The Brief | November 22, 2021

The Brief: Climate-adjusted returns, impact performance standards, farm fintech, Navajo power, Bay Area anchor, shuttles in Nigeria

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Greetings, Agents of Impact! 

🏦 Agents of Impact Call No. 35: Capitalism Reimagined. A sustained, inclusive and collective effort is needed to build an economy that uses markets to serve the common good. The New Capitalism Project is exploring what such an economy could look like, what’s holding it back, and the ideas and initiatives to move it forward. The Coalition for Inclusive Capitalism’s Meredith Sumpter, Indigenomics Institute’s Carol Anne Hilton, Majority Action’s Eli Kasargod-Staub, the Global Impact Investing Network’s Amit Bouri, and other Agents of Impact will discuss inside/outside interventions for a broken economic system, in conversation with Omidyar Network’s Chris Jurgens and ImpactAlpha’s David Bank, Tuesday, Nov. 30 at 10am PT / 1pm ET / 6pm London. RSVP today.

Featured: Impact Voices

The right capital in the right place at the right time can take climate impact beyond ‘net zero.’ The claim by U.N. climate envoy Mark Carney at the just-finished COP26 climate summit that “over $130 trillion of private capital is committed to transforming the economy for net-zero” is getting a well-deserved interrogation. “Net zero financing pledges must be brought forward in time for them to matter, through real near-term investments that accelerate the decarbonization of energy infrastructure in the real economy within the next five years,” Encourage Capital’s Adam Wolfensohn and Daniel Firger write in a guest post on ImpactAlpha. “This investment capital must be targeted not only in time but also in space, focusing on the precise geographies and markets that matter most to shifting the future trajectory of global emissions.”

  • Location, location, location. A single solar-plus-storage project in Southern California, they argue, won’t do much to shift U.S. emission. But that same project could catalyze systemic changes in Cambodia, with positive spillover effects across coal-dependent Southeast Asia that prevent carbon lock-in for decades. The Asian Development Bank’s Energy Transition Mechanism, for example, aims to accelerate the early retirement of coal assets. Likewise, South Africa’s Just Energy Transition Partnership will bring financial resources to support coal-dependent workers and accelerate the country’s transition to a zero-carbon energy system. Wolfensohn and Firger applaud both initiatives’ public sector leadership. “But the only way we can move quickly enough on the path to net zero is if private investors follow suit,” they write, calling on public and private financial institutions “to design, launch, and invest in vehicles that maximize climate-adjusted returns first, and risk-adjusted returns second.”
  • Keep reading, “The right capital in the right place at the right time can take climate impact beyond net zero, by Adam Wolfensohn and Daniel Firger on ImpactAlpha. 

Adopting impact performance standards to hold sustainable investing accountable for real-world outcomes. Recent efforts to harmonize the measurement and reporting of ESG data in private markets reflect market demand for standardized and comparable information. However, “acting on impact data is not about tracking a handful of universal metrics, but rather about evaluating how and which investment decisions can lead to better and longer-lasting outcomes for society and the planet,” BlueMark’s Christina Leijonhufvud and Sarah Gelfand and the Global Impact Investing Network’s Kelly McCarthy and Dean Hand argue in a guest post (BlueMark is a sponsor of ImpactAlpha). 

  • Clarity, context, contribution. The authors say investors need information about the intentions of an investment, the scale of the sustainability challenge being addressed, and the manager’s contribution and expertise. The GIIN earlier this year released COMPASS to help investors compare impact, interpret changes over time, and assess performance against gaps in specific social and environmental solutions. With support from The Tipping Point Fund on Impact Investing, the two organizations are working on impact performance assurance and benchmarks to “contribute to enhanced accountability and confidence in impact investing.”
  • Keep reading, “Adopting impact performance standards to hold sustainable investing accountable for real-world outcomes,” on ImpactAlpha.

