Greetings, Agents of Impact!
Signals: Ahead of the Curve
With climate goals looming, gap grows between fossil fuel leaders and laggards. Cutting to the chase: European oil and gas majors are leaving their North American counterparts behind. Total, Galp Energia, Equinor, BP and Shell are best prepared for the transition to a net-zero world, according to a new analysis of 39 global oil and gas companies. Those five account for 51% of renewable energy assets among the firms. Lagging: U.S. producers Chevron and ExxonMobil. One indicator of better preparedness is climate risk disclosures. The analysis, by Bloomberg’s NEF and Intelligence units, comes with a caveat: Most oil and gas companies are still spending heavily on expanding fossil fuel production. BP is one firm that’s cutting back on such expenditures. “The transition is an opportunity for us to take on the next chapter in our company’s history,” BP’s Bernard Looney said at this week’s Ceres 2021 conference.
- Financial enablers. Banks continue to finance fossil fuel expansion despite pledges to green their portfolios (see, “JPMorgan Chase will align financing strategy with Paris Agreement”). Fossil fuel financing fell 9% in 2020, as the pandemic cratered demand, according to an annual ranking of bank financing led by the Rainforest Action Network. Still, financing levels were higher than in 2016, when global leaders agreed to reduce carbon emissions by at least 2% by midcentury. Before plummeting, the first six months of 2020 saw more fossil fuel funding than any half-year since the Paris Agreement, notes the report, “Banking on Climate Chaos.”
- Mixed record. J.P. Morgan, the world’s largest bank, cut its fossil fuel funding by 20% to $51 billion in 2020, but remains the largest funder of the sector. The bank increased its funding of the top majors that are continuing to expand drilling and production to $31 billion in 2020, from $28 billion the year before, and tripled financing for Exxon to $7.5 billion. Wells Fargo slashed fossil fuel funding by 42%. “What matters most is what they’re doing,” said Ben Cushing of the Sierra Club, which contributed to the report. “Big banks don’t deserve a pat on the back if their 2050 pledges are not paired with meaningful 2021 actions to cut fossil fuels financing.”
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Spurred by stimulus checks, guaranteed income gains steam as an anti-poverty policy. Dozens of mayors across the U.S. have committed to piloting guaranteed income programs that put regular, no-strings-attached cash payments into the hands of low-income residents. The programs, some launched pre-pandemic, are finding new acceptance as direct checks and unemployment payments became popular signature policies of the bipartisan response to COVID-19.
- The latest. Oakland will launch a guaranteed income pilot this spring with 600 Black, Indigenous or other families of color. Families in the program must have at least one child and make less than the area medium wage, or $59,000. Each will receive $500 monthly payments. “Poverty is not a personal failure, it is a policy failure,” says Oakland Mayor Libby Schaaf.
- Evidence base. The Oakland program comes on the heels of positive results out of a similar pilot in Stockton, Calif., just 70 miles east of Oakland. Residents that received monthly checks from the first-of-its-kind program, launched by then-Mayor Michael Tubbs in 2017, were more likely to find full-time employment, be financially stable and improve overall well-being, according to a study released last month. In Jackson, Miss., a guaranteed income program designed by Black moms for Black moms is also showing early positive results, according to a Next City report.
- National ambitions. Oakland’s Schaaf is a founding member of Mayors for a Guaranteed Income, a coalition founded by Tubbs. The goal: not to expand the policy at the local level, but to build an evidence base and pressure the federal government to adopt the policy nationally. Schaaf, whose program is backed by private foundations, told the Washington Post, “The federal government is the only one that can provide an entitlement to meet whatever need there is.”
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Dealflow: Follow the Money
Flutterwave backs Lagos fintech Bankly to bring cash-dependent consumers online. This month Flutterwave secured unicorn status with a $170 million funding round. The Nigerian digital payments company is using some of that capital to bring the country’s unbanked consumers online. Lagos-based Bankly is introducing cash-based consumers to digital finance through a hybrid brick-and-mortar/online financial services business. Flutterwave led the woman-run company’s seed round alongside Nigeria-based Vault. Plug and Play Ventures, Rising Tide Africa and Chrysalis Capital also participated.
- Agents of impact. Bankly relies on a network of 15,000 local agents that run physical cash-in-and-out points that allow customers to deposit and withdraw their money any time. It gradually encourages more online transactions, like buying mobile airtime and making payments. The company wants to reach two million unbanked Nigerians in the next three years.
- Cash economy. Fintech companies have been vacuuming up venture capital funding and rapidly scaling the pace of digital finance across Africa (see, “Seed-stage is a bright spot as emerging market investors bet on the digital disruption”). The opportunity remains largely untapped. In Nigeria, the continent’s biggest market, cash is still used for 95% of transactions. “Our goal has always been to reach the last mile using a fast-moving consumer strategy,” said Bankly’s Tomilola Adejana.
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Laerdal’s Millions Lives Fund turns to medical tech to close healthcare equity gaps. The Laerdal family and its Norwegian operating companies, Laerdal Medical and Laerdal Global Health, want to help save one million lives across the globe each year by 2030, particularly during birth in low- and middle-income countries. The entities are standing up a $100 million venture capital fund to back technology companies improving healthcare access and education on a global scale. The vehicle will make investments ranging from $1 to $10 million in 15 to 20 companies.
- Medical tech. The Million Lives Fund has already backed Aloe Care Health, a voice-activated medical device for the elderly; Rapid SOS, an emergency response platform that provides data to first responders; Israeli artificial intelligence startup Mobile ODT, an early cervical cancer detection technology; and Avive, whose low-cost automated external defibrillator can help with sudden cardiac arrests.
- More.
Dealflow overflow. Other investment news crossing our desks:
- Qatar Investment Authority leads plant-based egg producer Eat Just’s $200 million round.
- Utility e-bike maker and delivery startup URB-E raises $5 million, backed by UBS and AgFunder.
- Bangalore-based Velocity raises $10.3 million to scale up revenue-based financing for India’s startups and small and mid-size businesses.
- Latvia-based Jeff App clinches $1 million to expand financial inclusion in Asia.
Fund news. Headlines on who’s raised, and who’s raising:
- New York’s BBG Ventures closes $50 million third fund to back women-led consumer startups.
- South Africa’s RisCura launches a series of impact fund-of-funds to back national and global development goals.
- Uncommon Giving launches $50 million crowdraise to expand charitable giving platform.
Agents of Impact: Follow the Talent
Eric Cooperström, ex- of NatureVest, joins Hancock Natural Resources Group, a subsidiary of Manulife Investment Management, as managing director of impact investing and natural climate solutions… William Byun, ex- of Conchubar Group’s Asia Renewables, joins Oxford GAV Conservation Venture Studio as a partner… Daniel Zotos, previously with the Alzheimer’s Association, joins The Zero Emission Transportation Association as communications director… J.P Morgan’s International Private Banking is looking for a head of sustainable investing in London.
Andreessen Horowitz seeks a network engagement partner for its Cultural Leadership Fund in Menlo Park, Calif… Kapor Capital is recruiting a partner/chief administrative officer in Oakland… Tideline is hiring a short-term impact investing associate in San Francisco… US SIF is accepting applications for undergraduate or graduate student scholarships to attend US SIF Forum 2021… Natural Investments is hosting “Black Economic Self-Determination: To Move Forward We Must Understand The Past,” with historian and scholar Ed Whitfield, Wednesday, Mar. 31… The American Sustainable Business Council and Social Venture Circle host their 2021 Spring Conference April 19-21.
Thank you for your impact.
– Mar. 25, 2021
