Greetings, ImpactAlpha readers!
#Featured: Open Mic
Bridging the homeownership divide. Pick your statistic: racial wealth disparities in the U.S. are colossal and — moral implications aside — toxic for our economy. Inclusive home ownership is the single biggest lever for overcoming the disparities. Self-Help Credit Union, the Durham, North Carolina-based community lender, has helped more than 50,000 low-income residents in 48 states, most of them people of color, become successful homeowners. With early and strategic philanthropic support and inclusive underwriting practices, Self-Help’s secondary financing has leveraged over $4.5 billion in mortgage financing.
We need to tell more such success stories, and to call out the roles of investors and philanthropists, says Ben Hecht, CEO of Living Cities, who does just that in a guest post on ImpactAlpha. “Across the country, there are programs that are already working to expand access to safe, affordable loans,” Hecht writes. “We’re equipped with everything we need to move the needle: a clear understanding of the problem, a powerful, a data-driven intervention point, and a number of reliable blueprints for designing solutions that work. All that’s missing is the urgency and commitment to scale up.”
Keep reading about promising solutions in “Bridging the homeownership divide” by Ben Hecht on ImpactAlpha:
#Sponsored: Content by Wetherby Asset Management
The growing impact of engaged shareholders. Shareholders of both ExxonMobil and Occidental Petroleum sent a loud message to corporate management recently: climate risks are real. With large majorities bucking management to approve the climate-risk resolutions, shareholder engagement moved from symbolic protest to active oversight. As more individuals look to exercise their shareholder voice, financial advisors can play an essential role. Together with As You Sow and Aperio Group, Wetherby has developed a simple and systematic approach that connects clients to important social and environmental shareholder resolutions. This year, Wetherby clients authorized As You Sow to file and co-file 20 shareholder resolutions with 16 companies targeting issue areas such as carbon asset and climate change risks, genetically modified organisms, pharmaceutical waste and consumer packaging. You can help expand the shareholder engagement movement: Vote to support Wetherby’s panel with As You Sow, “Amplifying Impact Through Shareholder Engagement,” at the SOCAP conference Oct. 10–13. Vote today — voting ends June 29!
#Dealflow: Follow the Money
LeapFrog takes equity stake in credit-scoring firm Cignifi. Over 90% of people in low- and middle-income countries lack formal credit histories. But more than two billion have mobile phones. Cignifi, launched in Cambridge, Mass. in 2010, scores credit based on non-financial mobile data to help unbanked customers secure loans. Cignifi has served 100 million people in 13 countries, including Mexico, Ghana, and Brazil, and is aiming to reach a billion people. The undisclosed investment from LeapFrog will enable it to expand into insurance and otheir ther financial markets. Cignifi has raised at least $7 million in equity funding rounds, backed by Omidyar Network, which also participated in this round.
Cardiotrack to invest in Mexican operations and training, amid expansion. Cardiovascular disease is the leading cause of death worldwide; 75% of heart-disease related deaths are in low- and middle-income countries. Most diagnostic tools are designed for large, urban hospitals. “They are often too expensive and require a significant amount of training. That makes them unsuitable for primary care physicians,” particularly in non-urban areas,” Cardiotrack’s Avin Agrawal said in an interview. The Singapore- and Bangalore-based healthcare diagnostics company developed a low-cost electrocardiogram that pairs with predictive software to detect heart conditions and disease. The tool was launched in 2014 for under-resourced public health centers in India, and has also launched via partners in Mexico and France. The Mexican state of Nuevo León has signed an agreement with Cardiotrack to establish a local base of operations in the capital, Monterrey, and open a training unit that will create 200 local jobs.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
Demand for impact investments generates a growing supply — of ‘intermediaries.’ Impact wealth managers, impact investment advisors and managers, investment consultants, management consultants, financial advisors, family offices — an army of service providers is responding to growing client demand for impact investing advice (see, “Smoothing the flow of impact investing with lane markers and turn signals”). Toniic, the impact investor network, surveyed 37 providers to get the lay of the often overlooked land between asset owners and investees. All those surveyed for “Insights from impact advisors & consultants 2017” expect their business to grow this year, and one-third see a “significant increase.” Mary Foust of Merrill Lynch predicts “the industry will have more cost-effective tools to allow for clients to design an impact portfolio for their exact desires.” William Tickle of Ballentine Partners, said “the sector will continue to grow and attract more top talent.” Amit Bouri of the Global Impact Investing Network offered a six-point checklist for choosing an advisor. It’s important, he says, “to identify advisors with real experience and understanding of what impact investing is, versus those who just claim experience and understanding.”
Tackling building challenges of equity and emissions. Building design will play a big role in the world’s ability to meet the Paris climate agreement’s goal of limiting temperature rise to less than two degrees Celsius. Worldwide, buildings account for 6% of greenhouse gas emissions. In the U.S., buildings are responsible for a whopping 39% of total CO2 emissions and just as much energy consumption. Cities with large real estate footprints have been actively pursuing policy to get that figure down. Last year, New York’s real estate sector cut emissions by 8% as part of the “OneNYC” commitment to reduce emissions by 80 percent of 2005 levels by 2050.
But cutting carbon emissions is only the beginning of sustainability in real estate. Better building design should factor in human and social issues too. There needs to be more attention paid to building “net positive equity” real estate, not just net positive energy, water and waste, says Jennifer Hirsch of Georgia Tech. The university’s Living Building Challenge seeks to “lead and support the transformation toward communities that are socially just, culturally rich and ecologically restorative.” The Challenge, which launched three years ago, is a building certification program that focuses on seven components of the built environment: place, water, energy, health and happiness, materials, equity, and beauty.
The university is partnering with the of Atlanta-based family foundation Kendeda Fund to build a new campus center that meets its own strict standards. Among the “equity” requirements it must meet are avoidance of “red list” chemicals that can potentially harm both the environment and the workers using them; walkability, to promote healthy lifestyles; public access; and charitable contribution.
“You can’t overlook the fact that how you design a building affects not just the health of the people who occupy it, but also the health of the people who manufacture the products in the building or who mine the materials,” argues Kandeda Fund’s Dennis Creech. “You can’t overlook how it affects people’s jobs and their opportunities.”
Onward! Please send any news and comments to TheBrief@impactalpha.com.