2030 Finance | February 1, 2018

Pension funds demand climate risk disclosure, a New Orleans revival, Mark Cuban’s student debt…

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#Featured: ImpactAlpha Original

No Excuses: Pension funds tell companies to account for, disclose, and reduce carbon risk. It’s been easy for some corporations to reach for reasons not to act on climate change, or at least not to tell anybody what they’re doing. Not anymore. The “Investor Agenda” presented at the biannual Climate Risk conference in New York includes specific mandates from the big asset owners that could become de facto requirements for the companies they invest in — which is, effectively, all companies. “It takes the ‘Buts’ off the table and sends a clear message.” Jack Ehnes, CEO of the $252 billion CalSTRS, told ImpactAlpha.

If accounting is destiny, reporting under the recommendations of the Task Force on Climate-Related Financial Disclosures will force a reckoning with the valuations of many companies. The new Agenda synthesizes the welter of reporting standards and initiatives so corporate executives know exactly what they have to do. The Agenda commits investors to increase their own low-carbon investment — but not by how much. CERES and six other organizations that developed the Agenda will report by September on which investors have taken action. “Things haven’t fallen flat in the two years since Paris,” Ehnes said in the interview. “Investors are moving forward and there are now opportunities for collaboration on a global basis.”

Read “Pension funds tell companies there are ‘No excuses’ for inaction on climate change,” by David Bank on ImpactAlpha. Check out all of ImpactAlpha’s coverage of 2030 Finance.

#Series: The New Revivalists

Propeller: Helping local entrepreneurs rise with New Orleans’ revival.More than a decade after Hurricane Katrina, new business starts in New Orleans have been outpacing national averages for years. Many local businesses, particularly those with founders of color, haven’t been part of the revival. Andrea Chan and the Propeller accelerator support local entrepreneurs to solve local problems in food, water, health and education, and “tries to build a critical mass of entrepreneurs who we can then connect to policy makers and business leaders in that sector,” according to marketing director Catherine Gans. Propeller has launched a new program to support black-owned businesses in the neighborhoods surrounding Propeller’s offices with loans of up to $100,000. All told, Propeller has supported close to 180 ventures and helped to create over 360 full and part-time jobs. Journalist Sherrell Dorsey, founder of ThePlug, dug into Propeller for ImpactAlpha.

Read “Propeller: Helping local entrepreneurs rise with New Orleans’ revival,” by Sherrell Dorsey on ImpactAlpha.

New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.

#Dealflow: Follow the Money

Lambda School raises $4 million for pay-as-you-earn coding school. The education company offers computer science and machine learning programs, and recently graduated its first class. Students can pay $20,000 up front, or begin repaying through an income sharing program once they graduate and get a job earning over $50,000. The income share lasts for two years, with a maximum repayment of $30,000. The seed funding was led by Y Combinator and Tandem Capital with money going to expand the number of students it can accept. “Our main mission is just giving access to people for higher education and to get really high paying jobs,” founder Austen Allred said in an interview.

Mark Cuban backs student debt startup ChangEd. The billionaire has spoken out repeatedly about the threat posed by the $1.4 trillion in outstanding student debt in the US and has challenged President Trump to act. Cuban is backing ChangEd with $250,000. The startup has developed an app that links student loan accounts with credit and debit cards. Card transactions are rounded up to the nearest dollar and the change is applied to student loans via an FDIC-insured ChangEd personal account. Someone using the app to pay $50 per month extra on their loans could save several thousand dollars in interest over the life of the loan, according to loan comparison site LendEDU. The app costs $1 per month for users. ChangEd secured support from Cuban on SharkTank.

Notley and Capital Factory partner on Austin social coworking space.Nonprofit impact investor Notley Ventures and Austin startup accelerator Capital Factory are launching a 10,000 square foot coworking space for social startups. The Center for Social Innovation (not related to the New York and Toronto string of offices) aims to fill a gap for social entrepreneurs by bringing together networks, events, educational institutions and entrepreneurial programs. The partners offer a network of 800 classes and 1,700 mentors. Notley founder Dan Graham says he wants to see Austin become the next hub for social innovation. Techstars made Austin the base for its new social impact accelerator in October.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#2030 Finance: Long-termism

Investors wake up to a $2.3 trillion opportunity in sustainable food and agriculture. A report two years ago cast the opportunity to secure the world’s food supply by 2030 as a $2.3 trillion annual opportunity that could create 80 million jobs, 90% of them in developing countries. Areas of opportunity included better fertilizers, improved data analysis, sustainable production and aquaculture, innovations in food processing and logistics and reductions in food waste. The opportunities could be realized with $320 billion in annual investment, estimated the report, from the Business and Sustainable Development Commission and AlphaBeta. The bad news: annual sustainable food and agriculture investment totaled only $4 billion.

There are signs investors took the hint. In the Global Impact Investing Network’s survey of impact investors last year, 63% of respondents — the largest group — reported allocating impact investment assets to food and agriculture. The survey found those allocations have grown 32.5% per year since 2013. Already in 2018, vegetarian hamburger companies Beyond Meatand Impossible Foods, and Memphis Meats, which grows meat in a lab, have each raised tens of millions of dollars from investors. Food corporations Cargill, Tyson Foods, PHW, and even fast-food chain McDonalds, are investingin alternative proteins. Combating food waste is also getting funded: WISErg, which is tackling the issue through tech innovation, and Australia-based Yume, which is finding new markets for surplus food, have raised early rounds of investor funding.

One thing those investment trends have in common is that they’re almost all targeting solutions for advanced economies. A few investors, like Meloy Fundand ECOTIERRA, are investing in sustainable agriculture and aquaculture in lower-income markets. Many more are focused on improving small farmers’ access to finance. Investments in food can help in other ways, too, including food security, poverty alleviation, climate resilience and community health. Nearly 800 million people worldwide are still hungry; more than 2 billion lack micronutrients such as vitamin A and iodine. Shifting the food system onto a sustainable development pathway, the Business Commission reports states, “will transform the entire food system, with major impacts throughout the value chain.”

Thank you for reading. Onward! Please send news and comments to [email protected]