The Brief | October 7, 2020

The Brief: Health clinic electrification, insect protein, India’s soil health, corporate energy retrofits, stakeholder capitalism tools, JPMorgan’s climate vow

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Featured: ImpactAlpha Original

Inside the scramble for solar financing as frontline public health clinics confront COVID. It is unacceptable verging on unfathomable that the majority of frontline public health clinics in sub-Saharan Africa don’t have electricity for refrigerators and medical devices, to charge phones and laptops, or even to provide lighting so doctors, midwives and other health workers can see at night. Power has long been essential to efforts to meet Sustainable Development Goal No. 3, ensuring healthy lives, but the COVID crisis is spurring a scramble to bring reliable, renewable power to frontline clinics. To help sustain the momentum, this week’s Agents of Impact Call No. 24 is bringing together practitioners around an innovative finance challenge: light every clinic. “There is a real urgency around leveraging the awareness that COVID has raised around the importance of power to the provision of healthcare,” says Sustainable Energy for All’s Jem Porcaro. “When COVID-19 disappears, we are at risk of finding ourselves back in the same position we were in.” 

The new health clinic financing initiatives borrow elements already working in adjacent sectors. Power Africa, through USAID, awarded grants to companies using service models to turn high initial capital costs into affordable operating expenses. GreenStreet Africa, recently added to the portfolio of the Global Innovation Lab for Climate Finance, is developing a model to aggregate small healthcare-related solar projects into portfolios that can attract local investors in commercial bonds. Norway-based Differ Group adds provisions for operations and maintenance to ensure that systems continue to generate power for the life of the financing. The UNDP’s Solar for Health initiative is seeking to leverage donor funding to create guarantees and other mechanisms to backstop commitments from country-level health ministries. “The business case for health clinic electrification is tough,” says USAID’s David Stonehill. With blended capital, new technology and energy-as-a-service, he says, “we can start to move the needle and make a difference.”

Keep reading, “Inside the scramble for solar financing as frontline public health clinics confront COVID,” by David Bank on ImpactAlpha.

  • Agents of Impact Call No. 24: Solar financing for frontline health clinics. The World Bank’s Raihan Elahi, Sustainable Energy for All’s Jem Porcaro, UBS’s Phyllis Costanza and Liebreich Associates’ Michael Liebreich join We Care Solar’s Laura Stachel and ImpactAlpha’s David Bank and special guests to explore financing solutions for clean, affordable and reliable solar power for frontline public health clinics, this Thursday, Oct. 8, at 9am PT/ 12pm ET/ 7pm Kampala. RSVP now.

Dealflow: Follow the Money

Ÿnsect raises $372 million for carbon negative, vertical insect farming. The France-based agtech company represents a trifecta of agrifood tech trends: alternative proteins, carbon offsets and novel farming systems. Ÿnsect is expanding its high-tech vertical farm in Amiens, which recycles waste streams to raise mealworms for sustainable fish and animal feed (see, “These insects feed fish that feed people”). The company says its facility is carbon-negative, sequestering more carbon than it emits. At full capacity, the farm will produce 100,000 tons of insect products annually.

  • Series C. Ÿnsect extended its fundraising round after raising $125 million last February. Among the new investors: Upfront Ventures, Happiness Capital, Supernova Invest, Armat Group and actor Robert Downey Jr.’s FootPrint Coalition. Astanor Ventures led the round. 
  • Check it out.

Krishitantra secures seed funding to monitor India’s soil health. Krishitantra’s Sandeep Kondaji was frustrated in getting timely soil data to help his uncle make decisions around fertilizer use on his farm. Kondaji launched Krishitantra in 2017 to develop a portable device to enable farmers to do rapid soil testing and avoid costly overuse of chemical treatments. The Mangalore-based company has raised $1 million from NAB Ventures and Omnivore to grow sales of its testing equipment and data analysis for farming collectives, agribusiness companies and other labs. 

  • Living soil. Most soil tests measure only inorganic compounds like boron and sulfur. Krishitantra provides data on organic soil composition as well. “If you want to protect the soil, you have to protect the living things in the soil,” Kondaji told ImpactAlpha. He says he sent a soil sample from his uncle’s farm to a government-run laboratory 2016. “I still have not received the results,” he adds. Krishitantra’s device can return soil analysis results within 30 minutes.
  • Dig in.

