The Brief | May 24, 2021

The Brief: Cheat sheet for The Call, sustainability-linked loans, agtech in Indonesia, climate intelligence, impact measurement and management

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Greetings, Agents of Impact!

Featured: Agents of Impact Call 

The Call: Committing family capital to reconstruction and regeneration. We’ve been scribbling a cheat sheet in preparation for tomorrow’s Agent of Impact Call and thought: Why not give ImpactAlpha readers a sneak peek? We previewed the themes last week, around the mobilization of “family office” assets for racial equity and justice, regenerative agriculture, climate justice and more. Expect our guests to issue a call to action for more wealthy families to step up to commit capital, and catalytic capital specifically, to solutions across all asset classes and urgent challenges. Unlike pension funds and asset managers constrained by “fiduciary duty,” wealth families “have the discretionary power to declare impact-first one of their investment tools of choice,” Bridgespan’s Michael Etzel and Mariah Collins argued in a post on ImpactAlpha last week. 

It’s rare to have principals – that is, wealthy individuals themselves – willing to speak directly about the responsibilities and opportunities for family capital. Diane Isenberg has adopted an “impact-first capital preservation” strategy and is moving Ceniarth’s entire portfolio of approximately $400 million out of “market-rate” impact vehicles and into agricultural loan funds in Africa, community development financial institutions in the U.S., and other low-return but high-impact investments. Regan Pritzker and her family have endowed Kataly Foundation “to generate transformation, abundance and regeneration in Black, Indigenous and other communities of color,” through low-interest loans and other capital support. Sheri Sobrato Brisson, a Silicon Valley real estate fortune heir, creates psychosocial tools, including video games, for teens with medical challenges. “Catalytic capital is key to advancing justice because it is powerfully impact-first and flexible,” says Debra Schwartz of the MacArthur Foundation. MacArthur, along with Rockefeller Foundation and Omidyar Network, have formed the Catalytic Capital Consortium, or C3, which sponsors ImpactAlpha’s catalytic capital coverage.

Dealflow: Sustainability-linked

Micron’s lenders reward environmental performance with $3.7 billion in sustainability-linked loans. The Boise, Idaho-based computer memory and storage maker will get a discount on interest rates if it cuts greenhouse gas emissions, reduces hazardous waste sent to landfills, and meets other corporate sustainability goals. “In tying our environmental metrics to our financial performance, we aim to achieve positive sustainable impact while taking another step in integrating sustainability into all aspects of our business,” said Micron’s David Zinsner. The credit facilities, structured by Crédit Agricole, include a five-year $2.5 billion line of credit, and a $1.2 billion loan that matures in October 2024.

  • Sustainable finance. The volume of sustainability-linked loans reached nearly $120 billion last year, up from $5 billion in 2017, according to Bloomberg. More than 40 sustainability-linked loans closed in the first two months of 2021, including one of the largest, a $10.1 billion revolving credit facility for Belgium-based Anheuser-Busch InBev.
  • Racial equity. Micron committed $50 million in cash and short-term investments to an impact strategy managed by RBC Global Asset Management to spur economic growth in Black and other underserved communities across the U.S. (see, “Micron invests $50 million to reduce U.S. racial wealth gap”).
  • Dig in

TaniHub Group secures $65.5 million for its agtech platform in Indonesia. The agtech marketplace launched in 2016 to help smallholder farmers in Indonesia reach more customers and grow their income. “There are many small players with limited service coverage areas,” said TaniHub’s Pamitra Wineka. Mini-hubs with local governments, will help the company “be closer to farmers and communities so that we can reduce the price disparity between farmers and consumers.” TaniHub’s online network includes 45,000 farmers and 350,000 buyers.

