Greetings, Agents of Impact!
Call No. 20: Moving your assets to impact. COVID. Climate. Racial injustice. Multiplying crises mean it’s time to move your assets. Chris Earthman of the Aragona family office in Austin will join Alabama Power Foundation’s Myla Calhoun, Ford Foundation’s Margot Brandenburg and Grove Foundation’s Rebekah Saul Butler to talk about getting asset owners off the sidelines, with Patrick Briaud and Steven Godeke, authors of Rockefeller Philanthropy Advisors’ new impact investing handbook, on The Call, Thursday, June 25 at 10am PT / 1pm ET / 6pm London. RSVP today.
- Read an excerpt on ImpactAlpha and sign up to receive your copy of “Impact Investing Handbook: An Implementation Guide for Practitioners.”
Featured: ImpactAlpha Original
Agents of Impact Call roundup: Green infrastructure is back on the agenda (replay). The action in climate action is in infrastructure. Falling price curves for renewables and the persistence of mispriced risk means investors can still find opportunities in distributed solar and wind power, waste-to-energy facilities, wastewater systems and sustainable agriculture. “Climate adaptation is enabled by technology, but will be executed in infrastructure,” Equilibrium Capital’s Dave Chen said on ImpactAlpha’s Agents of Impact Call No. 19. Packaged as stimulus for the economic recovery, policy can accelerate the shift to climate-friendly infrastructure. The $1.5 trillion Moving Forward Act, released this week by U.S. House Speaker Nancy Pelosi, would invest in sustainable infrastructure and extend wind and solar tax incentives set to expire next year. “The need is there, the vehicles are there, and possibly even the political will could be there for what would be a massive infrastructure rebuild,” said ImpactAlpha’s David Bank. “It’s all kind of queued up.”
On The Call, the Climate Policy Initiative’s Barbara Buchner said nearly $7 trillion per year will be required through 2030 to meet sustainable infrastructure needs. Annual global climate spending has remained flat at about $500 billion. “We are falling far short of the mark,” Buchner said. Investors don’t need to wait for a Green New Deal to move private capital. David Sher of Greenbacker Capital, which sponsored The Call, said his firm has looked at over a gigawatt worth of renewable energy deals in the last month alone. Since 2011, the firm has invested $800 million in 172 commercial solar and wind projects in North America, generating “good, solid returns” for investors in assets he calls “boring” – in a good way. Caprock Group’s Matthew Weatherley-White said there continue to be “pockets of mispriced risk” throughout the energy value chain, even in mature, lower-risk assets like wind and solar. Market signals, from the lower cost of capital for renewable energy developers to devalued oil, are clear, the panelists agreed. Green energy investments are expected to account for 25% of all energy spending next year, surpassing spending on oil and gas for the first time.
Keep reading, “Agents of Impact Call roundup: Green infrastructure is back on the agenda,” by Amy Cortese on ImpactAlpha.
Dealflow: Follow the Money
Amazon’s $2 billion Climate Pledge Fund ups the ante. The fund will back “visionary companies whose products and solutions will facilitate the transition to a low-carbon economy,” Amazon said in its sustainability report. Target sectors: transportation and logistics, energy generation and storage, and food and agriculture. Amazon says the fund has a global mandate to invest in companies of all sizes and stages in order to meet the e-commerce giant’s pledge to achieve carbon neutrality by 2040.
- Progress report. Amazon’s carbon footprint, from both direct and indirect operations, hit 51.2 million metric tons of CO2-equivalent last year — up 15% from 2018. The company said investments in solar farms, electric fleets and other low-carbon technologies have lowered the carbon intensity of its revenues.
- Billions upon billions. Amazon’s Jeff Bezos is also a backer of Breakthrough Energy Ventures, a $1 billion clean tech investment firm that also includes among its partners Bill Gates, Jack Ma, Vinod Khosla, Meg Whitman and many more. BEV, with 27 companies in its portfolio, has been on an investment tear, backing Zero Mass Water and Quidnet Energy (see below).
- Check it out.
BlackRock leads Zero Mass Water’s $50 million round. Zero Mass Water’s rooftop panels look like solar panels. Instead of converting sunlight to energy, they capture water vapor in the air for drinking water. “The amount of water vapor in the air is six times the amount of water in all of the earth’s rivers, and it’s constantly being recycled,” founder Cody Friesen told ImpactAlpha. Friesen, a materials scientist who developed Zero Mass Water’s technology at Arizona State University, wants to unlock this “renewable source” to overcome obstacles to clean water access, from water scarcity to inadequate infrastructure (like lead pipes). BlackRock was joined by existing investor Breakthrough Energy Ventures in the company’s Series C round.
- Hydropanels. Each Zero Mass Water “hydropanel” can capture several liters of water a day, both in dry, sunny climates like Phoenix or humid, cloudy environments like Manila. The technology purifies the water, so air quality isn’t an issue. Hydropanels have been installed at sites in 45 countries after early pilots in an Ecuadorian slum and a Syrian refugee camp in Jordan.
