Greetings, Agents of Impact!
Featured: Impact Voices
As votes are tallied, Agents of Impact begin to chart a new narrative. “The election results highlight just how divided our country has become and the roots of those divisions are often more about perception than actual differences,” shared George Ashton of Local Initiatives Support Corp. (see, “Why investing corporate cash to close racial wealth gaps can shore up long-term growth). “The income, wealth, education, and services gaps that we have been fighting for years have made for fertile ground for planting ideas of dissension and hate. So our work becomes that much more critical in spreading opportunity to every corner of this country so that Americans can come together and not be misled and divided so easily.”
- Leadership and governance. “No matter the outcome of the presidential election, there is wide open space right now for public companies to show visionary leadership – yes, for their shareholders – and by caring for all Americans, especially those most impacted by racial, economic and environmental inequities,” tweeted Adasina’s Rachel Robasciotti. “Whatever happens, I’m looking strongly at corporate leaders and institutions,” added The Plug’s Sherrell Dorsey. “How will you stand on the right side of history beyond a moment? How will your policies stand tall in support of representation and economic progress for all?”
- Local action and worker power. Nowak Metro Finance Lab’s Bruce Katz had a message for cities: “The federal cavalry is not coming at the scale needed/assumed; even greater imperative to get local act together, declare priorities, unlock capital, collaborate across sectors. In other words, #NewLocalism on steroids.” Biden ran on a $15 per hour minimum wage, support for unions and expanded healthcare, “and he is getting more votes than any presidential candidate in history,” tweeted the Rev. William Barber II. “Some say we are deeply divided, but if we focus on issues of life and lifting from the bottom, we can be more unified.” (See, “A minister’s call for moral, as well as economic, revival.”)
- What’s your take? What’s next for your work – and for you? Keep your insights coming. Send a few lines or a bit more to [email protected] or use this handy form.
Dealflow: Follow the Money
Charlotte investors commit $58 million to preserve affordable housing. The Housing Impact Fund, managed by Ascent Housing, will acquire and preserve 1,500 affordable units in gentrifying neighborhoods at risk of losing affordable housing. The fund is backed by $20 million from the Charlotte Housing Opportunity Investment Fund, a public-private impact fund managed by Local Initiatives Support Corp., and $15 million from Charlotte-based Truist Bank. Atrium Health, LendingTree, Movement Mortgage and local real estate firms also invested. Read on.
Climate Fund Managers and EOS Capital commit $60 million to sequester carbon in seaweed. The Dutch climate investor and the Namibian private equity firm are backing aquaculture venture Kelp Blue to build an off-shore kelp farm in Namibia to sequester carbon, restore marine health and create local jobs. Harvested kelp will be processed for textiles, food and fertilizer.
Wisconsin credit union teams up with Federal Home Loan Bank’s pandemic relief fund. Capital Credit Union is working with the Chicago bank’s $14 million Targeted Impact Fund to cut small but critical $5,000 checks to seven organizations providing social services in a state badly affected by the coronavirus. The Federal Home Loan Bank of Chicago launched its impact fund in August to extend COVID-relief grants of up to $20,000 to organizations serving low-income and Black and Latino communities in Illinois and Wisconsin.
Portugal’s knokcare raises €1.7 million to provide global telehealth consultations. The company, based in Porto, started in 2015 but has accelerated since the start of the pandemic. It serves more than 1.2 million patients in Europe, Latin America and Africa, including some of the hardest COVID-hit countries like Brazil and South Africa, EU Startups reports. Impact investor Mustard Seed MAZE and the Social Innovation Fund and several other investors backed the company, which plans to expand to India and Italy.
