The Brief | August 29, 2018

Collaboration for climate action, supply-chain transparency, What’s Next for impact investing

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Foundations collaborate on catalytic financing to accelerate climate action. Climate change entrepreneurs and fund managers are developing innovative solutions to worldwide challenges. To amplify and speed financing for such efforts, the David and Lucile Packard Foundation and the John D. and Catherine T. MacArthur Foundation are working to form coalitions of philanthropic investors focused on high-leverage issues like sustainable land use, energy efficiency and renewable energy. Packard’s Susan Phinney Silver and MacArthur’s Debra Schwartz argue that foundations working together can fill capital gaps and help move the needle in the climate fight beyond what any one foundation could do alone.

The foundations are using mission, or impact, investments to accelerate climate solutions and take them to commercial scale. ”We strongly urge other philanthropic investors to join us in this work,” write Phinney Silver and Schwartz in a guest post on ImpactAlpha. Packard’s low-interest loans helped SunFunder attract larger investments and expand deployment of solar systems in developing countries. MacArthur helped establish the Energy Savers Loan Fund to cut greenhouse gas emissions and save money for low-income residents. The efforts are collaborative, offer financing not available from commercial investors and nurture opportunities that can attract mainstream investors. Such efforts are expected to figure prominently at the Global Climate Action Summit in San Francisco next month. “Now, more than ever,” say the two foundation leaders, “philanthropy has to step up and go big.”

Keep reading “Go Big: Collaboration on catalytic financing to accelerate climate action,” by Packard Foundation’s Susan Phinney Silver and MacArthur Foundation’s Debra Schwartz, on ImpactAlpha.

Dealflow: Follow the Money

Argentina’s Puerto Asís backs uSound’s low-cost hearing tech. The Argentina-based startup is developing low-cost earbuds to help people with hearing damage improve their hearing. Approximately 900 million will have “disabling hearing loss” by 2050. uSound has raised an undisclosed amount of capital, via a convertible note, from Argentinian social investment firm Puerto Asís Investments for its earbuds, which cost a fraction of standard hearing aids. Read on.

Bellwether Coffee raise signals consumer demand for supply transparency. Bellwether Coffee makes a coffee roaster that cafes and grocers can use to roast their own coffee; it also connects customers to 20 coffee farms where customers can select beans by sustainability and social factors. Investors led by Congruent Ventures, with backing from SolarCity’s founders, provided $10 million in Series A funding. Bellwether is among a growing number of startups seeking transparency in food and commodity supply chains. Here’s more.

EcoVerde Organics secures funding for waste recycling. The company is part of a growing effort to repurpose waste for productive use. EcoVerde, based in Buffalo, N.Y., collects food scraps and animal waste and converts it to compost for sale under the Full Circle Compost brand. WNY Impact Investment Fund, a new social investment fund for western New York state, is backing the company with a $450,000 investment. Dig in.

ImpactAlpha Series: What’s Next

Shaping the future of markets. ImpactAlpha is publishing responses by a half-dozen impact investing practitioners and experts to the Global Impact Investing Network’s call for the development of a trusted identity for impact investing. On Monday, the GIIN’s Amit Bouri kicked off the What’s Next series in partnership with ImpactAlpha. His three-step call to action: Make your impact intentions known. Measure and manage for impact. Collaborate and co-invest with other investors. What’s your take? Send your responses to [email protected]; we’ll round them up in The Brief on Friday.

1. Common goals, not just common language, will drive institutional impact. “We may need to embrace those whose motives are not as pure as we would like,” says Tim Macready, chief investment officer of Australian superannuation fund Christian Super. “We may need to call out behaviour and products that do not live up to the name impact investing or work towards our shared goals.” More.

2. Segmenting the market can unlock impact capital. “We need a set of shared definitions, tools, standards, and data that can enable investors to better navigate an increasingly diverse market,” write Chris Jurgens and McKenzie Smith of Omidyar Network. “Such tools will help them deploy capital to the investment opportunities that best fit their impact goals, financial return expectations, and risk tolerance.” More.

3. Philanthropy can champion the impact in impact investing. “Philanthropy has a unique role to play in keeping the entire field laser-focused on creating a more equitable and just society and a healthier planet,” writes Matt Onek of Mission Investors Exchange. More.

4. Global Goals provide impact investors with a model for collective action. The U.N. Sustainable Development Goals defined the challenge, articulated clear definitions and achieved far-reaching acceptance. A framework for “what good looks like” could do the same for impact investing, writes Credit Suisse’s Marisa Drew. More.

5. A theory of change sets impact investors apart. “Investors should ask themselves, ‘What do you want to achieve, how do you think you can achieve it, and what role does your investment play in achieving it?’” writes Triodos Investment Management’s Marilou van Golstein Brouwers. More.

6. Diverse capital, shared goals can make all investment impact investing. A shared identity means a commitment to avoid harm; measurement and accountability for impact; long-term impact investment structures and education and advisory services “so that impact becomes part of how people do business and invest,” says Tony Burdon, the head of private sector department at the U.K.’s DFID. “Shouldn’t our overall goal be: All investment is impact investment?” More.

August 29, 2018.