The Brief | September 11, 2023

The Brief: Global reporting for US companies, infrastructure bond in Michigan, banking migrant workers in the Gulf, climate protesters raise the stakes

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Greetings, Agents of Impact! 

🤝 Meet up at the GIIN Impact Forum. Kick off the networking in Copenhagen with drinks with ImpactAlpha, Oxford’s Saïd Business School and Founders Factory Africa, Tuesday, Oct. 3, at the National Museum of Denmark’s Glass Hall. RSVP today.

Featured: Impact Management

How some US companies are preparing for mandatory impact reporting (Q&A). Markets around the globe are likely to require companies to report on their social and environmental impact before the end of the decade. Europe has led the push for mandatory corporate disclosure. The spillover already is reaching US companies that do business there, and the Securities and Exchange Commission is queuing up its own reporting regulations. Some companies are getting ahead of the regulatory curve. Roughly two-thirds of S&P 500 companies currently report against the standards of the Global Reporting Initiative, a transparency effort spun out of Ceres by activists and investors 26 years ago, following the Exxon Valdez oil spill in Prince William Sound, Alaska. “Those organizations in the US that are using GRI standards today are going to be in a much better position to be able to respond to these newly mandated policies that are coming in from overseas,” says GRI’s JB Hillman, who with colleague Matthew Rusk, spoke with ImpactAlpha about GRI’s US push and the evolving landscape of impact reporting.

The detailed GRI framework, now covering food security, biodiversity, human rights, as well as climate-related impacts and sustainable development, is among the most widely adopted organizational reporting standards, in use at some 10,000 companies in more than 100 countries. In the crowded space of sustainability reporting, the voluntary (vs. mandatory) GRI aims to serve multiple stakeholders (vs. just investors) and across national boundaries. Many reporting regimes prioritize “financial materiality,” for factors that drive enterprise value; GRI stands firmly behind “impact materiality,” for matters that affect the broader economy, environment and communities. The new standards from the International Sustainability Standards Board, for example, cater specifically to capital markets and investors, says Rusk. “That doesn’t necessarily account for systemic risk,” he says. “A lot of investors care about long-term value and risk and impacts on other stakeholders.”

Dealflow: Muni Impact

Michigan issues $1.2 billion in bonds to rebuild roads and bridges. Michigan Gov. Gretchen Whitmer’s $3.5 billion “Rebuilding Michigan” initiative aims to restore Michigan’s road and bridge system – and Michiganders’ safety and economic security. Just 38% of the state’s roads are rated as in “good” condition, while 24% are “poor,” and 11% of its bridges are “structurally deficient.” The state is looking to finance about a third of the program through a $1.2 billion bond issue, set to close Wednesday, Sept. 13, to pay for road and bridge repairs. HIP Investor gives the bond issue an impact rating of 55.8% on a 100 point scale, connoting “net positive,” writes HIP’s Srdana Pokrajac. ImpactAlpha is featuring the Michigan issue through our partnership with HIP Investor to highlight bond issues with social and/or environmental significance.

  • Pros and cons. HIP Investor evaluates the impact of road authorities across 16 material metrics. Given the poor state of its roads, Michigan scored negatively (40.5%) on “health” metrics. The energy efficiency of its transportation sector relative to other states earned it a positive rating on “earth” metrics. Overall, writes Pokrajac, “the state demonstrates higher performance in the risk and governance domains (greater than 60%), but it lags in performance when it comes to the resilience of its built and natural environment (less than 50%).”
  • Check out the bond’s details, and catch up on all of ImpactAlpha’s Muni Impact coverage.

myZoi clinches $14 million to support migrant workers in Gulf states. Abu Dhabi-based fintech venture myZoi has found a significant need in the oil-rich Gulf: financial inclusion for the region’s tens of millions of low-income migrant workers. Workers in the region send as much as 80% of their income back to their home countries. MyZoi provides a low-cost money transfer service. “Our drive is to make a meaningful difference not just in the lives of the underbanked, but their lifeline, which is their support network of families as well,” said myZOI’s Syed Muhammad Ali. The company was incubated within Standard Chartered Bank’s venture group, SC Ventures which, with SBI Holdings, backed myZoi to expand its financial services offerings. MyZoi has secured two licenses from the Central Bank of the UAE. 

