The Brief | September 18, 2018

Little Jed Book, climate investor one, UBS’ development impact bond, environmental finance and other blockchain game-changers

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Greetings, ImpactAlpha readers!

Featured: Impact Voices

The Little Jed Book: Digging into the ‘why’ of impact investing. Jed Emerson rocked the SOCAP conference last year, challenging impact investors to go beyond the ‘how’ of putting capital to work for social purpose and to dig into the ‘why.’ (“I actually begin to cry when speaking about the purpose of capital,” he says. “No doubt a first!”) Emerson, who pioneered many of the ideas that undergird impact investing, digs deep in his new book titled, natch, The Purpose of Capital. Five quick steps to purpose, the book is not. “Perhaps we need fewer experts with answers and more openness to the fundamental questions and genuinely profound challenges of our own experience,” Emerson writes. ImpactAlpha readers apparently agree: Emerson’s June discourse on “theory, practice and community” is one of our best-read posts.

This week, we’re pleased to provide a sampler (perhaps we should call it a flight) of The Purpose of Capital. “Capital is itself a social construct and not an objective, economic rule of law operating beyond our societal bounds,” Emerson writes in Chapter One. “Our approach to the nature and purpose of capital may be changed, expanded, refined, and applied in new ways not only in our own lives but within those of our families, communities, nations, and world.” With Emerson, we’ve selected a number of very short excerpts; we’ll add a new one each day to “The Little Jed Book.” Readers are invited to share your own favorites. “The quest to discern the real purpose of capital,” Emerson writes, is about “how we may work together to realize financial capital’s potential as a tool for attaining our broad goals of life and meaning.”

Dig into The Purpose of Capital by Jed Emerson with ImpactAlpha’s Little Jed Book, and check back each day this week for a new short excerpt.

Dealflow: Follow the Money

Climate Fund Managers invests $50 million in Singapore’s Cleantech Solar. The Dutch firm’s equity investment, from its $535 million Climate Investor One fund, will support Cleantech Solar’s expansion in Asia. Cleantech Solar has installed 120 large-scale rooftop solar systems, totalling 200-megawatts, in India, Cambodia, Malaysia, Thailand, the Philippines, Vietnam and Singapore. Climate Fund Managers is a partnership between Dutch development bank FMO and South Africa’s Sanlam Infraworks. Read on.

Egypt’s FreshSource raises seed funds to link farmers to markets. The Cairo-based agtech company aims to boost farmer incomes, cut unnecessary costs and reduce the environmental impact of Egyptian agriculture. The firm, which works with 50 vendors and more than a dozen farmers, secured seed funding from Egypt-focused venture investor HIMangel. Companies like Twiga in Kenya, Agruppa in Colombia, and Doodhwala and Waycool in India have developed similar models to support small farmers and improve food-chain efficiency. More.

UBS Optimus Foundation leads Indian education impact bond expansion. The Swiss bank’s philanthropic arm is fronting $3 million for a development impact bond, or DIB, to support education for 300,000 children in India. Dell Foundation and British Asian Trust are “outcome funders” and will repay UBS Optimus, with interest, if the program hits certain milestones (which have not been announced). The Quality Education India DIB follows the UBS Optimus Foundation successful girls’ education DIB in Rajasthan. What we know.

Signals: Ahead of the Curve

Environmental finance and other blockchain “game-changers.” A new report from the World Economic Forum touts the decentralized electronic ledger’s potential as a game-changer for sustainable development finance, among about a half-dozen or so other applications for environmental challenges. The report hypes blockchain’s potential to “unlock and monetize value that is currently embedded (but unrealized) in environmental systems.” Yet only about 3%, or about $100 million, of the $3.3 billion raised through initial coin offerings in the first quarter of 2008 went to energy and utility projects. ImpactAlpha reported in April that the deals lag the hype in “blockchain for good” investments.

  • Use cases. The WEF’s analysis of environmental challenges suggests blockchain use-cases include: more efficient and decentralized utility systems; peer-to-peer trading of resources or permits; “see-through” supply chains; new financing models for environmental outcomes; and the realization of social and environmental value and natural capital.

  • Planet finance. UK-based Provenance, backed by Humanity United, is piloting a blockchain tuna-tracing system from Indonesia sources to retail customers in the UK. The Sun Exchange’s blockchain-enabled marketplace facilitates low-cost and efficient cross-border funding for solar projects to solar assets in sub-Saharan Africa Malta-based Poseidon wants to tokenize carbon credits. The Natural Asset Exchange has a plan to connect producers of waste to energy, solar, and wind farm projects with consumers of such “natural capital” assets.

  • Blended finance. The mixing of concessional and commercial capital for sustainable development projects is a blockchain natural. “A platform could efficiently facilitate the complexity of such transactions where different types of funding, traditional and nontraditional assets, and multiple stakeholders with multiple requirements are involved.”

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Agents of Impact: Follow the Talent

Cutting Edge Capital attorneys Kim Arnone and Brian Beckon talk about community-driven revitalization Oct. 11 in a webinar, “Community Capital, Opportunity Funds, and Local Control”… The Center for Inclusive Growth is looking for a director of data philanthropy… Big Society Capital is hiring a policy and strategy manager and senior social impact director.

— September 18, 2018.