2030 Finance | November 15, 2017

Fiji’s women on the front lines of climate change, reducing the poverty premium, pro-poor…

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#Featured: ImpactAlpha Original

Women on the front lines of climate change in Fiji. The Pacific islands’ official delegation has decamped to Bonn, Germany to lead the global climate talks aimed at stemming the worst consequences of climate change. (Suva, Fiji’s capital, was unable to accommodate a major global conference.) Back in Fiji, 10,000 miles away, women are on the front lines of climate changes that are here already. As first-responders, their adaptations are a testbed for communities worldwide that face the dislocations and disruptions of rising water, warming oceans, fragile food supplies and epic natural disasters. Cyclone Winston, the strongest cyclone in the Southern hemisphere’s recorded history, scored a direct hit on Fiji in February 2016, displacing 150,000 people.

A year-and-a-half later, an ecosystem of climate-resilience experiments around Fiji is showing promising, if fragile, results. The Markets for Change initiative, a project of UN Women, trains women in climate-smart farming techniques. An innovative Fijian NGO called FRIEND (the Foundation for Rural Integrated Enterprises & Development) is creating demand for farmers’ produce and poultry with a farm-to-table supply chain initiative. And through the Women’s Weather Watch on a women’s radio station, networks of women around Fiji relay texts to alert communities about storms, rainfall and flooding, and to carry their local reports back to the capital.

“I’m a leader, and leaders have to stand up for their community,” Unaisi Bakewa, a mother of seven who sells vegetables at the Tavua market, told ImpactAlpha contributor Sonia Narang. “We really have to alert women what’s going on in our area.”

Read ImpactAlpha’s “With women on the front lines of climate change, Fiji rallies reinforcements in Bonn,” by Sonia Narang in Tavua, Fiji:

With women on the front lines of climate change, Fiji rallies reinforcements in Bonn

#Extra: Trump’s man in Bonn shows the White House’s climate cards. The official U.S. delegation had been in stealth mode throughout the global climate conference known as COP23, shutting reporters — and most everyone else — out of its office and keeping its calendar remarkably empty. So it was surprising how open President Trump’s man in Bonn was when a group of reporters ambushed him while he was getting coffee at the venue’s cafeteria. Read an impromptu Q&A with George David Banks on coal, science and that tweet about the Chinese hoax, by Lou Del Bello on ImpactAlpha:

Trump’s man in Bonn shows the White House’s climate cards

#Dealflow: Follow the Money

Enterprise Community Loan Fund finances Denver solar project. Enterprise, the huge nonprofit lender, is investing $2.5 million in a solar installation that will power 500 homes in the Denver Housing Authority’s portfolio. The two-megawatt plant will be the first community solar installation owned by a public housing authority in the U.S. The facility in Aurora, Colo. will cost an estimated $3.9 million to develop and is slated to come online next February. The power generated will be distributed to Denver Housing Authority properties by Xcel Energy. Enterprise’s Lori Chatman told ImpactAlpha she hopes the project will spur similar initiatives with other housing authorities. Enterprise made the 15-year loan through its Impact Note program, which allows investors to commit as little as $5,000. Enterprise has raised $60 million through the note since it launched in 2010.

SVX launches online impact investment platform. SVX launched in 2013 to help social startups get investment-ready. It has worked with 149 ventures and supported fundraising of C$100 million ($78 million). Now, the Toronto-based company is looking to help Canadian social enterprises and financial institutions connect with investors with the first impact investment match-making service in Canada (similar to platforms such as ImpactUs and IIX’sImpact Partner Platform). A dozen issuers have registered for the platform, including First Nations Bank of Canada, which is raising C$7 million for loans to indigenous-owned businesses and individuals. The Immigrant Access Fund is raising capital to help new immigrant arrivals retrain for jobs and careers in Canada. Several issuers on the SVX platform may be familiar to ImpactAlpha readers, including CoPower, Lucky Iron Fish and Sarona Asset Management.

