The Brief | June 5, 2023

The Brief: Institutional impact in the green transition, sourcing substitute teachers, coping with copper shortages, currency guarantees, thriving farmers

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Greetings, Agents of Impact!

👋 Join The Call. The next call in ImpactAlpha’sMuni Impact” series, “How asset allocators are driving racial equity in municipal bonds,” features Harvard’s David Wood, Renaye Manley of the Service Employees International Union, and other Agents of Impact, Wednesday, June 14, at 10am PT / 1pm ET / 6pm London. RSVP today.

Featured: Institutional Impact

Forget ESG. The greening of the global economy is a boon for institutional investors. Last fall, Politico ranked Russian President Vladimir Putin No. 1 on its list of the 28 most influential power players driving Europe’s green agenda. It “took a war criminal to speed up Europe’s clean energy revolution,” as Politico put it. In her latest Institutional Impact column, ImpactAlpha contributing editor Imogen Rose-Smith is bullish on the opportunities for institutional investors in the global clean energy boom. Last month, Norway’s $1.3 trillion sovereign wealth fund added a 16.6% stake in a German offshore wind farm in the North Sea to its portfolio of renewable projects. Last year, Ontario Teachers Pension Plan unveiled plans to invest up to $1 billion in new offshore wind projects. JPMorgan has agreed to invest more than $200 million to purchase carbon credits from start-up companies focused on carbon removal. “Climate-related markets are creating significant opportunities for institutional impact investors,” Rose-Smith writes. “Institutional-sized opportunities.”

There is still plenty of money to be made out of the Texas oil patch, and maybe even West Virginia gas, Rose-Smith says, “now that court clearance of the Mountain Valley Pipeline is part of the ransom to be paid for the privilege of not defaulting on the U.S. sovereign debt.” But the long-term future is sustainable. “If the Norwegians and the Canadians are cleaning up, the investors who are most likely to miss out on these opportunities are public pension funds in Texas, Florida, Utah and other states in the U.S. that are being hamstrung by their local politicians,” she writes. Nonetheless, the war and public subsidies are hastening the fabled inflection point. Germany raised its target for the renewable share in power generation by 2030 to 80%, from 65%. Europe has advanced, from 2030 to 2025, its target for doubling the EU’s installed solar capacity. China has set a goal of 33% renewable power generation by 2025. Putin’s war in Ukraine is being waged in no small part because the low-carbon transition is an “existential threat to Russia and Putin’s vice-like control over the petrostate,” Rose-Smith writes. “Talk about being on the wrong side of history.”

Keep reading,Forget ESG. The greening of the global economy is a boon for institutional investors,” by Imogen Rose-Smith on ImpactAlpha. Catch up on all of Imogen’s Institutional Impact columns.

Dealflow: Workforce Tech

Swing Education raises $38 million to mitigate teacher shortage. Public schools are scrambling to hire teachers. Some 150,000 openings were unfilled across the US in February as teachers grapple with low pay, safety concerns and public scrutiny. San Francisco-based Swing Education’s marketplace connects schools with qualified substitute teachers to help fill the gap, and provides upskilling opportunities for educators. Swing brings “much needed digitalization to the substitute teacher staffing marketplace and making it easier and more efficient to match talent with schools,” said David Su of Apax Global Impact, which co-led the Series C round with edtech and workforce investor Reach Capital.

  • Teach in. Swing says its substitute teachers filled more than one million instruction hours in the school year just ending. The new funding will help Swing expand in California, Arizona, Texas, Illinois, New York, New Jersey, and Washington, D.C. Founded in 2015, the company was seeded by investors including Social Capital, Kapor Capital, Moment Ventures, Ulu Ventures, Red House Education, and Edovate Capital.
  • Share.

Chile’s Ceibo digs up $30 million for more efficient copper mining. Copper is the unsung hero of decarbonization, an essential element for transmission wires, electrical wiring in buildings and EVs. A shortage looms as copper miners dig deeper to extract the mineral, where concentrations are lower and extraction more expensive. Global demand for copper is expected to outstrip supply by more than 7 million tons by 2031. Ceibo, based in mineral-rich Chile, has developed a leaching process that can extract three times as much copper from ore than conventional processes, breathing new life into existing mines that might be idle due to lack of economic viability. “No new plants or facilities need to be constructed. We don’t need more water or electricity,” Ceibo’s Cristóbal Undurraga told Climate Tech VC in an interview. 

