Greetings, Agents of Impact!
Featured: Capitalism Reimagined
On anniversary of Capitol attack, stakeholders seek to hold corporations accountable for democracy. At least since a mob of supporters of Donald Trump stormed the Capitol to obstruct the peaceful transfer of power, the threat to the U.S. democratic system has become a material risk for corporations. The anniversary of the January 6 attack is shining a light on how corporations are managing that risk. “We’re using the January 6 anniversary to put corporations like Home Depot, Wells Fargo and Chevron on notice that we will not let them threaten the long term savings and investments of workers and endanger democracy,” said Alphonso Mayfield of the Service Employees International Union. SEIU is working with Majority Action, the nonprofit shareholder advocacy group, to rally a coalition to push corporations to disclose their lobbying and political activities. Holding the key to such efforts are the largest asset managers, starting with BlackRock, Vanguard and Fidelity, which together control 25% of shareholder votes at companies represented in the S&P 500.
In the immediate aftermath of the Jan. 6 attack, more than a hundred major corporations pledged to pause contributions to politicians and groups that supported the insurrection, including the 147 members of Congress who objected to the certification of President Joe Biden’s election victory. Eli Lilly, PriceWaterhouseCoopers, and American Airlines are among the 58 companies that have resumed direct contributions to those legislators, according to Judd Legum at Popular Information, who is tracking the political contributions. Majority Action is readying shareholder resolutions for this spring’s annual general meetings at Exelon, Charter Communications, Eli Lilly and GEO Group, among others, demanding an accounting for political spending and lobbying that is often in conflict with their stated values. The effort to hold corporations accountable is a test for an emergent “multi-movement engine” of shareholders and other stakeholders. That the threat to fair elections and the rule of law is far from over, says Majority Action’s Eli Kasargod-Staub, “causes a level of risk for investors that goes above and beyond the need for transparency.”
Keep reading, “On anniversary of Capitol attack, stakeholders seek to hold corporations accountable for democracy,” by Amy Cortese on ImpactAlpha.com.
Dealflow: Investing in Health
Ghanaian pharmacy venture mPharma raises $35 million to expand drug access in Africa. The Accra-based company, launched in 2013, has partnered with more than 155 hospitals, 850 pharmacies to deliver telehealth services and medicine for over 2 million patients in Nigeria, Kenya, Zambia, Malawi, Rwanda, Gabon and Ethiopia. mPharma worked with partners to provide financing for patients in low-income communities who can’t afford drugs. The company participated in Morgan Stanley’s Sustainable Solutions Collaborative last year.
- African expansion. Investors including Social Capital, Novastar and Lux Capital Management provided $30 million of equity. Citigroup provided a $5 million loan. The Series D financing will support mPharma’s expansion in West and East Africa, said founder Gregory Rockson, as well as “make one or two acquisitions to strengthen our presence on the continent.” It will also build data infrastructure and roll out an e-commerce platform for pharmaceuticals. Check it out.
Cottonwood Technology Fund raises $75 million for deeptech impact. The Santa Fe, N.M.-based impact venture fund received backing from more than 40 new LPs from the U.S. and Europe, including investors from its predecessor fund Merrion Family Office, Caterpillar Ventures, KPN Ventures and the State of New Mexico. Cottonwood provides early funding for companies developing technology for sustainable energy, medtech, nanotech and advanced materials and manufacturing.
- Early deals. New investments include Albuquerque, N.M.-based mPower Technology, which is developing “micro” solar cells; and The Netherlands’ Sencure, which makes wearable biometric sensing chips to monitor patients’ health. Follow-on investments include electric motor developer Infinitum Electric and modular hydrogen storage company BayoTech. Share this post.
Carbon recycler LanzaTech is looking to go public. The woman-led company captures industrial carbon emissions and converts it into sustainable fuel and chemicals to make materials such as textile, rubber and packaging. It has partnerships with Lululemon, Zara, Unilever and L’Oreal Paris, among other brands, to manufacture products made from recycled carbon. LanzaTech has raised more than $550 million to date. “Now that we’ve commercialized, it’s time to really enter the public markets,” LanzaTech’s Jennifer Holmgren said in an interview with Cipher. “That’s the best way to help diffuse the technology.”
- Re-use. LanzaTech helped Unilever make detergent products from carbon captured in China, South Africa and Germany, according to Unilever’s Jonathan Hague. LanzaJet, the company’s sustainable aviation fuel business, expects to open a production facility in Georgia next year, backed by a $14 million grant from the U.S. Department of Energy. Onward.
Dealflow overflow. Other investment news crossing our desks:
- PosiGen raises $100 million to close the clean energy affordability gap for low- and middle-income homeowners. The round was led by Magnetar Capital’s Energy & Infrastructure.
- Udaan, a Bengaluru-based B2B enterprise tech startup for small Indian merchants, secures $200 million via a convertible note and $50 million in debt.
- San Francisco-based EV fast-charging startup ChargeNet scores $6.2 million in seed funding led by impact advisory firm Aligned Climate Capital.
Impact Voices: Climate Finance
Accelerating innovative finance to address climate inequality. Jacqueline Novogratz, the founder and CEO of Acumen, is taking impact investors to task for prioritizing returns over impact. “They have failed to serve the hardest to reach markets and those that are most in need of such investment,” she writes in a guest post on ImpactAlpha. Even as record sums of investor capital flowed to climate solutions last year, developed countries received $60 billion more in clean energy investments than developing countries, where clean energy investments actually fell 10%. “It’s clear we need a new approach to financing clean energy in these markets,” Novogratz says.
- The upside. Creative financial instruments are proving out models in off-grid energy, sustainable agriculture, income-generating energy-efficient appliances and other pathways to a new green economy, says Novogratz. Aceli Africa, for example, mitigates risks and boosts the returns for lenders to the least-served and most impactful African agribusinesses. Global Innovation Lab for Climate Finance has launched 55 financial instruments, including offtake agreements, guarantee funds and blended finance vehicles, that have collectively mobilized over $2.5 billion for emerging markets since it launched in 2014.
- All hands on deck. Novogratz says impact investors must ensure that capital and resources don’t just go to the safest investments. That will require adoption of innovative financing models designed specifically for the hardest to reach markets. COP26 was a step in the right direction, says Novogratz. “What remains to be seen is whether there is the collective will to turn the increased focus on centering the poor in solutions to climate change into action that makes a difference.”
Keep reading, “To address climate inequality, we need innovative finance solutions,” by Acumen’s Jacqueline Novogratz on ImpactAlpha.com.
Agents of Impact: Follow the Talent
Nyala Venture is looking for a co-lead in Nairobi… Draper Richards Kaplan Foundation is hiring an associate and analyst in Boston or Menlo Park… Tennison Group seeks an investment analyst of ESG/impact investing in Denver.
Thank you for your impact.
– Jan. 6, 2022