Greetings, Agents of Impact!
Making the mark in impact management. ImpactAlpha and Tideline will convene Agents of Impact Call No. 15 to explore best practices and common challenges in impact management and verification. Join The Call tomorrow, Thursday April 23, at 9am PT / 12pm ET / 5pm London. RSVP today.
Survey of emerging markets capital managers. Local providers of equity and debt capital in emerging markets have become “economic first responders” for small and growing businesses reeling from the effects of the COVID-19 pandemic. In partnership with the Collaborative for Frontier Finance, ImpactAlpha is seeking survey responses from such capital managers (by April 27) to better understand challenges and solutions for the businesses they support. Have your say.
Featured: ImpactAlpha Original
Green swans and the new economic order: An Earth Day conversation with John Elkington. Whether or not the COVID-19 crisis qualifies as a “black swan” – global pandemics have been widely predicted for years – it is the kind of highly disruptive event that can enable radically new solutions and systems to emerge. Such “green swans” can “deliver exponential progress in the form of economic, social and environmental wealth creation,” writes Volans’ John Elkington in his new book, Green Swans: The Coming Boom in Regenerative Capitalism. The COVID-19 pandemic “will catalyze extraordinary shifts in the structure of our economy and the nature of the technologies that are used,” Elkington told ImpactAlpha in a wide-ranging interview. A bevy of green swans were already on their way. Wind and solar, with their falling cost curves. Batteries to store the energy they produce. Electric vehicles. Artificial intelligence and machine learning. Lab-grown and plant-based protein. Another green swan: impact investing, which Elkington calls an intriguing phenomenon with building momentum, but cautions, “The gap between where we are and where we need to be is vast.”
Elkington has been trying to bridge that gap for decades, as a co-founder of Environmental Data Services and SustainAbility and author of 20 books. He coined the term “triple bottom line” in 1994 – and two years ago sought to “recall” it because he thinks it lets CEOs off too easy. Elkington is convinced that real systemic change cannot happen without government and financial leadership on a global scale. Global warming, in particular, will require 21st century mechanisms of global governance. “The next 10 to 15 years are going to be by far the most exciting, challenging and dangerous years,” says Elkington. “Suddenly, the stuff we’ve been talking about for years is increasingly evident to people. We’ve all got to come out of our bunkers and silos and learn how to work together in very different ways.”
Keep reading, “Green swans and the new economic order: An Earth Day conversation with John Elkington,” by Amy Cortese on ImpactAlpha.
Dealflow: Follow the Money
Brazil’s SanarMed scores $11.3 million for online medical training. SanarMed launched in 2013 to improve healthcare outside of Brazil’s major metro centers by making medical learning material available to doctors and students online. With universities and schools shut because of the coronavirus, the content SanarMed offers is in high demand, Daniel Izzo of Vox Capital, a SanarMed investor, told ImpactAlpha. SanarMed raised 60 million reais ($11.3 million) in a new funding round led by Valor Capital and DNA Capital, with new commitments from Vox and e.Bricks Ventures.
BibliU raises $10 million as more students shift to online learning. U.K.-based BibliU partners with universities, libraries and educational publishers to make course materials and textbooks available online. The company’s Series A round was backed by Nesta Impact Investments, Guinness Asset Management and clients of Stonehage Fleming and ClearlySo.
Ureeka raises $8.6 million to connect underrepresented entrepreneurs with funding and mentors. The company pairs Black, Latinx and women-led businesses with mentors, coaches, and corporate grant programs. Ureeka was co-founded by Melissa Bradley, a former Clinton and Obama appointee who heads business accelerator 1863 Ventures (see “Boosting the success of Washington D.C.’s founders of color”). Bullpen Capital, Chicago Ventures and Salesforce Ventures backed the round.
Signals: Ahead of the Curve
Goldman Sachs sees rise of the “S” in ESG investing. It’s not that the “E” in ESG investing is taking a back seat. “It’s more that the “S” is climbing into the front seat,” as the COVID crisis has brought social issues to the forefront, says Goldman Sachs’ John Goldstein. Corporates, asset owners and asset managers are wrestling with questions about workforce, health and other societal issues, Goldstein said on a media call discussing Goldman’s report, “Sustainable Finance: The imperative and the opportunity.” The financial giant last year pledged to move $750 billion over the next decade to the climate transition and inclusive growth (see, and listen in to, “Big investors press asset managers to integrate ‘ESG’ and impact across portfolios”). “If there were ever a moment to highlight the importance of non-financial factors in understanding, evaluating and navigating complex markets and economies,” says Goldstein, this is it.
- Social bonds. Since COVID struck, Goldman has led the issuance of more than $18 billion in “COVID relief bonds.” Proceeds help countries and businesses respond to the pandemic. “What we’ve seen in the course of the March issuances is that social bonds have really taken off, and have actually got an equal, if not more, weighting in the bond issuance market,” said Goldman’s Kyung-Ah Park.
- Business case. Goldman repositioned a money market fund in 2018 to prioritize diverse broker-dealers. Since then, the firm has used diverse dealers to buy half of its assets. Last proxy season, Goldman voted against 312 directors at 214 companies for not having women on their boards. The firm will only take public companies with at least one diverse board director (the requirement rises to two next year). Public offerings of U.S. companies with at least one female director have significantly outperformed companies with no female directors. “This is fundamentally about performance,” said Goldman’s Kara Mangone.
- Engaged clients. In terms of performance and flows, sustainable investing has performed in the downturn (see, “Sustainable investments are growing, and outperforming, in a volatile market”). Goldman Sachs says client engagement around sustainable finance increased in March over January or February. Clients are engaged and strategic, says Goldstein, “particularly at the top of the house.”
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Refugee ETF. A team from NYU’s Stern School of Business and Wagner School of Public Service took first place in this year’s Kellogg-Morgan Stanley Sustainable Investing Challenge with an exchange-traded fund, or ETF, designed to facilitate the economic integration of refugees (see “The Sustainable Investing Challenge has become a leading indicator of talent and ideas”).
Agents of Impact: Follow the Talent
Impact Capital Managers places eight first-year graduate student Mosaic Fellows with impact fund managers, including Community Investment Management, Ecosystem Integrity Fund and Arborview Capital… Project for Public Spaces appoints Kelly Verel and Nidhi Gulati as senior directors of programs and projects… Triodos Bank is hiring a managing director in Driebergen-Rijsenburg, Netherlands.
Nordea’s Impact Private Equity group seeks a director of responsible investment in Stockholm… Guggenheim Partners is accepting applications for its Network for Social Innovation, a venture philanthropy initiative for nonprofits, through May 29… Planet Tracker has introduced data dashboards that provide interactive data to help financial professionals identify their exposure to environmental risks.
Thank you for reading.
–Apr. 22, 2020