The Brief | February 3, 2021

The Brief: Climate-smart boards, net-zero electrofuels, inclusive fintech in Africa, supply chains in Brazil, Carmen Rojas on The Reconstruction

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Greetings, Agents of Impact! 

Featured: Impact Voices

Corporate boards are not leading companies where they need to go. Board leadership on material environmental, social and governance, or ESG, issues has become a must-have for corporations in the 21st century, New York University business professor Tensie Whelan argues in a guest post on ImpactAlpha. Case in point: ExxonMobil. As it reported its fourth straight quarterly loss yesterday, the wounded oil major added an independent board member and announced investments in low-carbon technology to try to hold off a shareholder revolt. Too little too late. “ExxonMobil shareholders deserve a Board that works proactively to create long-term value, not defensively in the face of deteriorating returns and the threat of losing their seats,” declared Engine No. 1, the activist hedge fund pushing for bigger changes (see, “There’s a new impact sheriff in town: activist hedge funds“). The dearth of leadership on climate issues extends across the Fortune 100: of 1,188 individual board members in 2018, Whelan found that just three had climate-change credentials.

“Corporate boards must become ESG-competent, know what questions to ask, and hold leadership accountable for ESG execution,” says Whelan, who leads NYU’s Stern Center for Sustainable Business. Her research found that just 6% of board members had any environmental or governance expertise at all; less than one-quarter had social credentials, such as diversity or healthcare experience. Liberty Mutual, for example, has no board members with climate experience, despite mounting claims across the insurance sector from climate-related floods, droughts, storms and wildfires. Drug distributor McKesson has no board members with ESG credentials even as it seeks to settle lawsuits over its role in the opioid crisis. A surprising exception: Dow Chemical, which has three members with strong environmental credentials on its 12-member board; seven are women or people of color. 

Keep reading, “Corporate boards are not leading companies where they need to go,” by Tensie Whelan on ImpactAlpha.

  • Black lives matter. Arjuna Capital is pushing resolutions to add board members with human and civil rights expertise at Facebook, Alphabet/Google and Twitter, which are in the middle of debates over disinformation, racism and hate speech.
  • Redefining materiality. The COVID crisis demonstrated how quickly issues once deemed non-financial can become highly material to corporate performance and society, say Datamaran’s Donato Calace and Novartis’ Denise Weger. Boards of directors “are best suited to lead materiality discussions” and take responsibility for the process, they write inRedefining materiality (again).”

Dealflow: Follow the Money

Amazon’s Climate Pledge Fund backs Infinium to produce net-zero ‘electrofuels.’ Sacramento-based Infinium makes “green hydrogen” from renewable electricity, combines it with waste carbon dioxide, and produces fuel with net-zero carbon emissions. The electrofuels can be used by today’s trucks, planes and ships. Amazon backed the company alongside AP Ventures, Mitsubishi, the Grantham Environmental Trust and others. Terms of the deal were not disclosed.

  • Two billion. Amazon’s climate fund is designed to support the e-commerce giant’s pledge to achieve carbon neutrality by 2040, a decade ahead of the goals announced by most other companies so far (see,Amazon’s $2 billion Climate Pledge Fund ups the ante”). A global climate strike by Amazon employees in 2019 spurred more ambitious action from Jeff Bezos (who announced Tuesday he will step down as CEO later this year).
  • More

Catalyst Fund backs six early-stage African fintech ventures. The accelerator supports emerging market entrepreneurs expanding access to basic goods and services. It committed £80,000 ($110,000) to six companies, five of them led by women. 

  • Fintech portfolio. The new cohort includes Nigerian retail banking platform Indicina, which helps individuals and small businesses secure loans; Kenya-based digital insurance startup Lami; and Ghanaian supply-chain financing startup Jetstream (see, “Catalyst Fund secures $4.3 million to accelerate digital commerce in Ghana”). Catalyst Fund’s portfolio of 37 companies have raised more than $122 million in follow-on funding.
  • Read on.