Signals: Ahead of the Curve
U.S. voters, local leaders and investors to Paris climate agreement: We’ll be back. Voters want climate action. So do investors. Joe Biden has a $2 trillion plan to put it in motion. “Today, the Trump Administration officially left the Paris Climate Agreement,” Biden tweeted last night. “And in exactly 77 days, a Biden Administration will rejoin it.” As Biden solidified a lead after clinching two crucial states on Wednesday, attention quickly turned to how the world’s largest economy and second-largest greenhouse gas emitter can reclaim leadership in the accelerating transition to a low-carbon future. A Fox News poll suggested 70% of Americans are very or somewhat concerned about climate change; 72% favor increased government spending on green and renewable energy. Blackrock joined U.S. and European investors representing $30 trillion in assets to call on the U.S. to quickly rejoin the Paris Agreement. Re-entering the agreement would send a critical policy signal, Stephanie Pfeifer of the Institutional Investors Group on Climate Change told Reuters, unlocking investor capital for sustainable growth and job creation.
- Getting back in. The U.S. is the only country to leave the global agreement reached in 2015. Biden has said he will re-enter the Paris accord “on Day One,” but the U.S. will have some reputational repair work to do and would be expected to announce even more ambitious plans than its previous 2025 goal of reducing emissions by 26% to 28% of 2005 levels. Reductions by then are tracking to between 20% and 27%, according to the Rhodium Group. Reaching net-zero emissions by 2050 – matching pledges from the European Union, Japan, South Korea and other countries – would require cuts of at least 7% per year, every year. And the U.S. would have to offer detailed and realistic plans to hit those goals.
- Green-tech opportunity. Investors are focused on the tens of trillions of dollars in investment opportunities in electrifying and decarbonizing the economy (here’s a handbook). In the first three quarters of 2020, global investors have poured $4.7 billion into battery storage, smart grids, and energy efficiency – almost double last year’s rate of investment (see, “Economics trump politics as the smart money bets big on clean electrification”). According to RethinkX, 100% clean electricity from solar, wind and batteries is “physically possible and economically affordable” across the U.S. and much of the world by 2030. “We see a clear path for the U.S. to embrace the electrification of everything despite this formal withdrawal,” said Rick Luebbe of Group14 Technologies, a battery materials producer. “We don’t think innovation will be derailed by the current administration’s decision to remove the U.S. from the climate accord.”
- Local action. In Denver, voters approved the use of $40 million in sales tax proceeds to reduce greenhouse gas emissions and air pollution. Austin’s voters raised property taxes to fund public transportation aimed at reducing carbon emissions. Even without federal leadership, states, cities and businesses are projected to cut greenhouse gas emissions by 19% from 2005 levels by 2025, and by more than one-third by 2030, according to America’s Pledge, the climate action group backed by former New York mayor Michael Bloomberg and former California Gov. Jerry Brown (see, “Fusing climate action and the SDGs to the COVID recovery”).
- Bipartisan support. Biden’s $2 trillion climate plan includes a national clean energy standard and a goal to reach net-zero in the power sector by 2035. Green energy can also be part of any stimulus package to spur economic recovery from the COVID recession. Opposition won’t disappear, but the U.S. election may have established a bipartisan mandate for climate action. The Rev. Mitchell Hescox of the Evangelical Environmental Network sees an opening for climate action even without a Blue Sweep. “Look for Democrats in both chambers to put forth a major stimulus package including clean energy, carbon reductions, plugging and clean-up of orphaned oil and gas wells, and provisions for a just transition and environmental justice,” Hescox told ImpactAlpha. The bipartisan Senate Climate Solutions Caucus is considering a fee on carbon pollution coupled with the distribution of dividends. “The majority opinion of U.S. citizens favors climate action, not only for the opportunity to secure a livable world for their children but also as the best way to rebuild the economy and accelerate job creation,” said David Miller of Clean Energy Ventures.
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Agents of Impact: Follow the Talent
Drew Tulchin, ex- of Meow Wolf, joins New Mexico Angels as president… Global Partnerships is hiring an investment director of its social venture fund in Nairobi… Rodney Sampson’s OHUB Foundation hosts the “Diversity, equity and inclusion solutions (DEIS) practicum” with Techstars’ Brad Feld, today, Nov. 5.
Thank you for reading.
–Nov. 5, 2020