Greetings, ImpactAlpha readers!
#Featured: Impact Voices
Telling the impact investing story. In the spirit of full transparency, we should disclose that ImpactAlpha receives a fair number of pitches from professional public-relations firms. Sometimes derided (particularly by reporters) as “flacks,” PR has rebranded itself as “strategic communications.” And as such, they often have smart ideas about how to tell their clients’ stories. Aspectus, a global PR agency, has made a specialty of impact investing, with clients including Global Impact Investing Network, Big Path Capital and ImpactUs.
The firm’s “commandments” include: “Show impact through personal narratives”; “Get past the alphabet soup”; and “Embrace the skeptic.” On the last, Jed Hamiton, Aspectus’ North American managing director, writes on ImpactAlpha, “Learn to engage with the critics, invite them to look closer and be there to answer their questions.” We agree, and thought impact investing practitioners might be interested in some free communications advice. Here’s to better pitches.
Read, “Four steps to impact investing storytelling” by Aspectus’ Jed Hamilton on ImpactAlpha:
#Dealflow: Follow the Money
Community Capital Management to direct funds to hurricane recovery. After relief efforts for the victims of Hurricanes Harvey, Irma and Maria comes the rebuilding. Florida, Texas, Puerto Rico and other disaster areas will need tens of billions of investment dollars for reconstruction. To help finance recovery projects, Community Capital Management’s CRA Qualified Investment Fund will direct institutional, bank and retail investments to specific regions. Bigger investors can focus on up to 17 impact themes, including disaster recovery. Capital is then invested in various impact bonds. After Hurricane Sandy, CCM helped finance Harlem River Point North, an affordable rental property that gave preference for a quarter of its 173 units to those displaced by the storm. CCM, based in Fort Lauderdale, Fla., manages $2.4 billion in assets.
Indigo raises $156 million for drought-resistant seeds. Boston-based Indigo, which taps plant microbiomes to improve crop resiliency and water efficiency, has developed cotton and wheat seeds for U.S. farmers facing increased water scarcity. Corn and soy products are in the pipeline. The new investment round will help support recently opened offices in Australia and Argentina and increases total fundraising to $300 million, giving the company a reported value of $1.4 billion.
Big Society Capital backs UK housing innovation competition. U.K. National Housing Federation, a nonprofit that advocates for better neighborhood housing, is looking for new ideas for how low-cost public and private housing associations can better respond to community challenges. The competition is backed with £15 million ($20 million) from Big Society Capital. Other impact investors are supporting efforts to improve the U.K.’s low-income housing associations, where residents face higher-than-average rates of unemployment and physical and emotional problems. Bridges Fund Management recently took a majority stake in facility-management company Just Ask.
#Signals: Ahead of the Curve
The (unequal) footprint of community-development finance. Community-development finance institutions (CDFI) are convening this week at the Opportunity Finance Network Conference in the U.S capital. Ahead of the conference, the Urban Institute, a D.C. think tank, released findings from a comprehensive analysis of capital deployed by the industry. The institutions — lenders required to make at least 60 percent of their loans available to low- and moderate-income neighborhoods — lent more than $34.3 billion between 2011 and 2015, roughly $6.8 billion a year. Nearly two-thirds went to communities with at least one indicator of economic distress, such as unemployment rates of at least 10 percent. But the funding isn’t equally distributed. Half of U.S. counties saw CDFI lending of less $7 a year per eligible low-income borrower, while 10 percent received $114 per eligible borrower in loans. The CDFI industry has grown dramatically since 1994 when the U.S. Treasury created the CDFI Fund to encourage banks, credit unions, loan funds and venture capital providers to invest in communities that others found too risky. More than 1,000 institutions with $136 billion in assets serve borrowers in all 50 states, Washington, D.C., Puerto Rico and Guam. Oscar Perry Abello has a smart “state of the CDFI industry” piece over at NextCity.
How wealthy families can harness impact investing. Wealthy families have the assets, the nimble operations and a growing inclination to shift billions to impact. A U.S. Trust survey last year found that already one in four high net worth individuals own impact investments, up threefold from the year before. Family Wealth Report, a news and analysis source for the family office and wealth management community, wants to help multi-generational families and their advisors make sense of the growing industry. The firm will host the Family Wealth Report Impact Summit, a one-day event in New York in October, to explore questions such as “Where should impact sit amid broader strategy discussions?”, “What are the key elements in the impact ‘toolbox’?” and “How do I as an advisor deliver the right insight and expertise?” ImpactAlpha is excited to be a media sponsor for the FWR Impact Summit on Oct. 11 in New York. Register here. (Attendance is complimentary for qualifying guests at family offices, businesses and foundations, HNW investors, and their advisors.)
Beating the killer heat. Mega-storms like Harvey and Maria capture the headlines. But the real killer weather comes from another quarter: Deadly heat waves. According to the U.S. National Weather Service, heat-related causes killed more people over the past 30 years than other weather phenomenon. And those numbers might be low — death by heat is likely underestimatedbecause “many deaths during heat waves are attributed to other causes,” says Gulrez Shah Azhar, an assistant policy researcher for the RAND Corp. Heat-related deaths are expected to rise as more people move to heat-trapping cities; two-thirds of humanity is expected to live in urban areas by 2050.
The poor, elderly and infirm are the most likely to die from extreme heat, especially in the U.S.; during Chicago’s three-day heatwave in 1995, many of the 730 who died were older people living alone. Elsewhere, women die from extreme heat far more often than men. A new report by the Thomson Reuters Foundation says that in India, preparing household meals means a choice for women between cooking inside, turning one-room homes into ovens, or cooking outside, where they risk heat stroke. Women there can also be at greater risk of dehydration; many avoid drinking ample amounts of water to limit trips to outdoor toilets, where they risk harassment or even rape and murder.
Climate change is expected to make the problem worse. A recent study of temperatures in India between 1960 and 2009 found that a rise of less than one degree Fahrenheit significantly increased the number of heat waves and the probability of heat-related deaths. A heat wave in 2015, when temperatures reached 118 degrees Fahrenheit, left more than 2,330 Indians dead.
How to respond? Getting people to stay indoors and hydrated during heatwaves is critical, says Azhar. Humid Bhubaneswar, in eastern India, has since last summer doubled the number of roadside water kiosks. Ahmedabad, a city of 5.5 million, initiated a weather forecast-based early warning system of impending heat waves and worked to ensure that there were ample supplies of ice packs, water coolers, and medicines to bring relief from the heat.
Onward! Please send any news and comments to TheBrief@impactalpha.com.