  • Agtech investors. The Series B round was led by MDI Ventures, with participation from AddVentures, BRI Ventures, Flourish Ventures, Openspace Ventures, Tenaya Capital, UOB Venture Management and Vertex Ventures.
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Cervest secures $30 million to predict climate risks for physical assets. The London-based B Corp. uses artificial intelligence to help insurers, regulators and financiers to assess risks to buildings, farms and other assets. Cervest’s Series A round was led by venture firm Draper Esprit, which calls climate intelligence a $40 billion market. Chris Sacca’s Lowercarbon Capital, Marc Benioff’s TIME Ventures, and Tetra Pak heir Magnus Rausing’s UNTITLED also participated.

  • Tailwinds. U.S. President Joe Biden last week signed an executive order directing agencies to consider climate risk across housing, finance, retirement and other areas. The Securities and Exchange Commission in March put out a call for public comments on climate disclosure rules.
  • Check it out.

Dealflow overflow. Other investment news crossing our desks:

  • Alt-protein company Eat Just secures $170 million to scale its cell-based meat subsidiary, GOOD Meat. The company raised $200 million for in March.
  • Financial services firm Synchrony commits $15 million to venture capital funds led by Black, Latinx and female partners, including Chingona Ventures, Seae Ventures and Zeal Capital Partners.
  • Media Development Investment Fund launches MDIF Ventures with $1 million to invest in a dozen independent media companies in countries with limited access to free and independent news.

Signals: Ahead of the Curve

Can better impact measurement and management pull trillions of dollars off the sidelines? Impact-curious asset allocators and managers are eager for standards, performance assurance and benchmarks. Gaps in market infrastructure for impact management and performance are leaving both capital and impact on the table. To meet expectations, standard setters are distilling best practices into actionable tools and benchmarks.

  • Benchmark for best practices. Almost 130 investors have signed onto the Operating Principles for Impact Management, introduced in 2019 by the International Finance Corp. Signatories commit to disclosing and verifying alignment with the standards for best practices in impact measurement and management. BlueMark has aggregated findings from more than 30 verifications for investors, from CDC Group to LeapFrog Investments, into the BlueMark Practice Benchmark to differentiate between practice leaders and learners. “By establishing a shared consensus on best practices in impact management, we have created a valuable tool that we hope market participants can use to improve their own practices and to see where they stand against their peers,” says BlueMark’s Christina Leijonhufvud (BlueMark is an ImpactAlpha sponsor).
  • Comparing impact. Compass, a new tool from the Global Impact Investment Network, offers a standardized methodology to compare impact across investments and funds. Investment impact, for example, can be normalized for scale (for example, increased access to clean drinking water for 46,000 individuals during a one-year period); pace (contributions toward an annual increase of 12% in individuals with access to clean drinking water); and efficiency (for every $100,000 invested, 610 additional individuals gain access to clean drinking water). By making impact information credible and comparable, writes Rachel Bass, “the GIIN expects to see more capital to flow toward impact and, even more critically, more impact to result from each dollar of capital invested.”
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Agents of Impact: Follow the Talent

Nabiha Saklayen, co-founder of Cambridge, Mass.-based Cellino, is the first recipient of the Tory Burch Fellowship at the Innovative Genomics Institute… The Rockefeller Foundation seeks a director of innovation in New York… The U.S. International Development Finance Corp.’s Office of Development Policy is hiring a managing director of impact management and monitoring in Washington, D.C.… Social Venture Circle is looking for a manager of impact investor services, preferably in the Philadelphia area… Energy Innovation: Policy and Technology has an opening for a program officer, preferably in Washington, D.C. or San Francisco… The Russell Sage Foundation is accepting applications for its Visiting Scholars Program through June 24.

Applications are open for Northwestern Mutual and gener8tor’s Black Founder Accelerator… The Sorenson Impact Center is partnering with Socap Global to present the Sorenson Impact Summit, May 25-27. ImpactAlpha subscribers get a 20% discount on SOCAP, SPECTRUM and Integrate tickets with code np_impactalphaS&P Global is hosting “Accelerating the Transition to Sustainability,” May 25-27… Also May 25, Social Next Foundation hosts “Institutional capital: driving change towards a sustainable future”… TriLinc Global is hosting “ESG: Drivers and opportunities for institutional investors,” May 27.

Thank you for your impact.

– May 24, 2021