The Brief | January 5, 2022

The Brief: ESG tap dance, fast-charging EVs, circularity in fashion, Kenyan fintech, sustainability-linked loans in India, inclusive future of work

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Greetings, Agents of Impact!

Featured: Institutional Impact

Long live ESG! ESG is dead! ESG is… stepping up? Among the most dramatic changes in finance to emerge from the COVID disruption was the spike in capital inflows to funds focused on environmental, social and governance performance and risks. But no sooner had ‘ESG’ arrived than it was assailed as a half-measure at best, if not a farce or a scam. The cool kids inserted ‘beyond’ before ESG in hopes of distancing themselves from a term that might have already reached its half-life. “Measuring, grading, ranking and tap-dancing is not a recipe for deep-seated change,” writes Imogen Rose-Smith in a reflection on her column, Institutional Impact. “To go beyond in 2022, we’ll need reliable measures, not just of policies and processes, but of actual outcomes and long-term value-creation.”

In more than a dozen Institutional Impact columns, Imogen has made it her business to puncture the bloviating and unwind the spin. In that regard, impact investing has made for a target-rich environment. Some of her greatest hits:

  • Toxic masculinity. One of her favorite columns called out impact investing, suggesting that the institutionalization of impact has resulted in an overabundance of rich white men at the top of the heap. Some, like TPG Rise Fund’s Bill McGlashan and Leon Black of Apollo (which launched a $1 billion-plus impact fund last July), found themselves in hot water.
  • Saudi Arabia. More in hope than expectation, she argued that sustainable investors should not go seeking money from Saudi Arabia and other sovereign wealth funds of countries with dubious track records on human rights and corporate governance. “That noble suggestion didn’t get much traction,” she says.
  • Split screen. Rose-Smith dug into the inconvenient truth that sometimes profits made by public and union pension funds might be undermining their own beneficiaries. “A booming real estate portfolio means rising housing prices,” she says, “pricing school teachers, firefighters, cops, and government workers out of home ownership in the communities in which they work.”

Keep reading, “Long live ESG! ESG is dead! ESG is…stepping up?” by Imogen Rose-Smith on ImpactAlpha. Catch up on all of Imogen’s Institutional Impact columns.

Dealflow: Climate Tech

Israel’s StoreDot secures $60 million for ‘extreme fast charging’ EV batteries. Tel Aviv-based StoreDot, launched in 2012, set out to prove its Li-ion battery technology can charge a vehicle in just five minutes. The first close of its planned $80 million Series D round was led by EV manufacturer VinFast, part of the Vietnamese conglomerate Vingroup. BP Ventures, an existing investor, also participated. StoreDot expects to scale-up mass production by 2024.

  • Faster charging. StoreDot’s Doron Myersdorf hopes ‘XFC’ batteries will help eliminate charging times as a barrier to EV ownership, “providing a 50% reduction, and, ultimately, helping us all achieve a zero-emissions, clean world.” VinFast will build manufacturing facilities for StoreDot to produce 300,000 batteries per year.
  • Plug in

Ambercycle scores $21.6 million to recycle textile waste. More than half of all garments are thrown out within a year. L.A.-based Ambercycle converts end-of-life textile waste into premium fabric for fashion industry partners. “The transition to circularity in fashion is inevitable,” said Ambercycle’s Shay Sethi. The Series A round was backed by KIRKBITemasek, Bestseller’s Invest FWDZolando and H&M Group. Ambercycle aims to reach commercial scale with brands such as H&M and Justin Mensinger.

  • Sustainable fashion. Evernu’s NuCycle process allows fashion and textile companies to disassemble materials to create new garments. The Renewal Workshop works with brands to renew existing products. Vaayu’s carbon-tracking platform helps fashion companies track and manage their carbon footprint.
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Dealflow overflow. Other investment news crossing our desks:

  • Capricorn’s Sustainable Investment Fund takes a 20% stake in Norselab, an Oslo-based European impact investment manager.
  • Kenyan fintech Paylend raises $2 million to expand financial access to small businesses in Kenya, Tanzania, Zambia and Nigeria.
  • Indian agriculture solutions company UPL raises the second tranche of a $700 million sustainability-linked loan. Interest costs can be reduced by up to 0.40% if sustainability metrics are met.

Signals: Return on Inclusion

Centering communities of color in the future of work. Growing up in Seattle, journalist Sherrell Dorsey was surrounded by engineers and technologies of all colors and creeds. In professional tech settings and in media, Dorsey found depictions of innovators to be very limited. “I had geniuses from all backgrounds around me all of the time,” Dorsey told ImpactAlpha on a podcast in October. “But those stories were not being told.” With her Black tech publication The Plug and in a new book, Upper Hand: The Future of Work for the Rest of Us, Dorsey is rewriting the narrative.

  • Untold stories. In Upper Hand, due out Thursday, Dorsey “reminds us of the many ways that Black and Brown folk have always pushed the cutting edge of technological innovation,” NYU’s Charlton Mcilwain writes in an endorsement. Dorsey and The Plug co-hosted ImpactAlpha‘s “Black tech, green solutions” call last fall.
  • Seat at the table. Backstage Capital’s Arlan Hamilton, an investor in The Plug, says Dorsey “has done the work to ensure Black and Brown voices are visible when we think about the future of business.” Upper Hand “centers communities of color in the future of work.”
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Agents of Impact: Follow the Talent

Sarah Bloom Raskin, former deputy secretary of the Treasury, has emerged as President Biden’s choice for vice chair of supervision at the Federal Reserve… Lauren Glickman, ex- of Renewcomm, joins Encore Renewable Energy as vice president of marketing… SJF Ventures is hiring an associate in Durham, a senior analyst based in San Francisco, and an analyst of portfolio acceleration in New York or Durham… 

Rockefeller Foundation is looking for an investment accounting manager in New York… Convergence seeks a senior advisor for Africa and one for Asia-Pacific. It’s also recruiting a director of market acceleration and design funding… High Water Women is hosting “Understanding Project Drawdown,” with Project Drawdown’s Jonathan Foley, Jan. 12.

Thank you for your impact.

– Jan. 5, 2022