The Brief | September 21, 2023

The Brief: Climate Week’s brighter outlook, naming rules for ESG funds, European climate tech VC, impact notes, messiness and mutuality in measurement

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Greetings, Agents of Impact! 

🎙️ Sign up for next week’s Call: The employee-ownership edge. Companies prosper when workers benefit from the value they add. A growing set of fund managers are stepping up to finance companies’ conversions to employee ownership. Smitha Das of World Education Services has built an ownership portfolio. She will join Apis & Heritage’s Todd Leverette, Mosaic Capital Partners’ Ian Mohler, Common Trust’s Zoe Schlag, Ownership Works’ Anna-Lisa Miller and other Agents of Impact, to discuss investment opportunities in employee ownership, Wednesday, Sept. 27, at 10am PT / 1pm ET / 6pm London. RSVP today.  

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Featured: Climate Action 

In the Climate Week mix: Policy tailwinds, green banks, talent pipeline. Hard choices have to be made… about which of the hundreds of Climate Week NYC events to attend. As the rain gave way to sunny skies, so did the gloomy outlook from the United Nations and its less-than-ambitious Climate Ambition Summit. The brighter outlook was palpable all over town among the entrepreneurs, investors, policymakers and experts chomping at the bit to drive the zero-carbon transition. 

  • Political risk. No sooner has historic Inflation Reduction Act and infrastructure-bill funding started flowing than worries have emerged about a rollback in the event of a Republican win in 2024. Not so fast, some experts said. The laws were written specifically to make them hard to rewind, and have since been politics-proofed: the bulk of the factories and jobs are being created in red, or Republican-led, states. In Texas and elsewhere, even Republicans realize renewables are just good business, even without new subsidies (see, “Don’t mess with Texas’s lead in the low-carbon energy transition”). “We’re making more money in sustainability than people are making on unsustainability,” Generate Capital’s Scott Jacobs told ImpactAlpha.
  • Green banking competition. Connecticut’s green bank, one of the nation’s oldest, provides a glimpse into what’s possible once the IRA’s Greenhouse Gas Reduction Fund is up and running. Last month, the Connecticut bank, with ImpactAssets and Inclusive Prosperity Capital, lent PosiGen $12 million to install rooftop solar panels and energy efficiency upgrades for low-income households. The Green Bank Network and the Natural Resources Defense Council convened erstwhile competitors to rally collaborative approaches for the $27 billion green bank fund (see, “Managers vie for the mandate to stand up a national green bank”). “If we’re going to equitably reach our climate goals, we can’t work in silos,” said NRDC’s Adam Ken at the event.
  • Talent pipeline. A new “climate corps” launched by the Biden administration could make at least a minor dent in the skills shortage that is threatening the full deployment of IRA funding. The IRA has already created some 170,000 jobs, but a skills gap is holding back more hiring. “Increasing demand for green skills is far outpacing the supply,” said LinkedIn’s Tammy Erickson at an event hosted by Elemental Excelerator. The new American Climate Corps invests in job training and aims to put more than 20,000 Americans to work in green jobs, including 13,000 participants in pre-apprenticeship readiness programs organized by the non-profit TradesFutures. EDICT, an internship program led by Clean Energy Leadership Institute, Elemental Excelerator, and FutureMap, is helping to diversify the talent pipeline for green jobs. 

Dealflow: Climate Tech

European Investment Fund plugs €40 million into Blume Equity. Blume is one of a small number of climate tech venture funds with all female founders. The firm invests in growth-stage companies in Europe supporting the transition to a low-carbon economy, such as carbon accounting venture Normative, which helps large companies account for Scope 1, 2 and 3 emissions, and Aerones, which makes robotics for wind turbine maintenance. EIF backed Blume as part of its commitment to direct a quarter of its investments to climate and environment-related projects. It joins Swedish pension fund AP4, Visa Foundation, and Impact Engine as an investor in Blume.

  • Climate tech appetite. Funding for climate tech in Europe, as globally, has taken a hit in the tech downturn. But it still accounts for nearly one-quarter of all European venture funding. Outside of electrification and renewable energy, investors have backed companies supporting home energy efficiency and a greener built environment. Last week, Berlin-based World Fund raised €50 million for its early and growth-stage climate tech fund.
  • Check it out

Dealflow overflow. Other deals crossing our desks:

Signals: Impact Management

Messiness, mutuality and methodology: Three tips for measuring impact. The impact investing advisory firm Candide has moved more than $200 million into 110 social justice-focused companies, funds and other organizations. Its investments include ventures like Totem and Solar Holler and managers like Impact America Fund and Mac Venture Capital. What was the actual impact of those impact investments? Candide’s Jasmine Rashid and team spent the last two years seeking answers to that question for the firm’s first public impact report. In a guest post for ImpactAlpha, Rashid shares tips for designing meaningful impact measurement processes “that serve all stakeholders – not just those providing financial capital.” Among them:

  • Embrace messiness. No single investee solution is “better” than another, says Rashid. Bringing solar power and energy to Indian Country. Expanding homeownership to build generational wealth. Building worker-owner opportunities. “All are needed to transform our society,” she writes. Instead of leaning on a single impact metrics framework, Candide let respondents identify the dimensions of impact unique to them. “They know their impact best,” says Rashid. “We’re just here to bring visibility to it and support when called upon.”
  • Center mutuality. As the intermediary between investors and investees, Candide aims to challenge traditional power dynamics. “Impact measurement is an opportunity to interrogate impact investing practices from all angles and is critical to how we hold ourselves accountable to communities,” she says. Rashid created a tailored one-page impact synopsis for each investee, “which they were then welcome to use in their data rooms, with other investors, or wherever they might find it useful.”

Agents of Impact: Follow the Talent

Agents of Impact are remembering and paying tribute to catalyst-at-large Suzanne Biegel, who passed away yesterday. A champion of gender-lens investing and founder of GenderSmart (now part of 2X Global) Biegel created a legacy project, Heading for Change, with her husband, Daniel Maskit (for background see, “With climate + gender fund, Suzanne Biegel is heading for change“).

Daniel Barker, managing director of Halcyon Incubator, will replace Kate Goodall as Halcyon’s CEO. Goodall and chief investment officer Dahna Goldstein are leaving in January to co-manage a new fund… Kristi Cunningham Whitfield, ex- of the DC Department of Small and Local Business Development, will join Nathan Cummings Foundation as its chief impact officer and director of racial justice.

The Beacon Fund is hiring a social impact officer in Denver… ImpactAssets is recruiting a senior accounting manager or controller… The Robert Wood Johnson Foundation seeks a healthy communities deputy director in Princeton, NJ… Convergence is looking for a Toronto-based senior associate for design funding and market acceleration.

AXA Investment Managers has an opening for a real assets responsible investing intern… Quona Capital is on the hunt for an investment associate in Singapore… Native Women Lead’s Growth Capital Summit will host impact investors and Indigenous women founders in San Francisco, Oct. 2-4. 

👉 NEW: View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Sept. 21, 2023