GIIN investor forum, tallying U.S. sustainable investing assets, pathways to work, Ethos’s raise, Capitalism 2.0



Greetings, ImpactAlpha readers!

Event: GIIN Investor Forum

Dateline Paris. System-change is in the air as impact investors press to move beyond deals and funds to the reform of finance itself. The Global Impact Investing Network brought together 1,400 people from 80 countries to plot and plan. “Our financial system is not working. It’s not serving the planet. It’s not serving the people. And it’s not serving investors,” said the GIIN’s Amit Bouri to kick off the forum. “We need to fuel a global impact investing movement. System-change will only come if society demands it. We need to change mindsets about the role of capital in society.” Among the ideas: “By 2020, we are aiming for companies to publish, alongside financial accounts, their impact financial accounts,” said British venture capitalist Sir Ronald Cohen. Change, said Triodos’ Marilou van Golstein Brouwers, “will be driven by individuals asking their bank and their pension fund how they are using their money.” Warned Rockefeller Foundation’s Saadia Madsbjerg: “Let’s not let impact investing be this nice little thing that makes us feel good while we do devastating things with the rest of our portfolios.”

In a series of video interviews, ImpactAlpha asked impact investors: Where’s the growth? MacArthur Foundation’s Debra Schwartz spotlighted place-based investing and the deployment of donor-advised funds, which have played a big role in the MacArthur-backed Benefit Chicago. Courtland Walker of Developing World Markets sees growth in water, sanitation and women’s economic empowerment in emerging and frontier markets. Added Neil Duren of Gramercy Hill Partners: emerging markets in the U.S. “Let’s repatriate an industry to the United States. Let’s bring jobs to an area that needs employment,” he said. “These are the same strategies we would use in Ukraine.” (Disclosure: Gramercy Hill, along with the Rise Fund, sponsored ImpactAlpha’s dinner and reception at the GIIN forum.)

Signals: Ahead of the Curve

The new tally of “sustainable” assets in the U.S.: $12 trillion. The 38% increase from two years ago means a quarter of the $46 trillion in total U.S. assets under management now take into account environmental, social or governance, or ESG, factors, either when selecting investments or through shareholder resolutions. Yet very little of that total is in proactive impact investments. Institutional investors and money managers identified just $84 billion in impact investments in the biennial tally from the U.S. Forum for Sustainable and Responsible Investment or US SIF. The survey includes ESG assets held by 496 institutional investors, 365 money managers and 1,145 community financial institutions, along with 219 institutional investors or money managers that filed or co-filed shareholder resolution. Community investment assets, driven by credit unions, grew 50% to $185 billion. Some highlights:

  • Climate change. $3 trillion in managed assets are now assessed against climate change criteria, more than double the amount in 2016.
  • Weapons. Concern for civilian firearms drove a five-fold spike in assets screened for weapons to $1.9 trillion.
  • Fossil fuel divestment. $680 billion in assets are now governed by fossil-fuel divestment policies, up 372% over 2016.
  • Shareholder engagement. 165 institutional investors and 54 investment managers with a collective $1.8 trillion in assets filed or co-filed shareholder resolutions since 2016. Just 18 proposals on social and environmental issues received majority support during that time (up from three between 2012 and 2015).
  • Global Goals. The Sustainable Development Goals are one of the motivations for pursuing sustainable investment strategies for 56 money managers representing $2.15 trillion in assets.
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Dealflow: Follow the Money

Salesforce Ventures, Lumina Foundation and Robin Hood partner for workforce development. Each organization is putting up $5 million to back companies supporting adults with job retraining, equitable compensation, and inclusive work environments. The partnership will invest in companies helping adults complete high school, learn math and science skills, and access higher education. The initiative is the first impact investment for non-profit Robin Hood; Salesforce’s commitment is part of its $50 million impact fund. Indianapolis-based Lumina has a large portfolio of edtech and workforce-based impact investments. Learn more.

Jay Z-backed Ethos raises $35 million to simplify access to life insurance. The San Francisco insurance-tech company offers term-life policies, which can be approved online in as little as 10 minutes. Ethos raised its Series B financing led by venture capital firm Accel. Prior investors, including Jay Z’s venture capital firm Arrive, GV (previously Google Venture), and Sequoia Capital, also backed the round. Ethos also raised an undisclosed amount of debt capital from Silicon Valley Bank. Read on.

Southern New Hampshire University and LRNG merge to support pathways to work. The private online university and the education non-profit together support about 180,000 learners. Southern New Hampshire caters to traditional college students and adult learners; LRNG offers digital “badges” for online courses that help learners land job interviews with partner companies or get settled into new jobs. The organizations are establishing city campuses, starting in Birmingham, AL. Dive in.

Featured: Impact Voices

Capitalism 2.0 will put impact at the center of public and private market decisions. Social impact must shift from a fringe consideration to the center of business, government and investment decisions, writes Amit Bhatia in a guest post on ImpactAlpha. Bhatia heads the Global Steering Group for Impact Investment, now comprised of 21 countries plus the European Union. Among his proposals to humanize capitalism: The drafting of an Impact Act to make reporting of impact mandatory for governments, businesses and investors. Bhatia says the impact community must popularize the movement. “We need to painstakingly connect the underserved to the big idea that we can have 100% of the economy work for the 99%.” Read, “Putting impact at the center of public and private market decisions,” by Amit Bhatia on ImpactAlpha.

Agents of Impact: Follow the Talent

Omidyar Network is hiring a chief operating officer… The Climate Finance Lab is looking for “ideas for financial instruments that can unlock investment for climate mitigation and adaptation projects in developing countries.”

October 31, 2018.

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