The Brief | October 2, 2018

Teaching impact as a second language, investors in Paris, mini-grids in Bangladesh, Goldman’s proxy voting

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Featured: ImpactAlpha Original

Teaching impact as a second language in business schools. “Impact” is not just for social work and public policy schools. It’s now a driving force for innovation in business education as well. That puts professors fluent in both impact and business on the forefront of change. “Impact investing as a set of ideas upholds the academic oath to promote critical inquiry,” says Sara Minard, chief program officer at the College for Social Innovation in Boston. Minard’s social finance course at Northeastern University helped students develop strategies for investing in local social enterprises, and helped Minard win an Ideas Worth Teaching award from the Aspen Institute’s Business & Society program.

Minard is one of dozens of academics across the country, and hundreds globally, pushing to embed social and environmental values in business and finance education curricula. “Students should be equipped to make their investment pitch to a wide range of investors and financial institutions from across the risk spectrum,” she says in an interview with writer Ann Graham for ImpactAlpha. “Even the most curmudgeon or pessimistic business school students leave my class with the feeling that they need to open up their horizons about what they could actually do with their degree.”

Read the Q&A with Sara Minard, “Teaching impact as a second language in business schools,” on ImpactAlpha.

Students and professors: Bring ImpactAlpha into your MBA or other academic program. In partnership with the Impact & Sustainable Finance Faculty Consortium, we have full and partial scholarships for impact faculty and school libraries (thanks, Rockefeller Foundation!). Send a note to [email protected] with the subject line: “Impact Ed.”

Event: The GIIN Investor Forum, Paris, Oct. 30-31

Be in the room where it happens. The latest impact investment products. Investing in the Sustainable Development Goals. And yes, the impact potential of artificial intelligence and blockchain. Join ImpactAlpha, more than 1,000 impact investors and 150 founders and CEOs from 65 countries at the annual forum of the Global Impact Investing Network. Use “Impactalpha-GIF18” for a discount. Register now.

  • Agents of Impact gathering. ImpactAlpha is curating a very Parisian dinner and salon Oct. 30 alongside the GIIN Investor Forum. Sign up here for more information.

Dealflow: Follow the Money

IIX backs Bangladesh solar mini-grid startup SOLshare. Bangladesh-based SOLshare launched in 2015 with an off-grid solar model that allows groups of households to share energy generated from their rooftop panels. Impact Investment Exchange led the company’s $1.7 million Series A round through its venture fund, IIX Growth Fund. SOLshare hopes to reach 19,000 rural households with the new funding. Learn more.

Origo raises $11 million to finance Indian agribusinesses. The Gurgaon-based lender offers financing to small businesses in India’s agriculture sector. It specifically focuses on “post-harvest” financing, which is more difficult for businesses to secure than at the start of the planting season. Its first round of investment capital was arranged by Unitus Capital and backed by Dutch impact organizations Oikocredit, Hivos and Triodos, and Hyderabad-based Caspian. Dig in.

Western New York Impact Investing Fund backs recycled insulation startup CleanFiber. The $750,000 debt deal is the latest investment from the $8 million place-based impact fund targeting western New York. Buffalo-based CleanFiber uses recycled corrugated cardboard to make cellulose insulation for attics, walls and floors. The funding, part of a larger round, will help finance a new production facility, create more than 30 jobs and produce up to three million bags of cellulose insulation a year. Read on.

Signals: Ahead of the Curve

Will Goldman Sachs’ JUST index fund ‘infect the host’? In June, Goldman Sachs Asset Management launched the JUST exchange-traded fund to capitalize on investor interest in sustainability and ESG performance. JUST ended its first day of trading with $251 million in assets, making it one of the most successful ETF launches ever. Now, an investigative report has taken to task Goldman Sachs Asset Management, which supervises approximately $1.3 trillion in assets, for its record of proxy voting on shareholder resolutions at companies in the fund. The ETF tracks an index created by the nonprofit JUST Capital, which was co-founded by hedge fund billionaire Paul Tudor Jones.

The controversy highlights an emerging issue at more mainstream financial institutions: How firms that tout the “impact” portion of their portfolios can be held to account for all of their investments? Conventional wealth managers like Goldman, BlackRock, JP Morgan, UBS and Credit Suisse, along with private-equity giants like TPG, Bain and KKR, are the fastest-growing category of impact investors. But that capital is only a tiny fraction of those firms’ total assets. Inside such hybrids, new impact products and funds live alongside conventional investments, making clear not only client demand, but financial performance—and impact. “The logic worms its way into the machine, the virus infects the host,” as ImpactAlpha’s David Bank wrote in a column in May. Indices like JUST also invite scrutiny of the criteria under which a company is considered “just” or sustainable. In an email exchange with ImpactAlpha, JUST’s Martin Whittaker helped deconstruct JUST’s rankings for companies that have come under scrutiny, such as Exxon, JPMorgan, Amazon – and Goldman Sach itself.

Keep reading, “Will Goldman Sachs’ JUST index fund ‘infect the host’?” by David Bank on ImpactAlpha.

Agents of Impact: Follow the Talent

Ken LaRoe of First Green Bank in Orlando, Fla., is the “Community Banker of the Year” according to the Independent Community Bankers of America… Leapfrog Investments is looking for someone to head its impact labs… Blackstone Charitable Foundation seeks a senior vice president… Mission Investors Exchange is hiring a digital associate.

October 2, 2018.