Greetings, Agents of Impact! President Biden exercised his first veto to protect a Department of Labor rule allowing pension plan managers to consider environmental, social and governance risks in investment decisions. Biden said repealing the rule “would put at risk retirement savings of individuals across the country.”
Featured: International Forest Day
Tree planting has gotten a bad name. Here’s how to restore its effectiveness as a climate solution. What’s not to love about planting trees? Once considered a simple and reliable solution to the climate crisis, tree-planting’s reputation has been sullied by misleading carbon offsets, “phantom credits,” and greenwashing by some ostensible champions. The backlash has left funders hesitant to invest in tree-growing efforts and unsure how to identify projects with genuine impact. Planting trees, along with protecting, conserving and enhancing our existing forests, remains an effective strategy for reducing greenhouse gasses and providing for human material needs, argues Erin Axelrod of Jonas Philanthropies’ Trees for Climate Health initiative. “Instead of abandoning this work, we need catalytic capital to flow to the right tree-growing initiatives to restore trust in trees as a climate solution and empower the communities leading these projects to grow and scale their work,” Axelrod writes in a guest post on ImpactAlpha.
- Right tree, right place. In Alabama, the Ekvn-Yefolecv “silvopasture” project is growing hundreds of trees, rematriating bison and protecting more than 730 acres of endangered longleaf pine montane ecosystems. The Indigenous-led project is catalyzing landback, livelihoods and Indigenous self-determination, and protecting lands from the risks of mining and timber harvesting. It’s also helping sequester nearly 200 tons of carbon annually. In the tropical Amazon, nonprofit Aliados works with over 90 Kichwa Indigenous farming communities to create resilient community businesses based on biodiversity. Jonas Philanthropies calls this approach right tree, right place, right community. Projects that “encompass a more holistic approach to growing trees while centering frontline communities,” says Axelrod, “might just make a difference for a liveable future.”
- Raising ambitions. “The pace and scale of what has been done so far, and current plans, are insufficient to tackle climate change,” warned authors of the new report from the U.N.’s Intergovernmental Panel on Climate Change. The report “underscores the urgency of taking more ambitious action and shows that, if we act now, we can still secure a liveable sustainable future for all.”
- Keep reading, “Carbon credits have given tree-planting a bad name. Here’s how to restore it,” by Erin Axelrod of Jonas Philanthropies.
Privately owned working forests are a climate asset. From the 1960s to the 1980s, New York investor Fred van Eck purchased more than 9,400 acres of forest in northern California and Oregon for timber production. With sustainable, conservation-based management, van Eck’s forests have absorbed carbon at levels equivalent to taking 405,613 cars off the road, while providing 800,000 reams of paper and enough timber to frame more than 3,000 houses. In a guest post, his son, Jan van Eck, who now leads investment firm VanEck, and Laurie Wayburn of Pacific Forest Trust argue that millions of acres of working forests “have the potential to become part of the climate solution, delivering far-reaching benefits to the climate, the environment and our economy.”
- Sustainable timber. VanEck used working forest conservation easements – permanent legal agreements to restore and maintain forests’ carbon-rich and climate-resilient qualities – to prioritize their use as carbon sponges. Through the easements, owners are compensated for the opportunity costs of foregoing timber development and production and managing them for climate adaptation.
- Policy accelerator. “We must increase the public investment in forest conservation and restoration so it’s equivalent to what we are spending on other proven climate solutions,” say Wayburn and van Eck. Colorado, for example, increased the value of tax credits for conservation easements to 90% of a property’s value. That makes it just as profitable to preserve forests as to log them. A tweak to the USDA’s Forest Legacy Program, the authors argue, would go even further in transforming private forests into powerful climate change-fighting tools.
- Keep reading, “Privately owned working forests are a climate asset,” by Laurie Wayburn of Pacific Forest Trust and Jan van Eck of VanEck.
Dealflow: Financing Farmers
Eco.business Fund stakes $10 million to Absa Bank to boost agribusinesses’ climate resilience in Kenya. The Finance in Motion-managed fund blends finance to support sustainable economic development in emerging markets. It inked an agreement with Absa’s Kenya division to expand lending to help agri-producers, aggregators, processors and exporters “achieve more biodiversity and climate friendly sustainable production and exports while alleviating food insecurity,” eco.business Fund’s Michael Evers said. Eco.business Fund has received €67 million ($72 million) from Germany’s Ministry for Economic Cooperation and Development and German development finance institution, KfW, both of which co-founded the fund along with Conservation International.
- Risk mitigation. Banks have been reluctant to lend to businesses in the agricultural value chain. To mitigate risks for Absa and encourage more agri-lending, eco.business will fund training on post-harvest loss reduction and financial literacy for 300 of the bank’s partners and clients. Separately, eco.business is providing technical assistance to Family Bank in Kenya to boost its agri-lending practices.
- Check it out.
