Greetings, Agents of Impact!
Featured: Impact Voices
African agtech is boosting yields, protecting resources and raising incomes. Field drones. Harvesting robots. Big Data-driven farm insights. Innovative technological applications in agriculture can have a profound impact on farmers’ role in addressing food insecurity, climate change and livelihoods. Global agriculture technologies are gathering pace quickly as both high-impact technologies and potentially lucrative investments. Most of the traction and capital is based in the U.S. In Africa too, which accounts for 60% of the world’s uncultivated arable land, agribusiness is increasing its reliance on smart technologies and farming techniques. “The continent expects to face many challenges around resource scarcity and food allocation,” writes Unreasonable’s Pratibha Vuppuluri in a guest post on ImpactAlpha. Agtech ventures are a high-impact investment opportunity “with the potential to ignite sustainable economic growth and stability in the most job intensive industry in Africa,” she says.
- On the radar. African agtech ventures are showing up in the market with solutions designed for the unique experiences of the continent’s farmers, says Vuppuluri. Nigeria’s Farmcrowdy is bridging crowdfunding with the farming sector to help smallholder farmers secure funding. Ghana’s AgroCenta is an online sales platform that helps farmers earn more by skirting supply chain middlemen and selling directly to customers. South Africa’s Aerobotics is using high-resolution drone imagery and artificial intelligence to monitor crops. Cameroon’s Prom-Agric operates a mobile application that uses AI to analyze crop images and diagnose disease.
- Homegrown tech. Unreasonable has supported more than 240 high-impact companies worldwide. Its agtech venture portfolio includes Canada-based Terramera, U.S.-based Aerofarms, India-based Dehaat and Em3 Agriservices.
- Keep reading, “African agtech is boosting yields, protecting resources and raising incomes,” by Pratibha Vuppuluri on ImpactAlpha.
Emmanuel Faber’s ousting puts Danone on ‘impact watch’. The sudden removal of sustainable business champion Emmanuel Faber from Danone last week by activist investors was a blow to proponents of stakeholder capitalism (see, “In Danone’s drama, union pension fund advisor CtW turns the tables”). Just eight months earlier, Faber had won near-unanimous shareholder support to convert the French food giant into an enterprise à mission, a legal structure akin to a U.S. public benefit corporation. The drama raised questions about the effectiveness of benefit governance structures and, more broadly, about the future of stakeholder capitalism.
- Sustainable legacy. Faber’s “willingness to champion Danone’s new legal structure was bold and will be his legacy,” writes Andrew Kassoy of B Lab in a guest post for ImpactAlpha. Stakeholder governance doesn’t entrench individuals, he says. It entrenches purpose.
- Impact watch. Danone’s new chairman has affirmed its commitment to stakeholders, setting up a test for the company’s board and investors to live up to their legal accountability and mission, and “for all of us who are watching to hold them accountable,” says Kassoy. Changing the rules can help ensure accountability, he adds. “Investment fiduciaries must be responsible for the impact that their portfolio investments have on society.”
- Keep reading, “Emmanual Faber’s ousting puts Danone on ‘impact watch’,” by Andrew Kassoy on ImpactAlpha.
Dealflow: Follow the Money
The Nature Conservancy is building a portfolio of agtech ventures to improve soil health. The Washington, D.C.-based environmental organization formed a partnership with iSelect Fund, an impact venture firm that invests mainly in agriculture and healthcare, to source and invest in early-stage agtech ventures targeting soil health issues. TNC plans to build out a soil health portfolio of 10 or so companies, funded through a recoverable grant from an unnamed donor, TNC’s Renée Vassilos told ImpactAlpha. “Deteriorating soil health underpins many of the agricultural challenges facing us this century – from climate and biodiversity, to food security and freshwater,” said Vassilos. The goal of the fund: “to move us closer to our audacious goal of 50% of U.S. crop land under adaptive soil health systems by 2025.”
