The Brief: Impact video games, Renewal’s fourth fund, forest preservation bonds, ending energy poverty, catalyzing capital at CDC Group



Greetings, Agents of Impact!

ImpactAlpha Series: Creating Impact

Alaska Natives build a bridge to the future – of video games. Talk about cultural capital. The Cook Inlet Tribal Council, looking for a way to engage youth in its community, set out to create a video game rooted in Alaska Native culture. Seven years later, the Anchorage-based nonprofit social services agency is the largest equity owner in E-Line Media, a leading independent video game producer that counts social impact as its key differentiator. The council’s social enterprise arm traded its ownership stake in the successful 2014 game, “Never Alone” along with additional capital, for about one-third ownership of E-Line and key management roles. “We valued the financial return, but we also had to make sure that impact was very important as well,” said Amy Fredeen, now the CFO of both the tribal council and E-Line.

The latest installment in ImpactAlpha’s “Creating Impact” series, produced in partnership with Upstart Co-Lab, recounts the saga of “Never Alone” (Kisima Ingitchuna) to show how authentic new voices married to top-notch production and entertainment value can create compelling titles and help drive the future of social impact media more broadly. With investors Matt and Ray Dalio, E-Line is developing “Endless Mission” a game-as-a-service to compete with mega-franchises like Minecraft and Fortnite and an “Impact Slate Game Fund” to attract impact investors to the next generation of social impact video games while diversifying the risk of backing individual titles. Like television, independent video game production is flourishing, but the democratization of the market makes it imperative to stand out among the flood of titles. “When it all comes together, social impact provides a high level of differentiation in the market,” says E-Line’s Alan Gershenfeld. “But good intentions are not enough. Games have to be good.”

Keep reading, “Alaska Natives build a bridge to the future – of video games,” by David Bank on ImpactAlpha.

Dealflow: Follow the Money

Renewal Funds closes fourth impact fund at $109 million. The Vancouver-based impact investor and certified B Corp has been investing in environmental technology and sustainable consumer products since 2008. The firm raised C$145 million ($109 million) for investments in early stage companies other impact investors might overlook, such as public-transportation tech. “Many funds are averse to investing in companies working with municipalities because the sales cycle is so long,” Renewal’s Paul Richardson told ImpactAlpha. “But when you get it, you have a really good, sticky customer.” Renewal4 targets water and energy solutions and planet-friendly products and has invested in public-transit software maker Swiftly, energy software startup Opus and snack company Prana. Renewal was an early investor in Seventh Generation, now owned by Unilever, and alternative protein company Sweet Earth, acquired by NestléHere’s more.

The Conservation Fund closes $150 million green bond to preserve forests. Trees are the best carbon capture tech on the planet. The Conservation Fund is leveraging green bonds for the first time to finance the acquisition and protection of U.S. forestlands. Goldman Sachs served as the sole underwriter. “We believe this unique green bond offering will not only help combat climate change by protecting high conservation working forests but also ensure sustainable livelihoods for the communities that depend on those ecosystems,” said Goldman’s Kyung-Ah Park. Proceeds from its bond offering will go toward the Conservation Fund’s Working Forest Fund, which is aiming to conserve five million acres in 15 years. Other innovative structures helping to finance forest preservation include a new Lyme Timber fund and a “forest resilience bond” from Blue Forest Conservation and World Resources InstituteRead on.

African Development Bank takes on ‘energy poverty’ with $15 billion pledge. More than 840 million people around the world live without electricity. “Without light, you can’t do anything,” Akinwumi Adesina, president of African Development Bank, said at a Climate Week event hosted by the Rockefeller Foundation. “Business can’t work, hospitals can’t work, water and sanitation can’t work. All these things that we think of as quality of life, it all revolves around energy.” Adesina pledged $15 billion over five years toward the Global Commission to End Energy Poverty (GCEEP), an initiative he co-chairs with Rockefeller’s Rajiv Shah and MIT’s Ernest Moniz to end ‘energy poverty.’ The initiative aims to raise another $50 billion, including a significant chunk from governments, NGOs and other sources of concessionary capital. The investments will likely involve a mix of solar, hydro, wind and, some argue, natural gas. “There are huge opportunities for private investment,” Shah told ImpactAlphaGet the full story.

Impact Voices: Pass the Mic

How the U.K.’s CDC Group is innovating with catalytic capital. Many nations’ quasi-public development-finance institutions are tasked with helping drive private capital toward public goods in emerging and frontier markets. But they often are just as risk-averse as commercial capital itself. To advance the Sustainable Development Goals, CDC Group, the U.K. development institution, is asking itself how to make its money work harder for impact. At least part of the answer is by assuming greater risk-return flexibility in investments that can help shape nascent markets and build more inclusive and sustainable emerging-market economies. CDC is introducing “Catalyst Strategies” that will guide as much as $1.5 billion in new investments, on top of its current pipeline of $500 million in commitments.

In a guest post on ImpactAlpha, CDC’s Yasemin Saltuk Lamy and Harvey Koh of the consultancy FSG, which helped articulate the strategy, reflect on five guidelines to ensure such catalytic investment maintain investment rigor. Risk is the central theme. CDC’s MedAccess strategy, for example, deploys volume guarantees to make essential medicines more accessible in poorer countries. Gridworks, a developer and investor in electricity networks in Africa, carries out the early-stage development work needed to create commercially viable opportunities. Saltuk Lamy will be at the Global Impact Investing Network’s investor forum in Amsterdam this week to discuss the questions raised in the post: “How do we define what a ‘good’ Catalyst investment is, in a way that avoids us merely going after bad investments? What types of risk are we willing to take, and which will never be in scope?” The CDC’s journey.

Agents of Impact: Follow the Talent

Lisa Hall will lead the Beeck Center’s Fair Finance Initiative to reimagine community investing, drive impact in Opportunity Zones, finance immigrant and refugee integration, promote inclusive entrepreneurship and create equitable capital markets… Andrew Parry, ex- of Hermes Investment Management, joins Newton Investment Management as head of sustainable investment… Acumen America is looking for a portfolio manager in San Francisco… SJF Ventures is hiring a senior analyst or associate in New York, San Francisco or Durham.

Thank you for reading. 

– Sept. 30, 2019

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