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Featured: Institutional Impact
GOP ditches ‘pro-business’ with attacks on ESG that hurt corporations and investors – and red states. The new Republican majority in the U.S. House of Representatives is promising to make combating ESG a top priority, at least after they’re done with Hunter Biden. Republicans’ stance on ESG has flipped the script on the relationship between the GOP and business, and between ESG and U.S. corporations, ImpactAlpha contributing editor Imogen Rose-Smith writes in her latest Institutional Impact column. “Being ‘anti-corporate’ used to be the province of the left. But the GOP’s ‘culture wars’ agenda is putting it at odds with core members of the very business communities they are supposedly so supportive of,” she writes. “‘Anti-woke’ is often really really bad business.”
In the early days of the responsible investment movement, activists tried to get companies to stop doing things that were arguably money makers, such as doing business in apartheid South Africa or using slave labor. Now, Rose-Smith says, “sustainable investors want businesses to start doing things that make money – for example by reducing waste, increasing resiliency, attracting diverse talent, or appealing to changing consumer tastes.” The stalwart corporate lobbyists at the U.S. Chamber of Commerce ran afoul of the new Republican orthodoxy by suggesting that climate change and carbon emissions were worthy of consideration by retirement managers. Walt Disney Co. lost its special tax status in Florida after, belatedly, speaking out against that state’s “Don’t Say Gay” bill – but may soon get it back after legislators realized the state was losing jobs and tax revenues. “The new paradigm puts ESG investors in the curious position of being pro-business and pro-innovation,” Rose-Smith writes. “The realignment has its own dangers and contradictions. But if those are the cards the MAGA grandstanders are dealing, let’s play them for real progress for workers, communities and the planet.”
- Keep reading, “GOP ditches its pro-business stance with an attack on ESG that hurts corporations, investors – and red states,” by Imogen Rose-Smith on ImpactAlpha. Catch up on all of Imogen’s Institutional Impact columns.
Dealflow: Waste To Value
Generate bets on Sedron Technologies’ municipal wastewater treatment. Generate Capital, the San Francisco-based sustainable infrastructure financier and operator, launched Generate Upcycle last year to expand into recycling, composting, wastewater treatment and other waste-to-value solutions. Generate Upcycle is backing Sedron’s “Varcor” technology, which uses “mechanical vapor recompression” to treat municipal sewage sludge to produce clean (but non-potable) water and sustainable nitrogen fertilizer for a new municipal wastewater facility in Washington state. The facility will use the Varcor system to treat up to 300 million pounds of sewage sludge from the Seattle metropolitan area.
- How it works. Varcor’s machine separates sewage sludge liquids from solids. Vapor is compressed to produce water and ammonia that, when converted into ammonium nitrate, can be used as a green nitrogen fertilizer. The technology lowers disposal costs and “enables liquid waste generators to sustainably manage material in a way that significantly reduces greenhouse gas emissions and simultaneously creates high-value products that can be used in different applications,” Generate’s Bill Caesar told ImpactAlpha.
- Upcycling waste. Caesar said the partners are building another wastewater treatment facility near a large dairy farm. “Together, we are helping cities across the U.S. turn sewage into valuable resources through a fully circular process,” said Sedron’s Peter Janicki.
- Dive in.
Pakam raises pre-seed funding to improve waste recycling in Nigeria. Africa has an outsized waste problem. Less than 5% of the continent’s waste gets recycled, far short of the African Union’s goal of 50%. Many African countries are a dumping ground for plastic and other waste from wealthier countries, including the U.S. Lagos-based Pakam’s platform connects households, businesses and municipalities to collectors and recyclers of plastic, cans, wood and other recyclable materials. Individuals can schedule as little as two pounds of recyclable household waste for pick-up or search for drop-off sites. For cities, the company provides software for managing smart bins and trucks, and helps integrate informal “waste pickers,” who collect and sort recyclable material from open landfills.
- Early investment. Pakam’s $635,000 in pre-seed funding will help it expand beyond Lagos. The company is also considering e-waste services. Pakam did not disclose the names of its investors.
- Check it out.
Dealflow overflow. Other investment news crossing our desks:
- Mumbai-based Jupiter raised $12.1 million in venture debt from Alteria Capital to allow workers in India to access wages as they earn them, rather than waiting for weekly or monthly paydays.
- The Emerging Africa Infrastructure Fund invested €25 million ($26.8 million) to Ivoire Hydro Energy to develop and construct a 44-megawatt hydropower plant in Côte d’Ivoire.
- Prime Capital Investment Advisors acquired Earth Equity Advisors, a registered investment advisor and B Corp. that offers fossil fuel-free investment portfolios.
- Apex Group, Mosaic Insurance and Aon are partnering on an insurance product for fund managers that offers better premiums when managers improve their ESG performance.
Impact Voices: Stakeholder Capitalism
A human rights approach in impact investing. Enough with the box-ticking exercises. A comprehensive human rights approach, aligned with U.N. Guiding Principles on Business and Human Rights investment practices, centers investment decisions and outcomes on people and their communities. “Community-driven solutions are often the best solutions,” write Kate Finn of First Peoples Worldwide, Mary Beth Gallagher of Domini Impact Investments, and BSR’s Kindra Mohr in a guest post on ImpactAlpha. “Communities and individuals closest to a situation are most aware of risks and opportunities and are key to helping work toward positive outcomes.” The Fair Food Program’sworker-driven social responsibility efforts, for example, have enabled reduced sexual harassment, forced labor and wage theft in the tomato supply chain through worker-to-worker education and accessible grievance mechanisms.
- Stakeholder engagement. The approach embeds respect for human rights across a business’s operations and value chains and relies on human rights due diligence and access to remedies when harm occurs. Media, civil society and investors are increasingly calling on companies to account for human rights risks and impacts within their operations and business relationships.
- Rights and wrongs. Human rights standards can include respect for workers’ right to organize or equitable access to products free from discrimination. Investors can also seek opportunities to incorporate insights and perspectives from stakeholders and rights holders. Say the authors, “To understand how a policy or commitment works in practice often requires perspectives from those who are closest to the activity.”
- Keep reading, “A human rights approach in impact investing,” by Kate Finn, Mary Beth Gallagher and Kindra Mohr on ImpactAlpha.
Agents of Impact: Follow the Talent
Impact Engine is recruiting a director of investor relations, an investment analyst, and a finance and operations analyst in Chicago… Grounded Capital is hiring a director of talent and a vice president of real estate asset management… Rally Assets seeks an impact reporting associate and a portfolio administrator in Toronto… Propel is recruiting an operations and finance associate in New York… The Stockholm Environment Institute is hiring an eastern partnership countries project manager, a sustainable finance expert, and a Western Balkans project coordinator in Sweden.
Near East Foundationseeks a senior program officer in Syracuse, N.Y… The World Resources Institute is looking for a communications and engagement specialist for its land and carbon lab and a greenhouse gas protocol learning program lead… In D.C., the U.S. Economic Development Administrationhas an opening for a management and program analyst, the U.S. Department of Energy’s solar energy technologies office is looking for two systems integration technology managers, and the World Bankis looking for a financial sector analyst.
Sustainable Energy for All is hiring a head of finance… The Australian Communities Foundation is looking for a chief operating officer, ideally in Melbourne or Sydney… CBM Global Disability Inclusion has openings for a program coordinator, a program finance officer for Nepal, and an inclusive eye health advisor… OFN is soliciting session proposals for its 2023 Connect+ and Small Business Finance forums, which are being held on March 21. Submissions are due by January 31.
Thank you for your impact.
– Jan. 11, 2023