October 23, 2023 |

Associate General Counsel – Real Estate and Impact Investing

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December 4, 2023

The Brief

Featured: COP Watch

The antitrust theories are weak, but the effects can be chilling on corporate collaboration for climate action. The Glasgow Financial Alliance for Net Zero, or GFANZ, launched with fanfare at COP26 by Brookfield Asset Management’s Mark Carney and Bloomberg’s Michael Bloomberg, aimed to align banks, asset managers and financial institutions with a combined $130 trillion in assets under management with the goal of keeping global warming below 1.5 degrees Celsius. Two years later, as COP28 gets underway in Dubai, many of those financial institutions have dropped out, gone quiet and otherwise gotten cold feet. Behind the chill: a coordinated attack by Republican politicians in the US on efforts to fight climate change. In recent letters and subpoenas, the Republican-led House Judiciary Committee charged that financial industry alliances like GFANZ “appear to facilitate collusion that may violate U.S. antitrust law,” and represent “ESG cartels” (see, “With subpoenas, Rep. Jim Jordan seeks to chill shareholder action on climate”). The antitrust claims have little legal basis and “should be evaluated in the context of the deep anti-climate interests of the campaign’s funders,” argue Cynthia Hanawalt of the Sabin Center for Climate Change Law and Denise Hearn of the Columbia Center on Sustainable Investment. Their guest post on ImpactAlpha breaks down the legal issues.

Dealflow: Pay for Performance

Investors earn a return on a ‘forest resilience bond’ in California. Nonprofit Blue Forest partnered with World Resources Institute, the US Forest Service, and the National Forest Foundation five years ago to pilot a financing mechanism for proven techniques to protect forests from devastating wildfires and other climate risks. The “forest resilience bond” raised $4 million from investors to restore and protect 15,000 acres in the Yuba watershed in the Tahoe National Forest. Blue Forest says the intervention, completed more than five years ahead of schedule, provided an “adequate” return to investors “in line with expectations.” Investors were repaid by the Yuba Water Agency, the US Forest Service, and California’s Climate Investment Program. The project “exemplifies how investments in nature can successfully accelerate solutions, benefit public lands and return capital,” Blue Forest said in a statement.

Impact Voices: Emerging Fund Managers

Funds of funds provide more than capital for local investors in small and growing businesses. Impact funds that invest in other aligned funds are common in private equity and microfinance. Funds of funds are now emerging in the global small business finance sector as a means of mobilizing the roughly $5 trillion a year needed by small and growing businesses, writes Susan de Witt of the Collaborative for Frontier Finance, which hosted annual gathering of small business-focused fund managers and investors last week in Cape Town. Funds of funds like the Dutch Good Growth Fund, Mastercard Foundation’s Africa Growth Fund and Kuramo Capital are proving to be a critical early supply of capital for fund managers in Africa and the Middle East, according to a new survey from CFF. “All employ a range of strategies to evaluate local fund managers’ risk,” such as creative risk assessments, anchor capital and back-office services, de Witt says. Such support, she adds, is “helping fund managers transition from raising from angel and high-net worth investors, family offices and foundations to institutional investors.”

Agents of Impact: Follow the Talent

Cornelius Lee, ex- of Promise54, joins Equitable Facilities Fund as vice president of talent… Overdeck Family Foundation appoints Katelyn Fletcher, ex- of the Brookings Institution, as portfolio associate… Impact Capital Managers seeks a talent and diversity director in New York… Also in New York, Blue Meridian Partners seeks two directors… Pollination has an opening for a nature and agriculture executive director in Washington, DC.

Read today's brief