ImpactAlpha Open | November 29, 2022

ImpactAlpha Open: ESG and crypto + three drivers of ‘inclusion alpha’

Dennis Price

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ImpactAlpha Editor

Dennis Price

Hi there, Agents of Impact! Welcome to this week’s edition of ImpactAlpha Open, our free weekly roundup of news, views and trends from ImpactAlpha and elsewhere to help you amplify your impact.

Psst. Hundreds of ImpactAlpha Open subscribers upgraded to an all-access ImpactAlpha subscription in the past week. There’s still time. We’ve extended our best-ever offer one more day. Today’s the final day to grab 75% off.

In this week’s newsletter:

  • Three drivers of inclusion alpha;
  • ESG and crypto;
  • Limits of stakeholder capitalism; and
  • The innovative finance playbook.

Ok, let’s get to it. – Dennis Price

Must-reads on ImpactAlpha

  • Returns on inclusion. On an Agents of Impact podcast, VC Include’s Bahiyah Yasmeen Robinson shares three drivers of ‘inclusion alpha’ with ImpactAlpha’s David BankAmong them: the historic tendency to underestimate founders and fund managers of color. “I talk about it as underpriced or mispriced product in the market – or what, as an investor, I call a discount,” Robinson says. 
  • Housing wealth. Just Community’s “wealth club” pilot in Austin is the latest in a drumbeat of innovative efforts aimed at expanding access to housing wealth around the U.S. “There’s a demographic that is hungry for these kinds of investments,” Just’s Haydee Moreno told me.

    • Renter payouts. Enterprise’s Renter Wealth Creation Fund will give longtime residents of affordable housing properties in the fund an opportunity to receive a payout when the property is refinanced or sold. “This presents a wealth-building opportunity for renters,” Enterprise’s Lori Chatman and Chris Herrmann wrote in ImpactAlpha. (Open)
  • ESG and crypto. In her latest Institutional Impact columnImpactAlpha contributing editor Imogen Rose-Smith asks, “Will ESG be among those forced to take the fall” for the FTX-led crypto implosion? That would be rich, as FTX “seems to have had all the governance of a monkey fighting its way out of a paper bag,” as Rose-Smith says. 

    • Labor Department green lights ESGCannot! Can so! Just as some states are trying to block ESG investing, the U.S. Department of Labor has given its blessing to the consideration of environmental, social and governance factors in selecting investments for pension fund beneficiaries, report David Bank and Amy Cortese
  • Limits of stakeholder capitalism. “In the eyes of many, Walmart has really embraced stakeholder capitalism,” says author Rick Wartzman in a Q&A with Capital & Main, shared with ImpactAlpha. In his new book, “Still Broke,’ Wartzman concludes that good intentions, even accompanied by substantial actions, are not enough to ensure that hourly workers earn a living wage.
  • Future of social entrepreneurship. As it marks 25 years of cultivating social entrepreneurship, the Miller Center for Social Entrepreneurship asked the field about transformation in the next quarter-century. A common aspiration: evolving beyond the need for the modifier “social.” Miller Center’s Brigit Helms rounds up the responses in a guest post for ImpactAlpha. (Open)

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Agents of Impact

👨🏿‍🌾 Konda Mason, Jubilee Justice: Putting life at the center of regenerative agriculture

Konda Mason is helping hundreds of mostly Black farmers in Louisiana and Mississippi raise yields and income while reducing methane and water use with a proven system of rice intensification. Jubilee Justice provides flexible capital, technical assistance and market access. “It’s happening with Black farmers being in the front of the line this time, instead of the back,” Mason says.

🏃🏿‍♀️ On the move

  • Gary Community Ventures’ chief investment officer Santhosh Ramdoss will replace Mike Johnston as president and CEO.
  • Victoria de Castro, ex- of World Benchmarking Alliance, joins The Predistribution Initiative as an associate director.
  • Sir Ronald Cohen will chair the new International Foundation for Valuing Impacts, established to advance “impact-weighted accounts.” Harvard Business School’s George Serafeim will chair the IFVI’s valuation technical and practitioner committee.

Deal Spotlight

🏙️ Investor demand for Atlanta’s $369 million ‘social bond’ cuts city’s interest payments

Under the banner of “Moving Atlanta Forward,” the city raised $410 million in general obligation bonds this month, including $369 million designated as “social” to fund recreation, transportation, public safety and other capital projects. Social bonds, which raise funds to finance projects with social benefits, have proved popular with environmental, social and governance, or ESG investors. Atlanta’s inaugural social bond series drew orders of more than $1.2 billion from 54 institutional investors. 

  • Muni edge. The strong demand enabled bond yields to be reduced by between 2 to 5 basis points, depending on the maturity. The issuance follows New York City’s first social bond in October, which raised $400 million for affordable housing projects and similarly allowed the city to lower its cost of capital.
  • Go deeper.

Six Signals

🌍 Africa risk, adjusted. Investor risk perception must be updated to reflect the increasing resilience, digitization and integration that now are taking hold in African markets. (Gillian Marcelle / LSE Business Review)

📋 The innovative finance playbook. Alternative capital products and investment strategies that can bridge capital gaps for entrepreneurs and small businesses. (Blueprint Local)

🏙️ Cities as carbon sinks. Up to 60 gigatons of CO2 could be stored in buildings by 2050, equivalent to four-fifths of the carbon stored in the Amazon rainforest. How? Swapping traditional materials such as steel and cement for low carbon, bio-based or recycled alternatives. (A/O PropTech)

🌱 Nature-based solutions. Demand for more productive and sustainable management of farms, forests and landscapes could drive investment into “nature tech” to $6 billion annually by 2030. (Nature4Climate)

🚲 Two-wheel converts. France is paying car drivers nearly $4,000 to switch to an electric bike. (Electrek)

🏃🏽‍♀️ Renewables race. China is now adding more renewables annually than Europe, the US and India combined. (Science Is Strategic / Financial Times)

Get in the Game 

💼 Step up

  • Lego is hiring a climate strategy director in London.
  • Social Finance has an opening for a director of healthcare impact investments.
  • The Office of the Illinois State Treasurer is recruiting a deputy director of corporate governance and sustainable investment.

🤝 Meet up

  • The White House Office of Science and Technology Policy will host an electrification summit, Wednesday, Dec. 14.
  • MacArthur Foundation’s John Palfrey will discuss “Climate and environmental justice,” with McKnight Foundation’s Tonya Allen, Surdna Foundation’s Don Chen, and David Rockefeller Fund’s Tamara Larsen at the Mission Investors Exchange national conference in Baltimore, Dec. 5-7. ImpactAlpha is a media partner. MIE members and philanthropic asset owners can register here.

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