Resilience in Brazil, Mirova buys Althelia, pandemic bonds, Brief Quiz №21



Hello ImpactAlpha readers! Many U.S. readers are heading out for a long weekend, and so are we. See you again next Wednesday.

#Featured: Returns on Investment podcast

Brazilian impact investors are resilient and optimistic. With the economy in recession and the government in turmoil, Brazilian investors could be feeling glum. But Fernando Scodro of Grupo Baoba, the third-generation of a wealthy Brazilian baking family, says there’s growing excitement about impact investment opportunities to restore the environment and improve access to vital services for low-income Brazilians. ImpactAlpha’s David Bank interviewed Scodro, who next week is launching the Brazilian chapter of The ImPact, a network of wealthy families that have come together to make more impact investments, more effectively. “When families start saying, I will invest according to my values, that’s something you can hold them accountable to,” Scodro says in the podcast. “If everything goes well and everybody does what they say they are going to do, then we can get out of the mess.”

Listen to the Returns on Investment interview with Fernando Scodro, on ImpactAlpha:

Amid crisis, Brazilian impact investors are resilient and optimistic (podcast)

#Brief Quiz

Ready for the weekend? What is Jean Case’s new challenge to the world? What’s up with emerging markets? What’s the “Educate Girls” development impact bond at risk of? Take The Brief Quiz №21 by Jérôme Tagger:

Death, women, and Bill Gates on forecasting the future (Brief Quiz № 21)

#Dealflow: Follow the Money

Mirova set to take a majority stake in Althelia Ecosphere. The acquisition is expected to close in a few weeks and over the next five years Mirova would increase its stake in the Luxemburg-based fund manager. The deal could put serious money behind Althelia’s model of forest conservation projects based on both carbon credits and sustainable commodities such as rubber in Indonesia, cocoa in the Ivory Coast and cattle in Brazil. France-based Mirova is an $8 billion unit of Natixis Global Asset Management, which has nearly $900 billion under management. Financial News reports the Althelia team would help Mirova raise €1 billion for a Land Degradation Neutrality fund, in conjunction with the United Nations. The European Investment Bank and France’s AFD are backing the fund, which will seek investments from pension funds and other institutional investors. “We strongly believe that natural capital is the next frontier of impact investment,” Philippe Zaouati, Mirova’s CEO, said in a statement. “Specialist skills and a critical size are required to successfully address this nascent but promising market.” Althelia’s Sylvain Goupille called the deal “an important step to move ecosystem-based finance into the mainstream investment space.”

Word Bank bonds to fight infectious disease. The Bank sees a role for private capital in preventing pandemics like the Ebola crisis in West Africa and future influenza outbreaks. Two bonds are looking to collectively raise $322 million, backed by the Bank’s Pandemic Emergency Financing Facility, which is trying to build an insurance market for pandemic risk.The three-year bonds are being offered at rates of 6.5% and 11.1%. The World Bank has been experimenting with bond markets as a way to channel capital for global problems. It has issued more than $10 billion in green bonds and recently raised $173 million with the first “SDG bond” to finance the 2030 global goals.

Social crowdfunding platform JustGiving exits to Blackbaud. The U.K.-based fundraising site is being acquired, mostly for cash, by non-profit software provider Blackbaud for £95 million ($124 million). JustGiving, launched in 2001, is a veteran in the crowded crowdfunding space. It has facilitated $4.5 billion in peer-to-peer social funding to organizations in 164 countries. Blackbaud’s software helps charities manage fundraising. It is buying JustGiving because of growth in “social and mobile fundraising driven by individual supporters rallying others.”

BMW and GE back manufacturing startup Xometry. Manufacturing in the U.S., on a downward trajectory for decades, has taken a nosedive since 2000. Improving technology and automation have played a big part. Xometry flips that by using software to put more, smaller manufacturing companies to work. That’s also the vision of “The Next Product Revolution,” an initiative of the G7. Maryland-based Xometry wants to be the “Amazon for manufacturing” and already helps 500 manufacturers connect with clients. Two of its former customers see the value: BMW i Ventures just led a $15 million raise for the company (with participation from existing investors GE Ventures and Highland Capital Partners) after GE led a $7 million raise in February. Xometry currently works with 500 manufacturing companies. More than 12 million Americans depend on manufacturing for their livelihoods.

See all of ImpactAlpha’s recent #dealflow.

#2030: Long-Termism

A Hippocratic Oath for the Sustainable Development Goals. Before doctors begin their practice, they pledge to do no harm and remember to “remain a member of society, with special obligations to all my fellow human beings.” This principle underpins the U.N. Sustainable Development Goals as well. Yet, the 2030 global goals may need their own Hippocratic Oath when it comes to environmental conservation and sustainability.

The most acute risk of unintended consequences may arise in Sustainable Development Goal №14: ocean conservation. Almost 50% of the world’s population lives within 150 kilometers of a coastline. Many of those people depend on the seas for food security and their livelihoods; most of the world’s fisheries are small-scale or community run. Ocean conservation therefore needs a “social code of conduct,” argue Rebecca Jarvis and Nathan Bennett, research fellows at Auckland University of Technology and the University of Washington, respectively. “There is a risk that some actions taken will undermine the rights and needs of local people.” Such a code could include:

Fair conservation governance and decision-making processes to ensure respect for and participation from local communities, indigenous people, traditional users, and marginalized populations.

Socially-just conservation action that recognizes tenure and rights of indigenous communities and local traditions, accounts for food security and social welfare, and incorporates enforceable “benefit sharing” arrangements.

Accountable conservation organizations that adapt best practices and commit to transparency and conflict remediation.

The recommendations are broad, but are the starting point for a more comprehensive framework. “Marine conservation is not just about saving oceans and charismatic species,” the authors write. “It is also about safeguarding the resources of people who rely on the sea and live in coastal communities.”

That’s a wrap. We’re going to celebrate the virtues of independence by taking a 4th of July break. We’ll be back on Wednesday, July 5th. Onward! Please send any news and comments to TheBrief@impactalpha.com.

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