  • Greening mining. The exploding demand for copper, lithium, cobalt and other minerals has heightened the need for more sustainable mining practices. A group backed by the U.N. and Principles for Responsible Investment in January launched the Global Investor Commission on Mining 2030 to address mining’s social and environmental impacts, including child labor and impacts on local communities and biodiversity. 
  • Prototype. Ceibo’s $30 million Series B round was led by Energy Impact Partners and a group of tech and mining investors. “The looming copper supply shortage will quickly become a major bottleneck to electrification,” said EIP’s Shayle Kann. The Santiago-based company will use the funding to scale its technology, including a prototype plant followed by a demonstration plant with a mining company.
  • Dig in

Dealflow overflow. Other news crossing our desks:

  • Dallas-based private equity firm NGP clinched its $700 million energy transition fund. The fund has invested $100 million in companies including Dandelion Energy and Rubicon Carbon.
  • Measurabl, a San Diego, Calif.-based ESG platform for commercial real estate, snagged a $93 million Series D round led by Energy Impact Partners.
  • Dutch startup Sevi raised €1.1million ($1.7 million) to expand its buy now, pay later app for micro-entrepreneurs in Kenya and Uganda.
  • The Dallas Housing Opportunity Fund, a unit of Local Initiatives Support Corp., invested $5.4 million in a mixed-income, LGBTQIA+-affirming housing complex in Dallas.

Short Signals: What We’re Reading

💱 Guarantees for a just transition. The high-level Summit on a New Global Financing Pact in Paris in June will take up a $100 billion plan produced by the Bridgetown Initiative, spearheaded by Barbados leader Mia Mottley, to catalyze capital for climate and development finance in poorer countries by providing currency guarantees to investors. (Reuters)

🇮🇳 India impact investing. Almost 400 impact enterprises in India received roughly $5.8 billion in investments across 411 equity deals in 2022. Climate tech emerged as the most active sector even as total impact investment in the country fell by $1 billion. (India Impact Investors Council)

👨🏾‍🌾 Farmer wellbeing. A Farmer Thriving Index from 60 Decibels will seek to answer the question, “How are farmers doing?” by measuring living incomes, financial resilience, livelihood sustainability and food security. (Small Foundation)

🌾 Carbon-tilted index. The Bloomberg Commodity Carbon Tilted Index will overweight commodities with a lower carbon footprint. “There is a growing want to support the transition to a low-carbon economy while remaining aligned with their investment goals across all asset-classes,” said Bloomberg’s Allison Stone. (Bloomberg)

☀️ Texas dodges a bullet. Proposals to kneecap renewables and stick Texans with costly new gas power plants were removed from bills at the end of the legislative session. (Canary Media)

👩🏽‍💼All hands on deck. Climate tech needs more than engineers. Thousands of job listings from the site Climatebase show strong demand for non-technical, general business skills in operations, human resources and marketing. (Bloomberg)

Agents of Impact: Follow the Talent

Demetric Duckett, ex- of Living Cities, joins Known as managing partner. Known will house Living Cities’  $100 million Catalyst Fund III, which aims to address underinvestment in Black, Indigenous and other communities of color (listen to Demetric in ImpactAlpha’s podcast, “New decision-makers for the new majority”)… Ford Foundation’s Roy Swan joins the board of directors of Global Impact Investing Network… Bamboo Capital’s Florian Kemmerich will lead Palladium’s fund placement team. Kemmerich will remain in his role as managing partner at Bamboo. 

The Environmental Protection Agency is recruiting a director of the Office of the Greenhouse Gas Reduction Fund in Washington DC… The Coca-Cola Foundation is hiring a senior director of impact investing in Atlanta… Prime Coalition seeks a senior director of partnerships… Crunchbase will begin tracking venture dollars allocated to LGBTQ+ founders… Kapor Center is hosting “Queer perspectives on working in the American startup scene,” Thurs., June 29… 

Thank you for your impact.

– June 5, 2023