- Customers and cost. Zero Mass Water’s technology is still on a learning (and cost-reduction) curve. Already, “it makes absolute sense from a cost perspective for consumers in the U.S.,” Friesen says. Economic benefits in emerging markets include reduced health burdens from diarrheal diseases. “Eventually it will be the lowest-cost potable water in the world.”
- Dive in.
Quidnet Energy secures $10 million for hydro-energy storage. The Houston-based company is revamping traditional hydroelectric energy storage technology to help utility grids integrate intermittent solar and wind energy. The company signed a contract with the New York State Energy Development Authority to demonstrate the system.
- Climate investors. Quidnet’s Series B funding round was backed by Trafigura, The Jeremy and Hannelore Grantham Environmental Trust, Breakthrough Energy Ventures and Evok Innovations. Climate tech investor Prime Coalition was an early backer (see, “Prime Impact Fund raises $52 million to jumpstart climate-tech pipeline”).
California edtech venture Blue Studios scores investment from Global Millennial Capital. The Black, female-led business offers a subscription-based online learning platform for teaching STEM skills as online learning accelerates amid COVID. “Our ambitions from the beginning have been to think global first,” said founder Kelley Cambry. Dubai-based Global Millennial Capital invested an undisclosed sum. Earlier investors include 500 Startups and Techstars.
Refugee-powered food company Afia Foods closes $1 million. The Austin-based, woman-led startup makes frozen Mediterranean foods that are available through retailers in Texas. Founder Farrah Moussallati Sibai, who is of Syrian heritage, started the company to fill a gap in culturally-familiar foods in local grocery stores and to provide employment opportunities to Syrian refugees. Unorthodox Ventures invested, Term Sheet reported.
CoPeace raises $1.6 million to invest as an impact holding company. The B Corp has a very low investment minimum, making the opportunity accessible to most investors. Investors buy stock in the holding company, which then invests in social enterprises. It raised the first round of capital from 48 individual investors.
Signals: Ahead of the Curve
Kellogg School to award the Moskowitz Prize for social finance research. The annual prize for research on sustainable and responsible investing and the financial implications of responsible business practices is moving to Northwestern University’s Kellogg School of Management (also the home of the Kellogg-Morgan Stanley Sustainable Investing Challenge and the Sustainable Finance Faculty Consortium, which is meeting this week). As interest in impact and sustainable investing grows, so too does the recognition that such strategies can outperform, mitigate risk and be resilient in a crisis. That puts a premium on the type of evidence-based practices the Moskowitz Prize has been celebrating for 25 years. “This year’s Moskowitz Prize submissions are proving to represent the growth of the field as well as an expansion of issue areas, geographies, asset classes, and investment approaches examined through rigorous analysis,” said Kellogg School’s Megan Kashner. The deadline for this year’s call for papers is June 30.
- Follow the talent. The University of California at Berkeley’s Haas School of Business has hosted the prize since 2005. Long-time steward of the prize, Lloyd Kurtz, who heads Wells Fargo’s impact investing team, will move his visiting scholarship from Haas to Kellogg as well. Other prize judges this year include Kellogg School dean Francesca Cornelli, Boston University’s Caroline Flammer (a two-time Moskowitz Prize winner), Brian Bruce of Hillcrest Asset Management, and Dave Chen of Equilibrium Capital.
- Impact evidence. Last year’s winners Lilian Ng (a judge this year), Rui Dai and Hao Liang found socially responsible customers can infuse socially responsible business behavior in suppliers. In 2018, Abigail Sussman and Samuel Hartzmark presented causal evidence that investors market-wide value sustainability.
- ImpactAlpha U. University of Chicago’s Booth School of Business is the latest academic institution to secure a site license providing access to ImpactAlpha for all of its students. More than a dozen other programs and universities including New York University, Tufts, Yale, Harvard, Stanford, Oxford’s Said Business School, Cape Town’s Bertha Centre and, of course, Kellogg, also have signed on. If your school is not yet on board, contact ImpactAlpha’s Zuleyma Bebell at [email protected] for information on discounted site licenses.
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Agents of Impact: Follow the Talent
Jim Egan, CEO of BBC Global News, joins Media Development Investment Fund as chief investment officer. Egan will step down from MDIF’s board… Anita Zaidi, a pediatric infectious disease physician, is named president of gender equity at the Bill & Melinda Gates Foundation… Kameale Christinia, ChargerHelp founder, joins the board of Women in Cleantech & Sustainability as Los Angeles co-chair… The Global Impact Investing Network is looking for a director of finance and operations in New York… Prime Impact Fund seeks investment operations interns in Cambridge, Mass. or remote.
The European Commission calls for membership applications for its platform on sustainable finance… The City of London Corporation and the UK Impact Investing Institute are hosting the launch of the IMP+ACT Classification System, today at 10am ET / 3pm London… GEF Capital Partners Latam in Brazil becomes a certified B Corp and signatory of IFC’s Operating Principles for Impact Investing (and recently published its 2019 impact report).
Thank you for reading.
–June 24, 2020