Dealflow overflow. Other investment news crossing our desks:

  • Elevar Equity and Global Founders Capital back Peruvian online grocer Favo. Favo connects local food vendors across Lima, Peru and São Paulo, Brazil with a growing base of online shoppers. Its $6.5 million Series A round will support the company’s launch in Mexico and Columbia.
  • Bamboo Capital raises €10 million for BLOC fund in Africa. The blended finance fund, a partnership with Smart Africa, launched two years ago to back African startups supporting digital inclusion in underserved communities. Bamboo secured backing from Luxembourg and Côte d’Ivoire for the targeted €100 million ($120 million) fund.
  • KTPL backs Ecotrace to bring transparency to Brazilian supply chains. São Paulo-based Ecotrace uses blockchain technology to track crops and livestock products. KTPL, also in São Paulo, invested 3 million reais ($560,000) through a fund it manages on behalf of the Brazilian Development Bank.

Podcast: The Reconstruction

Carmen Rojas on practicing truth in the service of freedom. As founder of The Workers Lab, Rojas led a nonprofit incubator and investor “building power for working people.” As president of the Seattle-based Marguerite Casey Foundation since 2019, she is seeking to be “a servant to leaders who are on the journey to be free.” On ImpactAlpha’s new podcast series, The Reconstruction, host Monique Aiken engages Rojas on the nature of such “servant leadership” – and of freedom, and truth. “It’s listening!” Rojas explains. “Listening to the people who have the greatest proximity to the pain, to the communities, to the policymaking, to the practices that are holding communities that have historically been marginalized back, as well as actively seeking to create and build a better future for us.”

As head of the $800 million foundation, Rojas says she has material freedom – access to resources – but also “positional freedom” – the freedom to tell the truth. Racial justice “is the point of the spear,” she says. A lingering misconception is that a rich and robust democracy will lead to racial justice. “That’s not true. Racial justice will lead to a rich and robust democracy.” She has been digging deeply into the period of radical Reconstruction after the Civil War. “I know we can be free. We have so many examples, snapshots, in our long history as the world of what breathing deeply feels like, of what stretching out fully means for our bodies, our communities.” In our own Reconstruction, she says, “I want to be a servant to the leaders who are on the journey to helping our community get free.”

Keep reading, and listen to “Carmen Rojas on practicing truth in the service of freedom,” the latest episode in ImpactAlpha’s new podcast series, The Reconstruction.

  • Welcome to The Reconstruction. Host Monique Aiken introduces the series and lays out some core principles of this Reconstruction in a brief audio clip. Tune in.
  • Catch up. In earlier episodes of The Reconstruction, Aiken engages 1863 Ventures’ Melissa Bradley and Gene Bruskin, creator of the historical musical, “The Moment Was Now.” Subscribe to The Reconstruction on Spotify or Anchor.
  • On the beat. Find episodes of The Reconstruction podcast, and all of ImpactAlpha’s coverage of racial justice and inclusive prosperity, on our new landing page.

Agents of Impact: Follow the Talent

Bill Caesar, ex- of WCA Waste Corporation, joins Generate Capital as operating partner for the waste-to-value division. Joining Generate’s board of directors are Revolution Foods’ Kristin Richmond and Susan Gonzalez, ex- of InterGen… The U.S. International Development Finance Corp. appoints David Marchick, ex- of Carlyle Group, as chief operating officer. Other new DFC appointees: Sarah Fandell as general counsel, Algene Sajery as vice president of external affairs, Kyle Murphy as senior advisor to the CEO, Michelle Czarniak as deputy chief of staff, and Alex Francés as special assistant to the CEO.

LLR Partners is hiring a diversity, equity and engagement lead in Philadelphia… The Collective Investment Group, in partnership with 17 Asset Management, is recruiting two investment professionals to lead and manage the inaugural Black Real Estate and Impact Fund.

Thank you for your impact.

– Feb, 3, 2021