The Brief | April 26, 2018

Materiality in the Trump era, financial advisor gateway, new fund for women’s financial inclusion

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Greetings, ImpactAlpha readers!

Featured: The Impact Alpha

Prudence, materiality and impact in the Trump era. It would be easy to see new guidance provided to pension fund investment managers this week by the U.S. Department of Labor as just the latest swing of the political pendulum. As per consideration of environmental, social and governance, or ESG, factors in investment decisions, the Clinton administration was pro-, Bush was anti-, Obama was pro- and now Trump is…

But wait. The Labor Department’s bulletin may have queued up exactly the right question: Is the ESG performance of a company or a fund in fact “material”? The answer is important. If ESG factors do matter to long-term financial performance, it follows that prudent fiduciaries are not just allowed to, but duty-bound to consider them in investment decisions.

Keep reading David Bank’s new column, “The Impact Alpha: Prudence, materiality and impact in the Trump era.”

Agents of Impact: Follow the Talent

Jonny Price is moving up what he calls the “crowdfunding ladder.” Price led Kiva’s U.S. team and has joined equity-crowdfunding platform WeFunder as director of business development… Ben Carpenter has been named chief executive officer of social-impact accounting firm Social Value UK… New Ventures Mexico and BBVA Bancomer are recruiting 100 social and environmental entrepreneurs in Mexico to be part of latest cohort of their BBVA Momentum accelerator (applications due May 7th).

Signals: Ahead of the Curve

Opening the financial advisor gateway to impact and sustainable investing. “If you’re a financial advisor and you’re not offering impact, you’re behind the curve and soon you’ll be obsolete,” Just Capital’s Martin Whittaker said this morning at the Total Impact conference in Philadelphia. Seven in 10 investor clients have requested impact opportunities from their advisors, according to a recent survey; only one in five financial advisors thinks it’s important. That makes financial intermediaries, registered investment advisors and institutional investment consultants a crucial “gateway” for mainstreaming impact and sustainable investing.

  • Seizing the opportunity… The Good Capital Project has built a conference series to provide an on-ramp into impact investing for financial advisors. Total Impact kicked off today in Philadelphia. Next up: Boston in October.
  • Developing a practice… US SIF Foundation, the education arm of the Forum for Sustainable and Responsible Investment, has a step-by-step primer to help financial advisors jumpstart and deepen their impact and sustainable investing practice.
  • Home is where the heart is… Financial advisors can offer an array ofcommunity and place-based investment products that allow first-time impact investors to deploy capital in the places they care about. The options range from S&P-rated community development bonds to small-business loan funds and affordable-housing real-estate investment trusts.

Dealflow: Follow the Money

Women’s World Banking plans new, larger fund for women’s financial inclusion. The non-profit is laying the groundwork for a new microfinance-focused private-equity fund to support financial inclusion among low-income women. Learn more.

Techtonic Group raises $2 million to teach software skills and diversify tech. The company’s apprenticeship program pairs people looking for work with tech firms to learn software skills on the job. Get the details.

Enuma secures $4 million to fill early learning gaps. Enuma makes educational games for special needs students and others who face barriers to education. Read on.

Swedish pension fund adds $100 million to Dutch SDG-loan fund. After committing $100 million to the NN-FMO Emerging Markets Loans Fund last year, Sweden’s Alecta committed another $100 million to bring the fund’s first close to $250 million. Go deeper.