Fair by Design fund aims to reduce the U.K.’s “poverty premium.” More than 20% of the U.K.’s population lives at or below the poverty line. Low-income people often pay more for basic goods and services than wealthier households, because they rely on higher-cost pay-as-you-go utilities and financial products. The new Fair By Design Fund, backed by the Joseph Rowntree Foundation, Big Society Capital, Nominet Trust, Ascension Ventures, and Finance Birmingham is looking to invest £20 million ($26.3 million) in companies that are reducing this “poverty premium” with new energy and financial services. The fund, which has raised £9 million so far, has selected five ventures for seed or Series A investments, including JobSkila, a search tool that connects the unemployed to free skills training programs, and Bean, a spending tracking and money management service.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#Signals: Ahead of the Curve

Designing a global financial system fit for (sustainable) purpose. Anti-globalists could have a field day with the new “Roadmap for a Sustainable Financial System” from the World Bank and UN Environment. The bankers and bureaucrats are aiming at nothing less than a makeover of the global financial system, sustainably. Undercutting criticism of the heavy hand of global government, however, is the extent to which capital markets themselves have led the global rotation of capital toward social and environmental value. The audacious goal: a financial system that integrates sustainability into decision-making, fully accounts for both positive and negative externalities, and allocates resources toward inclusive and sustainable initiatives. “Mainstreaming the alignment of the global financial system with sustainable development has to move beyond marginal innovations and shape the system’s underlying architecture,” says Simon Zadek, who co-directed the “inquiry” into the new financial architecture under the UN Environment Program. The roadmap, the third in a series of reports, was introduced at the COP23 climate conference in Bonn. Keep reading ImpactAlpha’s full post on the redesign roadmap, by Jérôme Tagger:

Designing a global financial system fit for (sustainable) purpose

Pro-poor climate insurance aims to close the global protection gap. The year 2017 is on track to set a record for losses from natural disasters, many of them climate-related. Much of that damage is not insured, creating a “global protection gap,” that is rapidly widening, “especially for the poor and vulnerable countries,” says Peter Hoeppe, the chairman of the Munich Climate Insurance Initiative. New financial mechanisms that aim to bridge that gap were on display at the COP23 climate talks in Bonn. The Munich project’s Livelihood Protection Policy is a weather-index based insurance product that targets vulnerable low-income communities. It pays out to policyholders when they are hit by hurricanes and tropical storms. InsuRelience aims to insure an additional 400 million poor and vulnerable people in developing countries against the effects of climate change by 2020 (in 2015, only 100 million were insured against climate risk). The $550 million G7 initiative is part of a wave of financial innovations intended to catalyze capital towards climate solutions and other Sustainable Development Goals (see, “Here come the SDG Unicorns). The trick, we wrote in ImpactAlpha in July, “is to wrap sometimes-complex underlying projects in the kind of standardized, easy-to-execute and low-cost solutions that the capital markets want.” The UNFCCC has set up a clearinghouse of information on insurance and risk-transfer.

#2030: Long-Termism

Avoid, shift and improve to sidestep the great traffic pileup of 2050. The urban areas mid-century will be full of traffic, and more than $1 trillion in opportunities for smart-transportation investments. With an estimated 2.5 billion more people in urban areas, demand for urban mobility will be 95 percent higher than it was in 2015. Global road freight is expected to more than double, especially in China and India. Transport already contributes about one-quarter of all energy-related carbon emission. Business-as-usual would mean transport-related CO2 emissions could more than double to 16–18 gigatons by 2050.

New thinking around urban design, infrastructure investment, energy-efficiency technology, and business models are needed to avoid disaster, according to Creating Markets for Climate Business from the International Finance Corp. In the next decade, the report says, total investment in road, rail, port, and airport infrastructure will total $8 trillion in the Asia-Pacific region alone, growing from $557 billion in 2014 to $900 billion by 2025. Electric vehicles, already a $163 billion market, are growing by 40% per year, and the price of lithium batteries continues to drop. Volvo has set a goal of building only electric and hybrid vehicles within two years. Shared mobility and self-driving vehicles are also potentially disruptive investment markets, expected to reach $250 billion by 2050.

The report’s three-step approach to climate-smart urban transport: AVOID (reduce or avoid the need for travel); SHIFT (to more environmentally friendly modes); and IMPROVE (vehicle efficiency and technology). To this end, the global transport sector announced at COP 23 that they were launching a newTransport Decarbonisation Alliance (TDA) to push for further, faster climate action and to stimulate greater political leadership. The Paris Process on Mobility and Climate suggests investments in low-carbon transport infrastructure and services offer great value for money and can bring substantial economy-wide benefits and improve social equity. Public-private partnerships can unlock commercial finance and expertise, especially for bus rapid transit systems (BRTs) and light rail systems.

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