ImpactAlpha’s Sherrell Dorsey is on the ground at the DNC in Chicago. The big question: What are the climate and impact investors and entrepreneurs saying about the opportunities ahead? We’ll be updating this post with Sherrell’s dispatches and other stories.
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Climate action has gone underground at the Democratic National Convention. Core economic issues have so-far squeezed out climate on stage at the Democratic National Convention. At side events and private gatherings, climate investors and entrepreneurs are buzzing, reports Dorsey.
Family offices gathered Wednesday in a private conference room above a booth organized by mHub, a Chicago-based incubator for manufacturing and technology startups, to discuss impact investing strategies – what Dorsey called “underground tech planning meetings.” Similar gatherings were taking place in New York and San Francisco.
Dorsey hears “a major climate tech association” involving family offices interested in impact investing is in the works, with the aim of better connecting organizations and offices to climate tech opportunities. We’ll share more details as we learn more.
Battery tech has gotten a major boost under the Biden-Harris administration’s historic Inflation Reduction Act to finance America’s green transition. Now it’s bringing cost issues for clean-technology manufacturers to the fore.
Spencer Gore, the CEO of Bedrock Materials, a Chicago-based startup developing materials and manufacturing technology for low-cost sodium-ion batteries, told ImpactAlpha that sodium ion is “a better technology than lithium ion” for electric and hybrid vehicle batteries, in large part because it’s cheaper.
“Until recently, there was never really a reason to consider sodium, because most EVs on the market were premium products” costing roughly $75,000,” Gore said. “They were being sold at high price points for rich people, and automakers weren’t yet worried about profitability.”
Today, “automakers are less concerned about making a 500 mile EV” and “much more concerned about making a profitable one.”
But the price advantage of sodium ion batteries comes at a cost. They only hold about 75% as much energy as their lithium ion counterparts, what Gore called “a slight energy density penalty.” As such, they “have to take up more space in the car, and a little bit more weight in the car, to do the same job,” he said.
Still, he said, the benefit outweighs the cost: “There is no place that you can pull thousands of dollars of cost out of the car in one fell swoop like changing the battery chemistry,” making sodium ion batteries “the single most attractive cost production opportunity.”
- Short video of Dorsey’s interview with Bedrock Material’s Spencer Gore at the DNC.
Tech continues to come out for Kamala. “It’s on us to make the world a bit fairer — to expand opportunity for those who don’t have it, whether that’s in tech or policy,” Amazon’s Charlotte Newman, who works to accelerate underrepresented founders and investors, said at the Tech4Kamala confab, which drew more than 400 RSVPs (see Dorsey’s video). Shila Nieves Burney of Zane Venture Fund in Atlanta added that when prominent venture capitalists Marc Andreessen and Ben Horowitz came out in support of former President Donald Trump’s candidacy, it “left a chill to a lot of us who are in the VC community who care about underrepresented founders and believe our democracy is at stake.” The two VCs represent around $42 billion in assets. By contrast, “the folks that back VCs for Kamala are about $400 billion – that matters.” Added Burney, “I love competition.” (see, “VCs embrace Kamala Harris’s vision for an economy that works for all.”)
NEW STORY: Pension funds in pro-ESG ‘blue’ states outperform those in anti-ESG ‘red’ ones — to the tune of $159 billion
Financially material environmental, social and governance factors play a major role in investment decisions at many public pension funds — except for those in states that have joined the conservative-led backlash against consideration of ESG risks. A study of more than 200 US pension funds found that those in pro-ESG “blue” states tend to outperform their peers in Republican-controlled “red” states that disparage so-called “woke investing.” Funds in Democrat-led states, which allow and sometimes require the use of ESG criteria when selecting investments, returned an average 9.1% a year over more than a decade through 2022, according to a new report, shared exclusively with ImpactAlpha, by HIP Investor, an impact investment advisory firm in Laguna Beach, Calif.
By contrast, the average yearly return by public pension funds in Republican-led states over the same period was a lower 8.8%. “The self proclaimed ‘party of business’ — Republicans — can’t seem to systematically achieve higher pension returns for state pensions,” HIP’s R. Paul Herman told ImpactAlpha. “The GOP sounds off regularly as a defender of free markets, yet pursues anti-ESG laws and proclamations that appear to correlate with lagging pension returns.”
- Keep reading, “Pension funds in pro-ESG ‘blue’ states outperform anti-ESG ‘red’ ones – to the tune of $159 billion,” by Lynnley Browning on ImpactAlpha.
“Democracy is fragile but also requires participation,” Deval Patrick, the former Massachusetts governor and advisor to The Vistria Group, told a Business and Democracy Initiative panel. “Business leaders have to get off the sidelines.” Added Arizona Secretary of State Adrian Fontes, “Business doesn’t exist without democracy.”
“Never before has it been less expensive for regular, everyday people to invest in clean energy for their own homes or for businesses or for school districts,” former Wisconsin Lt. Gov. Mandela Barnes told ImpactAlpha.
Plugged In: Live from Chicago. Dorsey hosted a conversation with Meredith Shields, head of the $500 million Citi Impact Fund, and shared an update from the DNC. “Ensuring that people have access to resources, and innovation to ensure that access, really is the theme here in Chicago.” Watch the replay.
NEW STORY: Beyond Chicago, Harris seeks to ride a revival in wages, entrepreneurship and ownership
On her way to the Democratic National Convention in Chicago, Vice President Kamala Harris stopped in Moon Township, Pa., to talk, among other things, about her plan to expand the child tax credit for newborns and revive the expanded benefit available during the Covid-19 pandemic. How would she pay for the $6,000 credit, a reporter asked. Pandemic-era expanded child tax credits, since discontinued, helped cut child poverty rates by half. “The return on that investment, in terms of what that will do and what it will pay for, will be tremendous,” Harris said.
She uses the same language of business to talk about other social priorities. Homeownership, for example, increases the tax base to provide vital funding for schools. Her focus on measurement and returns may have resonance for impact investors, many of whom are investing behind the same themes.
“It’s a mistake for any person who talks about public policy to not critically evaluate how you measure the return on investment when you are strengthening neighborhoods, strengthening communities, and investing in a broad-based economy,” she said. “Everybody benefits, and it pays for itself in that way.”
- Keep reading, “Beyond Chicago, Harris seeks to ride a revival in wages, entrepreneurship and ownership,” by David Bank, Amy Cortese, Dennis Price, Roodgally Senatus, Lynnley Browning and Sherrell Dorsey.