  • Foreign majority. Migrant workers from Africa and South Asia account for 70% of employed workers in Gulf countries, and 95% in Qatar and the UAE. Most work in construction, service jobs or domestic work. The Gulf’s “kafala” worker sponsorship system is rife with human rights abuses and racial and gender discrimination, and was the subject of extensive reporting during the 2022 World Cup in Qatar.
  • Check it out.

Dealflow overflow. Other news crossing our desks:

  • Repsol will acquire ConnectGen from Quantum Capital for $768 million. The deal marks the Spanish oil giant’s entrypoint into the US onshore wind market. (Repsol)
  • EcoEnterprise Fund led a $4 million equity round for female-led Nuu, which makes “carbon-neutral” health food products made from cassava. (LatamList)
  • Agrifood impact investor Omnivore led a $3.5 million investment round for altM, a Bangalore-based biomaterials startup. It’s Omnivore’s first deal from its $150 million third fund. (Omnivore)
  • The venture arm of Brazilian petroleum product distributor Vibra reupped its investment in EZVolt, which is building a network ultra-fast EV chargers across Rio de Janeiro. (Startupi)

Signals: Climate Action

Climate protesters raise the stakes as climate action falters. Tomato soup on Vincent Van Gogh’s sunflowers. A blockade of Burning Man. In Queens, NY, this weekend, four climate protesters in “End Fossil Fuel” shirts delayed the start of the women’s final at the US Open tennis tournament by nearly an hour. “The ‘haves’ are not happy,” wrote Climate and Capital’s Peter McKillop. Activists feel they have little choice. Protestor Shayok Mukhopadhyay, who glued his bare feet to the ground, told Gothamist, “People have to understand… the disruption that I did is nothing compared to the disruption caused by the climate crisis.” The well-heeled crowd chanted, “Kick them out,” but Coco Gauff, the 19-year old American who won, was more forgiving. The match took place in 95-degree humid weather, amid what meteorologists have determined is the hottest summer on record. “One player is gonna die, and they’re gonna see,” Daniil Medvedev, who lost the men’s title to Novak Djokovic yesterday, said earlier in the tournament. 

  • Climate march. A UN progress report on global climate action in the seven years since the Paris climate agreement concluded that government and corporate actions have been woefully inadequate. “Climate breakdown has begun,” UN Secretary-General António Guterres said. Thousands are expected to turn out for next weekend’s March to End Fossil Fuels to kick off Climate Week NYC. “Every new fossil fuel project is incompatible with a livable future,” said Allie Rosenbluth of Oil Change International, one of the 500 climate groups backing the march. 
  • Tipping points. Nonviolent protests that engaged at least 3.5% of the population have never failed to bring about change, according to one study. Grassroots climate action groups such as Extinction Rebellion in the UK and the Sunrise Movement in the US have been more effective in reducing emissions than policy advocates and carbon offset organizations, according to an analysis by Social Change Lab. Such groups are underfunded. Just 3% of philanthropic human rights funding went to organizing efforts in 2019, and last year, just 1% of European climate-focused charitable funds went to such efforts.
  • More

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

Matthew Weatherley-White, ex- of Caprock Group, joins Align Impact as chief investment officer… Yasmine Shama, ex- of TPG, joins Quona Capital as head of investor relations… Surdna Foundation is hiring a program associate for its sustainable environments program… Altree seeks an Africa-based senior investment analyst for its gender and climate fund.

Applications are open for next year’s ImpactAssets 50 fund manager showcase… Goldman Sachs is accepting applications from small businesses in South Dakota and Missouri for its $100 million small businesses initiative… Register to join the HI-HERImpact Pitch Competition in Detroit, backed by 1863 Ventures and Ford Motor Company Fund, Thursday, Sept. 28.

👉 View (or post!) more impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Sept. 11, 2023