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The Brief: ESG proxy fight, ocean equities, RSF backs Native CDFI, Bima’s microinsurance, Valor’s inclusion premium, #EmancipateTheVote



Greetings, Agents of Impact! 

Signals: Ahead of the Curve

Another rule from the Department of Labor, another attack on ESG investing. The U.S. Department of Labor is seeking to sharply curtail the ability of private sector retirement funds to engage companies on environmental, social and governance, or ESG, issues. The tipoff comes in a clause that permits pension plan fiduciaries to vote proxies in line with corporate management, while otherwise prohibiting votes on ‘non-pecuniary’ issues. “The Trump Department of Labor is trying to shield irresponsible corporate leaders from the consequences of their actions by undermining basic tenets of shareholder democracy and responsible corporate governance,” Majority Action’s Eli Kasargod-Staub said in a statement. The Labor Department said it is concerned fiduciaries “may be acting in ways that unwittingly allow plan assets to be used to support or pursue proxy proposals for environmental, social, or public policy agendas that have no connection to increasing the value of investments…”

The administration’s move bucks a clear market trend. The net inflow of nearly $21 billion into sustainable funds in the first six months of the year nearly matches the record total for all of last year, according to Morningstar. And the proposed rule, “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights,” comes after investors overwhelmingly opposed another rule proposed by the Labor Department to restrict ESG in retirement plans (see, “Investors find common cause in pushing back against Trump’s anti-ESG rules”). The Securities and Exchange Commission has proposed rules to make it harder for shareholders to file resolutions. The concerted attack by U.S. government agencies is in contrast to the establishment of ESG standards in Europe and elsewhere. “It would appear that the DOL and SEC are intent on dampening ESG investing, including by substantially eroding shareholder rights,” the U.S. Impact Investing Alliance’s Fran Seegull told ImpactAlpha. Core principles of transparency and accountability, “are being eroded to protect corporate managers from even the most basic forms of investor oversight.”

  • Register your opinion. Comments, identified by the Regulatory Identifier Number 1210-AB91, can be submitted to the Federal eRulemaking Portal at www.regulations.gov.
  • Share this post.

Dealflow: Follow the Money

Credit Suisse rolls out sustainable oceans equity fund. The Swiss bank is launching an investment fund this month to help clients invest in pollution prevention, the low-carbon transition and ocean conservation, Citywire Selector reports. The bank is partnering with Rockefeller Asset Management and the nonprofit The Ocean Foundation, which is helping define the fund’s impact and scope.

  • Offshore wind. The first investment from Rockefeller’s public equities oceans strategy was in Denmark’s Ørsted, one of the largest offshore wind farm companies in the world. “There are companies that are positioned to perform well when governments, investors and other entities take meaningful action to combat climate change, and I think we’re starting to see that,” Rockefeller’s Rolando Morillo told ImpactAlpha last year (see, With oceans in peril, investors find new ways to invest in the blue economy). 
  • Ocean of opportunity. Ocean-health investing ramped up this summer with the close of two $100 million-plus private investment funds from Mirova and S2G Ventures. Credit Suisse’s Marisa Drew told Citywire that more than one-third of institutional investors are interested in ocean-related investment opportunities.
  • Check it out.

RSF Social Finance backs loans for Native-owned agriculture businesses. Akiptan, a community development financial institution in South Dakota, launched last year to support Native-owned agriculture businesses that are shut out of most traditional commercial lending. The Native-led CDFI, has originated nearly $3 million in loans in 13 tribal nations. RSF Social Finance is providing Akiptan with a seven-year, $250,000 loan to on-lend to Native businesses. Akiptan’s borrowers include businesses like Sakari Farms, which is trying to revitalize native foods and plants; Akiptan’s loan helped Sakari purchase a greenhouse.

  • Access to finance. Akiptan and other CDFIs provide a small but growing pool of capital for Native-owned businesses of all types. The USDA’s Farm Service Agency’s credit program serves U.S.-based farmers, including Native-owned farms. But many Native farms and agribusinesses are too small for traditional lenders. They also struggle to access financing because of too few financial services firms operating on Native lands and other business hurdles (see, Overcoming obstacles to Navajo entrepreneurship). 
  • Institutional funding. In July, Candide Group helped Native American Natural Foods raise its first institutional funding round after 15 years in business (see, A Native food company’s commitment to social mission attracts investors at last).
  • Dig in.

BIMA raises $30 million to offer low-cost microinsurance. Stockholm-based BIMA provides mobile health, life and accident microinsurance to first-time customers. It has issued more than 35 million policies in Asia and Africa. COVID has spurred a surge in demand for its telehealth consultations and health policies. China-based fintech investor CreditEase Fintech Investment Fund led the funding round. Existing investors LeapFrog and Allianz also participated. Check it out

Kellogg Foundation backs Valor Ventures to boost ‘inclusion premium.’ “Startups that get inclusion right, and those who invest in them, position themselves to win outsize returns,” said Valor’s Lisa Calhoun. The $25 million second fund from the Atlanta-based venture firm has already invested in Physician360, Vital4 Technologies, LeaseQuery and Capway. Nine of 13 early-stage startups backed by Valor are led by women and people of color. The Georgia Tech Foundation joined as a limited partner. 

Upaya and Beyond Capital back FreshR to connect India’s farmers to markets. FreshR helps 200 meat and fish farmers in the eastern state of Odisha transport highly perishable goods to market. Upaya Social Ventures and Beyond Capital provided an undisclosed amount of funding to help the company to quadruple its network of farmers. 

Agents of Impact: Follow the Talent

#EmancipateTheVote. In a time of physical distancing, a new initiative from Monique Aiken and Anjali Deshmukh is socially connecting folks to fight voter suppression. #EmancipateTheVote is mobilizing voters for the upcoming U.S. election, online and in person, by connecting voting to joy and deeper personal purpose. Join the movement

Katherine Jollon Colsher, previously with Goldman Sachs, joins Girls Who Invest as CEO… Roksana Ciurysek-Gedir, ex- of Bank Pekao, will chair White Oak Global Advisors’ new impact advisory board… CareAcademy’s Helen Adeosun (an ImpactAlpha Agent of Impact) was named to Fortune’s 40 Under 40 List… Draper Richards Kaplan is recruiting a chief financial officer in the San Francisco/Menlo Park or Boston area… The Plug is looking for a director of research… Kapor Center is hiring a public relations director in Oakland… UNDP seeks an investment specialist in Cotonou, Benin… Skoll Foundation is looking for an analyst of portfolio and investments in Palo Alto, Calif.

The Interfaith Center on Corporate Responsibility is hosting “Empowering the People: Building Justice into our Clean Energy Future,” featuring Elizabeth Yeampierre of Uprose, Vonda Brunsting of the Initiative for Responsible Investment’s Just Transition project, and others, on Tuesday, Oct. 6… CASE at Duke’s i3 Consulting Practicum is looking for five to seven impact investing projects to match with MBA consultants… ANDE’s member satisfaction survey is live.

Thank you for reading.

–Sept. 9, 2020

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