Dealflow: Follow the Money

Navajo Power secures $9.5 million to provide clean electricity for Navajo Nation. The Flagstaff, Ariz.-based B Corp. will work with Native-owned organizations to develop utility-scale energy projects and says it will reinvest 80% of profits into new projects for Navajo communities. Navajo Power aims to deliver over $3 billion of clean energy infrastructure assets by 2030 to power households on the reservation, where 15,000 families lack access to electricity. “Tribal nations are on the frontlines of the clean energy transition, having suffered disproportionately by detrimental health, environmental and economic impacts,” said Navajo Power’s Brett Isaac. “This latest fundraising round will help us ensure that Native communities not only recover, but are the prioritized beneficiaries and stewards of the clean energy revolution.”

  • Catalytic capital. The financing round includes a $3 million program-related investment from W.K. Kellogg Foundation. “It was important for us to take on equity risk but structure this as flexible debt in order for Navajo Power to retain Native ownership of the company for the long-term,” said Kellogg’s Susie Lee.
  • Plug in

Farmers Business Network rakes in $300 million to scale up its agtech platform. The San Carlos, Calif.-based company has a network of more than 33,000 farmers managing 80 million acres in North America and Australia. FBN launched in 2014 to crowdsource pricing data for seeds, fertilizer and other farm inputs in a sector that profits from opaque pricing. Its offerings have grown to include equipment loans and insurance, crop protection, seed breeding and carbon monitoring. “Our mission is always to increase the profit potential of family farms,” said FBN’s Amol Deshpande.

  • Farm fintech. FBN last year spun off GRO Network, which tracks the carbon footprint of grains. Investors in the Series G round include Fidelity, ADM Ventures, Tudor Investment and early investors DBL Partners and GV. The round values the company at $3.9 billion.
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UC San Francisco backs four Bay Area organizations for place-based impact. UCSF allocated a total of $5 million in debt to organizations providing low-interest loans to underserved borrowers in the Bay Area. The San Francisco Housing Accelerator Fund received $1.5 million to tackle homelessness through affordable housing loans; Pacific Community Ventures received $1.5 million to launch a fund for small business loans with no fees or interest; REDF Impact Investing Fund received $1 million to lend to businesses hiring recently-incarcerated people; and ASIAN Inc. received $1 million to lend to housing projects and minority contractors, as well as low-income minority business owners.

  • Community finance. UCSF, which operates a major medical center, is tapping its $7 billion operating budget to strengthen its role as an anchor institution and invest in health and economic equity in the Bay Area. The three-year community investment pilot is the first such program in the University of California system.
  • Onward

Dealflow overflow. Other investment news crossing our desks:

  • Sofinnova Partners raises €150 million ($169.3 million) to invest in early-stage companies using biotech to drive sustainability in food, agriculture, chemicals and materials.
  • Bain Capital Double Impact leads Toronto-based HiMama’s CA$70 million (US$55.4 million) Series B round to provide early childhood learning tools for daycare centers and families.
  • Shuttlers, a woman-led tech platform connecting commuters to shuttle buses, snags $1.6 million to expand in Nigeria and Ghana.
  • LionVolt scores €4 million ($4.5 million) in seed financing to develop solid-state lithium-ion batteries for the aviation and electric vehicle industries.

Agents of Impact: Follow the Talent

Abacus Wealth Partners names Mary Beth Storjohann and Neela Hummel as co-CEOs to replace Brent Kessel, who will step down effective Feb. 1 (see, “Brent Kessel: Expanding what’s possible with money”)… Project Equity names Evan Edwards, formerly the nonprofit’s director of strategic partnerships and business engagement, as CEO… Alyssa Padron, ex- of Mashup Foods, joins DivInc as its Austin program director. The nonprofit is accepting applications for its Social Justice Accelerator.

Shift Capital seeks a senior vice president of asset management… Prime Coalition is hiring a director of impact in Cambridge, Mass… The Ford Foundation is looking for a manager of portfolio operations in New York… Also in New York, SecondMuse is looking for a part-time program consultant in New York; and UBS is recruiting a community affairs program manager for its education portfolio.

The Heinz Family Foundation names HOPE Credit Union’s Bill Bynum and A Better Balance’s Dina Bakst and Sherry Leiwant as recipients of the Heinz Awards for the Economy; North Dakotan regenerative agriculture pioneer Gabe Brown and the Chisholm Legacy Project’s Jacqueline Patterson receive the environment award.

Thank you for your impact.

– Nov 22, 2021