Wheel the World secures $6 million to make travel more accessible to people with disabilities. The Berkeley, Calif.-based travel planning site aims to “make the world accessible” for people with disabilities. “We believe that we, people with disabilities, should experience the world like anyone else,” says the company. Wheel the World’s co-founder, Alvaro Silberstein, who uses a wheelchair. (Roughly 2% of the world’s population requires a wheelchair; 11% of Americans have a mobility-related disability.) The company offers planned, disabled-accessible trips to more than 50 destinations, including New York, London, Jaipur, India, and Cusco, Peru. It also offers a search feature for accessible hotels.
- Traveling with a disability. International airlines are expected to fly nearly four billion passengers this year, representing a near recovery to pre-Covid travel levels. Travel can be disproportionately expensive, onerous and logistically-difficult for people with restricted mobility. Wheel of the World raised its pre-Series A round from online travel site Kayak’s venture arm, Detroit Venture Partners, REI Co-op’s Path Ahead Ventures, CLIN Fund and others.
- Disability equity. Investing to close disability wealth and access gaps and empower individuals is an emerging trend in impact investing. Enable Ventures, led by Regina Kline, is investing in companies addressing the disability wealth gap (see, “Agent of Impact”). The Ford Foundation and Borealis Philanthropy have partnered on the Disability x Tech Fund to channel $1 million to organizations working at the intersection of disability rights, justice and technology (see, “The impact case for bridging financing gaps for disabled founders”).
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Dealflow overflow. Other investment news crossing our desks:
- Inspired Evolution reached a first close of $199.4 million for its third energy transition fund. The fund, which invests in on-grid and off-grid renewable energy projects in Africa, is targeting $400 million.
- Charge+Zone raised $54 million in debt and equity financing from BlueOrchard Finance and others to install hundreds of new EV charging stations for buses and trucks in India.
- Brazilian fintech venture Barte raised $3 million to help small businesses manage payments and access capital.
- Netherlands-based AG5 secured €6 million ($6.4 million) to help manufacturing companies upskill frontline workers.
- India’s Gynoveda scored $10 million from India Alternative Fund and others to provide online consultations to women about menstrual cycle-related health issues.
Signals: Metrics Madness
Ten outcomes and three levers for investors in racial and economic equity. Moral imperative? The threat of economic instability? Or the unrealized economic potential of the U.S.’s diversity? Whatever their motivations, a new framework for investors in racial and economic equity lays out a roadmap for action and a rubric for assessing progress in redressing the legacies of racial inequality. “With the scale of these challenges, we need all investors to lead the way in a way they have never led before,” PolicyLink’s Michael McAfee said on a virtual panel organized by the New York Federal Reserve. PolicyLink, a nonprofit research and action institute, developed the “Investor Blueprint for Racial and Economic Equity” with impact advisory firm CapEQ and consultancy FSG.
- Curb-cut effect. The report stresses that tailoring smart strategies and investments to historically-underinvested and excluded groups “has the distinct power to cascade benefits upward and outward for the wellbeing of society” (see, “Capitalism reimagined for fair gainsharing and equitable prosperity”). The report details 10 outcomes that are key to translating good intentions into effective investments, including equitable governance and leadership, accountability through transparency, and “reckoning and repair,” through which institutions assess and acknowledge accountability for racial injustice.
- Key metrics. The framework provides additional structure and rigor for Metrics Madness, ImpactAlpha’s effort, in partnership with Southern Reconstruction Fund, to identify key metrics for assessing racial wealth-building investment strategies (see, “Tracking investment theses against the promise of Reconstruction”). Join the finale to Metrics Madness on ImpactAlpha’s Call No. 50 on Wednesday, March 29. RSVP today.
- Keep reading, “Ten outcomes and three levers for investors in racial and economic equity,” by Roodgally Senatus and David Bank on ImpactAlpha.
Agents of Impact: Follow the Talent
Mafalda Duarte is leaving Climate Investment Funds to join the Green Climate Fund as executive director, replacing Yannick Glemarec, who steps down next month… Gabe Kleinman, ex- of Obvious Ventures, joins Emerson Collective as venture capital operating partner.
Upaya Social Ventures seeks a remote communications intern… KOIS is on the hunt to fill several open positions in Brussels and Mumbai… The New York State Insurance Fund is hiring a senior ESG and sustainability lead… LGT Venture Philanthropy is looking for an impact fellow in data science, ESG or client relations management in Sao Paulo.
UBS is looking for a climate and sustainability strategist in Zurich… IMPACT Partners has an opening for an analyst in Barcelona… Varrlyn seeks an investment manager for an agrifood fund in Amsterdam… Finance in Motion is looking for a fund management analyst in Bogota.
The Nature Conservancy is accepting proposals from institutions to collaborate on a nature-based carbon credits investment fund… The Workers Lab’s Innovation Fund is accepting fellowship applications from early-stage founders addressing challenges faced by workers… The American Evaluation Association’s Social Impact Measurement group will host a virtual event on impact investing, tomorrow, March 22.
Thank you for your impact.
– March 21, 2023