

That’s a wrap. Have a wonderful weekend. 

– Apr 22, 2022