2030 Finance | June 1, 2017

Exxon shareholders buck management on climate, Toro’s India health fund, new status quo for small…

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#Featured: ImpactAlpha Original

Exxon shareholders vote ‘Yes’ on global climate action.The Paris climate agreement was not on the ballot at ExxonMobil. But 62.3 percent of shareholders — reportedly including BlackRock, State Street and Vanguard — want the oil giant to analyze the impact of reduced demand through 2040 from policies to keep the rise in global temperatures below 2 degrees Celsius. That target, of course, is part of the Paris agreement that President Trump appears ready to renounce. The new majority of shareholders at Exxon, as at Occidental Petroleum, want their long-term equity holdings to confront the realities of the low-carbon transition. And they want government policy to smooth, not disrupt, the historic, urgent and immensely promising shift.

Read “Exxon shareholders are voting on the Paris agreement,” by David Bank on ImpactAlpha.

Exxon shareholders are voting today on the Paris agreement

We’re looking for leaders driving impact investing around the world. Nominate investors, managers, entrepreneurs and market-builders for GSG Honors by June 16 at impactalpha.com/GSGHonors.

#Dealflow: Follow the Money

Toro Finance launches $500 million fund to expand healthcare facilities in India. India’s healthcare sector is notoriously undersupplied. The government is pushing for an additional $200 billion to get India to three hospital beds per 1,000 people by 2025. (It currently has less than one bed per 1,000 people.) The fund from Toro, a private equity firm, aims to help healthcare providers expand facilities and open in new markets. “Institutional investments in healthcare infrastructure has been shy and selective around a few chains of private hospital so far,” notes Toro’s Kapil Khandelwal. Toro’s fund will use sale-leasebacks to buy stable healthcare facilities. This will free up capital for operators to expand into new or underserved markets, Khandewal says. Toro has raised $110 million of a planned $250 million, and will leverage the other $250 million.

Michigan community foundation backs nonprofits with $500,000 loan fund. The Ann Arbor Area Community Foundation will provide low-interest loans to local nonprofits. “We view nonprofit loan-making as an enhancement and supplement to our core grantmaking and scholarship work,” the foundation’s Neel Hajra says. The “Revolver Fund” will be structured as a donor-advised fund, which affords donors the tax benefits of charitable giving while allowing AAACF to invest the money raised. A growing number of community foundations are trying their hands at impact investing. The Denver Foundation, for example, has a similar local nonprofit loan fund. A new Virginia initiative called Locus Impact Investing is working to accelerate community foundations’ engagement in the sector.

MIT competition to “Solve” brain health and other challenges. MIT’s 2017 Solve competition will have four new tracks: Youth, Skills, and the Workforce of the Future; Sustainable Urban Communities; Women and Technology; and Brain Health. The costs of diminished brain productivity, the challenge brief says, “amounts to more than 10 billion lost days of work globally per year, or about $1 trillion USD in lost economic output — not including the cost of treatment.” The competition is in its third year; entries last year tackled refugee education, carbon emissions and disease. The deadline for applications is August 1.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

Four ways impact investors can change the status quo for small farmers. Most of the world’s poor depend on farming to make a living, mostly in Africa, Latin America, and South Asia. A 2014 study by Bain estimated that 2.5 billion people living on less than $4 per day rely on smallholder farming to survive. In a guest post on ImpactAlpha, Kusi Hornberger suggests four ways impact investors can help small farmers increase their incomes four- or five-fold. Some of his suggestions may stir controversy. Helping smallholders rise from poverty “ means accepting that some crops and world regions benefit from replacing smallholder farming with commercial-scale agriculture,” Kusi writes. Such consolidation, he says, must “ensure traditional landholders equitable opportunities to benefit from the shift to larger farms.” Read Kusi’s full piece on ImpactAlpha.

#2030: Long-Termism

Bhutan takes the lead in fighting lifestyle diseases. Infectious diseases draw most of the attention (and money) in global health, particularly around such maladies as malaria, HIV/AIDS and diarrhea in children. But noncommunicable diseases are responsible for 17 million premature deaths worldwide and will cost the world economy $30 trillion between 2010 and 2030. Without intervention, low-income countries could have eight times more noncommunicable disease-related deaths than wealthier countries by 2030. And such interventions are often as lengthy and expensive as noncommunicable diseases are closely linked to lifestyle and develop gradually over time.

Enter Bhutan. The small Himalayan kingdom may become the world’s model for fighting noncommunicable disease. Bhutan’s work “on heart disease prevention and control, in particular, serves as a model for others to follow,” says Cherian Varghese, a doctor with the WHO.

Bhutan is the first country to implement the WHO’s prevention plan for noncommunicable diseases in “low-resource” countries. It adopted the plan after a 2014 survey showed nearly 40 percent of its 750,000 citizens were overweight or obese; half did not engage in physical activity. “As we live longer and enjoy greater prosperity, we are also succumbing to lifestyle diseases,” says Tshering Tobgay, Bhutan’s prime minister. The problems are particularly acute among monks, many of whom are sedentary and consume diets high in fat, salt and sugar.

Following the WHO’s recommendations, the Bhutanese government has granted district authorities more control over health spending, imposed a 100 percent tax on alcohol, and is ramping up promotional campaigns for physical activity. In districts where the plan has been piloted, cases of hypertension fell by half and other conditions, including diabetes, showed improvement as well. “Today, the younger generation of monks are well aware of the need to eat a healthy diet, avoid alcohol use, and be physically active,” says Lopen Pasang, a Buddhist monk and health coordinator of Bhutan’s approximately 12,000-member monastic community. “Their lives have improved.”

Onward! Please send any news and comments to [email protected].