Redaptive raises $156.5 million to meet corporate demand for energy efficiency. The San Francisco-based startup helps corporations meet climate commitments without upfront capital for lighting replacements, air conditioning and appliance retrofits and other energy efficiency measures. CarVal Investors led the round with existing investors CBRE, Engie, New Ventures, Evergy Ventures and Linse Capital.

Signals: Ahead of the Curve 

Helping companies make good on their commitments to stakeholders. COVID-19, racial justice protests, and the climate emergency are putting corporate commitments to “purpose” to the test. An analysis of corporate behavior finds that signatories of the Business Roundtable’s pledge last year performed no better on social measures than non-signatories. “Companies are really struggling right now to understand what’s expected of them and what sustainable leadership looks like,” Ceres’ Kristen Lang told ImpactAlpha. The nonprofit is releasing a roadmap to help managers prioritize actions for the next decade. It’s part of a range of new initiatives to help corporations live up to their promises to value employees, suppliers, communities and the planet, along with shareholders. 

  • Worker wellness. Even before COVID, half of workers at America’s 1,000 largest public companies did not make enough to support a family of three, even with a part-time working spouse, according to the nonprofit JUST Capital, co-founded by hedge fund billionaire Paul Tudor Jones. JUST’s new tool, developed with PayPal, will help companies assess whether employees can cover basic necessities. A broader Worker Financial Wellness Initiative aims to “make workers’ financial security and health a C-suite and investor imperative.” Companies that prioritize workers outperform, JUST’s research has shown. JUST and PayPal will host a webinar Oct. 28. 
  • Stakeholder metrics. A reporting framework released by the World Economic Forum and the Big Four accounting firms Deloitte, EY, KPMG and PwC aligns corporate financial reporting with environmental, social and governance, or ESG, indicators. Harvard’s George Serafeim and Sir Ronald Cohen are working on impact-weighted accounts that enable companies to account for benefits and costs to society and the environment (see, “Weighting accounts for impact”).  
  • Roadmap 2030. Ceres’ tool helps companies develop plans for climate action, sustainability in business operations, and “systems change,” such as public policy engagement and multi-stakeholder collaboration. It’s also a roadmap for investor expectations. “There are critical things that need to happen in the next five years,” said Lang. 
  • Get moving.

JPMorgan Chase will align financing strategy with Paris Agreement. The bank said it will reduce the emissions it finances in line with Paris goals. The world’s largest fossil fuel funder, long a target of climate activists, will set emissions targets for the oil and gas, electric power, and automotive manufacturing sectors, and advocate for carbon pricing. JPMorgan will work “to transition our economy and turn the goals of Paris into a reality,” said co-president Daniel Pinto, who announced a new Center for Carbon Transition. But the bank won’t drop fossil fuels clients, arguing that “adequate commercially-available solutions to replace oil and natural gas” are lacking. A shareholder proposal asking JPMorgan to explain how its activities align with the Paris accord drew nearly 50% of votes this spring. 

  • Half empty. “A promissory note for 2030 or 2050 isn’t worth the paper it’s printed on unless it is matched by action in 2020,” said Paddy McCully of Rainforest Action Network, which pegs the bank’s fossil fuel funding since 2015 at more than $268 billion. The bank, McCulley said, should “immediately stop financing expansion of fossil fuels and deforestation.” JPMorgan’s move follows Morgan Stanley’s commitment last month to zero out emissions facilitated by its loans, underwriting and other financial activities by 2050 (see, “The new North Star for corporate sustainability: Net zero”). 
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Agents of Impact: Follow the Talent

Lorenzo Bernasconi steps down as managing director of innovative finance at Rockefeller Foundation… Sarah Stremlau, ex- of Arabella Advisors, is the new president of LOCUS Impact Investing… Jessie Duncan, ex- of Boston Consulting Group, has joined the Tipping Point Fund on Impact Investing as a program officer… ISF Advisors is looking for a manager in Abidjan, Côte d’Ivoire… The Investment Integration Project and Moving the Market are hosting a preview of “Understanding systemic social risk: A roadmap for financial industry action,” featuring Chloe Bailey of The Freedom Fund, SEIU Pension’s Renaye Manley, consultant Michael Musuraca and TIIP’s William Burckart on Thursday, Oct. 15.

Thank you for reading.

–Oct. 7, 2020