Greetings, ImpactAlpha readers!
#Featured: Open Mic
$30,000 and a platform: How Jeff Bezos and Amazon can revive small businesses and farmers. Yesterday Jeff Bezos took to Twitter to solicit ideas on how to give away his billions. Today, Amazon, the company that made Bezos a billionaire, bought Whole Foods, the high-end grocer that Bezos says makes “it fun to eat healthy.” Ross Baird, the CEO of Village Capital, says Bezos can choose between two paths: continued consolidation and accelerating inequality (much of it driven by Amazon), or inclusive prosperity that brings back small- and medium-sized producers and farmers. “It has never been better to be a big company in America,” Baird writes. “It has rarely been a worse time to be a regular person trying to compete in the economy.”
Baird’s suggestion for Bezos: A national ‘producer’ competition. The program would give anyone trying to produce and sell things a few lifelines, including $30,000 in start-up cash grants and more in loans from Amazon Lending. Access to Amazon’s distribution network, space in Whole Foods and Amazon marketing dollars, would help producers succeed. “Amazon of course still succeeds as a platform and trading company for people creating things,” Baird says, “but many more of those people succeed.”
Intrigued? Read Ross Baird’s “How Jeff Bezos Can Make the Biggest Immediate Philanthropic Impact — And Keep the Pitchforks at Bay.”
Green apples, going vertical and economic inclusion. What did Apple offer this week? What vertical got backing from Google’s venture fund? What would the 23 Fund fund, if such a fund is ever funded? What do you get when you combine inequality and investment? And did we mention we knocked down our 100th Brief this week?
Are you keeping up? Take The Brief Quiz №19 from Jérôme Tagger:
Thank you for stepping up. The impressive response to our call for nominations for the first #GSGHonors testifies to the breadth and depth of leadership talent in impact investing.
There’s still time to nominate entrepreneurs, asset owners, asset managers or market-builders — including you — for recognition at next month’s GSG Summit. We’ve extended the deadline to Sunday, June 18. Submit an entry.
#Dealflow: Follow the Money
Massachusetts social-impact bond to fund immigrant, refugee workforce development. The goal is to build a model for improving employment rates and earning potential among Boston’s 230,000 non-native English speakers who, on average, earn $24,000 less per year than similarly-skilled English speakers. Jewish Vocational Services will work with 2,000 adults in Boston for three years, offering vocational English classes, job search support and coaching. Investors will recoup up to $15 million based on the organization’s ability to deliver on three outcomes: participants’ earnings, transition to higher education, and program engagement. Social Finance, which structured the deal, raised $12.4 million, half from Prudential Financial and Maycomb Capital. Among the 40 investors were Living Cities, Combined Jewish Philanthropies and high-net-worth and institutional investors brought in by Bank of America Merrill Lynch. The pay-for-success program is the third social impact bond to launch in Massachusetts and the first committed to U.S. workforce development.
Goodera raises $5.5 million to help corporations manage social-responsibility efforts. Goodera was started in 2014 to hold corporate social responsibility initiatives accountable to impact claims. The Menlo Park, Calif. and Bangalore-based platform was backed by Omidyar Network, Nexus Venture Partners, and Varsha Rao, Airbnb’s former head of operations. “CSR activities need to go beyond a quarterly report email with a picture of a poor child to answering real questions such as where the money was spent and how effectively a programme was helping beneficiaries,“ said Goodera’s Richa Bajpai. Goodera’s software helps companies automate monitoring and impact assessment, facilitate grants to partners, and engage employees in volunteering opportunities. So far it has signed up 150 companies, 24 of which are Fortune 500 companies. Goodera’s clients represent 10% of the CSR spend in India, where firms are required to give 2% of profits to charity.
Canadian government launches $2 billion fund for its low-carbon future. The five-year Low Carbon Economy Fund will finance regional public, private and nonprofit initiatives to reduce greenhouse gases and pollution and develop climate-friendly technologies. The fund is part of the “Pan-Canadian Framework on Clean Growth on Climate Change” to drive collaboration among Canada’s national, provincial and local governments. Most of the money will fund project proposals, beginning this summer. The rest will back a competitive “Challenge” this fall. Specific areas of focus for the fund include: real estate green retrofitting; industry-level energy efficiency improvements; and reforestation and forest management.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
Renewables, Asia and batteries shine in the new energy outlook. Bloomberg New Energy Finance is out with its New Energy Outlook, the annual assessment of the changing energy sector. The skinny: Renewables are set to dominate energy investments through 2040 “thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including electric vehicle batteries, in balancing supply and demand.” Five findings that caught our interest:
- Renewables dominate energy investments. Wind and solar plants could account for three-quarters of the $10.2 trillion in new energy investment through 2040. China is expected to attract 28% of all energy investment, and India 11% through 2040.
- Solar trumps coal. Solar is already (at least) as cheap as coal in Germany, Australia, the U.S., Spain and Italy. By 2021, solar will also be cheaper than coal in China, India, Mexico, the U.K. and Brazil. The price of solar is expected to fall another 66% by 2040.
- Batteries drive renewable reliability. Utility and small-scale batteries increasingly provide flexibility during peak demand. That will help drive renewable penetration by 2040 to 74% in Germany, 38% in the U.S., 55% in China and 49% in India. Charging electric vehicles when renewable energy is flowing and prices are low will help utilities manage their grids.
- Mexico is forecast to get 80% of its energy from renewables by 2040. Middle East and North Africa are expected to shift away from oil and embrace natural gas, which will make up 53% of installed capacity by 2040.
- Projected investments in renewables not enough. The world’s power emissions are set to peak within a decade (then decline by 1% per year through 2040). Another $5.3 trillion investment is needed to put the power sector on a trajectory toward the 2-degree temperature rise called for in the Paris climate agreement.
Lighting Africa. Nighttime satellite photos show a great expanse of darkness occupying most of the African continent, while Europe and North America twinkle with light. The Atlas of Africa Energy Resources, from the UN Environment Program and the African Development Bank, confirms an African energy crisis that will get worse as energy demand increases with population increase, urbanization and economic growth.
Africa has the world’s lowest per capita energy consumption: With 16 per cent of the world’s population, it consumes about 3.3 per cent of global primary energy. 645 million people, about a third of the total African population, do not have access to electricity. The poorest African households spend 20 times more per unit of energy than wealthy households. More than half of Africans depend on biomass for cooking, space heating and drying. Burning that biomass releases black carbon into the environment. It also causes deadly indoor air pollution that contributes to the premature deaths of about 1.3 million people, mostly women and children, each year, and, according to the Atlas, will soon kill more people than malaria and HIV/AIDS combined.
The Atlas also serves as a guide to Africa’s huge renewable energy potential. As much as 93% of the country’s hydropower potential remains untapped, along with abundant wind, solar and geothermal potential. This week, Access Power committed $7 million to a solar project in Tanzania, a hydro project in Rwanda, and a wind project in Ghana. And the European Commission is investing €300 million ($318 million) to develop 19 renewable power projects across Africa. Tapping renewable resources would go a long way towards achieving SDG 7 (affordable, reliable, sustainable and modern energy for all) and SDG 13 (taking action on climate change). The Atlas “makes a strong case that investments in green energy infrastructure can bolster Africa’s economic development and bring it closer to achieving the Sustainable Development Goals,” says the UN’s Juliette Biao Koudenoukpo.
That’s a wrap, have a great weekend! Please send any news and comments to [email protected].