- Agtech portfolio. Early investments include Iowa-based Growers Edge, a fintech startup helping farmers secure income insurance (see, “Alt-credit and mobile-money apps give African fintechs a closeup view of climate risks – and opportunities“); Kula Bio, in Massachusetts, which is developing a low-cost biofertilizer that deposits nitrogen in the soil; and Australia’s SwarmFarm, a robotics farming tech company. Pattern Ag in California provides soil microbiome analysis and Stony Creek Colors in Tennessee works with farmers to develop sustainable, plant-based dyes.
- Nature investing. Separately, TNC worked with the Quintana Roo State government in Mexico and other local partners to create the first insurance policy to protect coral reefs (see, “The Nature Conservancy wants to bring reef insurance to the U.S.”), and through NatureVest, its in-house impact investing arm, helped structure an innovative debt-for-nature swap in the Seychelles (see, “Behind the scenes of the Seychelles debt-for-nature deal”).
- Dive in.
Dealflow overflow. Other investment news crossing our desks:
- HSBC Asset Management and International Finance Corp. close a $538 million green bond fund targeting “climate-smart investments” in emerging markets (see, “Adani Green Energy secures $1.4 billion loan for renewable portfolio in India”).
- Europe’s BSocial Impact Fund raises €38 million ($45 million) to back Spanish startups working to improve the lives of vulnerable people, tackle the climate crisis and close education skill gaps.
- TPG launches TPG NEXT to “seed, support and scale” diverse investors and entrepreneurs, and backs LandSpire Group, a Black-owned real estate firm.
Signals: Ahead of the Curve
Despite climate pledges, Goldman Sachs continues fracking finance. Three dozen banks have financed 2,100 fossil fuels companies with $2.7 trillion in the four years after the Paris Agreement. Goldman Sachs ranks 14 out of 35, having poured in $83.7 billion since 2016. The U.S. investment banking giant revised its environmental policy in 2019 and decided to stop financing new oil exploration in the Arctic and new thermal coal mines, and to put conditions on funding coal-fired power plants. Goldman was the first U.S. bank to adopt such policies. Still, the revised policy did not end the financing of fracking.
- Fracking finance. Goldman has financed the U.S. fracking industry to the tune of $11.6 billion – 5.2% of total fracking financing – since 2016, according to an analysis by Swiss impact ratings firm Impaakt. That ranks Goldman sixth among the top 15 bank financiers of fracking. Goldman’s continued fossil fuels financing is “contributing to rising sea levels through fossil fuels’ emissions,” writes analyst Jennifer Tapia Boada. The firm “needs to strengthen its fossil fuel policy and further restrict fracking projects.”
- Wonk out.
Agents of Impact: Follow the Talent
Prince Harry (yes that one!) joins BetterUp as chief impact officer… Michael Arougheti of Ares Management and Renée Beaumont, ex-of Generation Investment Management, join Volery Capital as senior advisors… Mark Campanale of CarbonTracker was awarded the Joan Bavaria Award for Building Sustainability into the Capital Markets by Ceres and Trillium Asset Management. Also, CarbonTracker has openings for a cleantech analyst, a head of investor outreach and a company research senior analyst.
Nasdaq is hiring an ESG analyst in New York… Whole Foods seeks a business development principal in Austin… Ford Foundation and Commonfund Institute are hosting “Investing in Diverse Fund Managers” with Commonfund’s George Suttles, Ford Foundation’s Gaby Sulzberger, Rockefeller Brothers Fund’s Valerie Rockefeller and Rey Ramsey of the Nathan Cummings Foundation, today at 1pm.
ImpactAlpha partner events:
- Phenix Capital hosts the Phenix Virtual Impact Summit Mar. 30 and 31. Speakers include Triodos’ Justina Alders-Sheya, Elevar Equity’s Sandeep Farias, Apollo Global Management’s Lisa Halland and Impact Investing Institute’s Sarah Gordon. Register now and use code ImpactAlpha2021 for a €200 ($237) discount.
- The Global Impact Investing Network hosts “Next Normal Now: Re-imagining Capitalism for Our Future,” Tuesday, Apr. 20. The convening takes on inclusive economic growth and includes a fireside chat with Ford Foundation’s Darren Walker and GIIN’s Amit Bouri. Register for free.
Thank you for your impact.
– Mar. 24, 2021