The Brief | September 3, 2024

The Brief: Investing in climate + nature + gender on this month’s Liist

ImpactAlpha
The team at

ImpactAlpha

Greetings Agents of Impact!

In today’s Brief:

  • Climate + nature + gender on this month’s Liist of actively raising impact funds
  • Bringing small, modular nukes to market
  • Diversity outperformance data

Bringing gender lenses and nature-based solutions to climate investing. Incorporating both climate and gender angles in an investment thesis is table stakes for fund managers seeking to attract investors, one general partner observed at a convening of for emerging market managers in Dar es Salaam two years ago. Since then, ImpactAlpha has tracked more than 40 funds addressing challenges at the intersection of climate and gender. The growth reflects the increasing awareness that climate action depends on women, and that gender equity includes addressing the climate change’s distinct impacts on women. “More investors are seeing that gender is a lens that can cut across climate and other thematic opportunities, and that it offers the potential to enhance returns, mitigate systemic risk and deepen value creation,” says Sana Kapadia of Heading for Change, the climate + gender investor and ecosystem builder started by the late Suzanne Biegel (disclosure: Heading for Change sponsors ImpactAlpha’s climate + gender coverage).

In the runup to Climate Week NYC, ImpactAlpha’s Liist of actively raising impact funds this month includes several climate + gender additions. Kenya-based climate tech investor KawiSafi Ventures, part of the Acumen network, is aligning its second fund with the 2X Criteria, a nod to women as makers, buyers and users of the products and services in its portfolio. “We want to source a pipeline that has gender representation,” KawiSafi’s Amar Inamdar told ImpactAlpha.

  • Climate leadership. Women-led EcoEnterprises Fund is raising its fourth fund to strengthen the climate resilience of Latin America’s rural, low-income and vulnerable communities, while protecting the region’s biodiversity and natural resources. In India, women-led Avaana Capital is in the market with a $120 million fund to support early stage tech ventures that help India mitigate and adapt to climate change (see, “India’s climate investors look beyond EVs and energy for an investment edge“).
  • Investing in nature. Three managers on this month’s Liist are in the market with funds that seek to enlist nature as our biggest ally in the fight against climate change. The Global Fund for Coral Reefs, managed by Connecticut-based Pegasus Capital Advisors, is one the few commercial-scale impact funds focused on SDG No. 14: Life below water (go deeper with ImpactAlpha’s Q&A with Pegasus’s Dale Galvin). Beartooth Group in Montana is focusing on life on land: it had a first close earlier this year for its targeted $40 million fourth fund to acquire and restore degraded land in the western US (here’s ImpactAlpha’s report on Beartooth’s first fund, way back in 2014). A spate of recent investments testify to the growing recognition of natural value, including the World Bank’s first outcomes-based bond to reforest the Amazon.
  • Keep reading, “Bringing gender lenses and nature-based solutions to climate investing,” by Jessica Pothering and Lucy Ngige on ImpactAlpha.
  • Scan ImpactAlpha’s full Liist of more than 150 impact funds that have been raising capital in the past year. Know an impact fund manager in fundraising mode? Complete this short form.

Dealflow: Low-Carbon Transition 

Last Energy raises $40 million for next-generation nuclear power plants. The Plant Vogtle nuclear power plant that went online in Georgia last year was the first nuclear addition to the grid in three decades. The conventional reactor cost $30 billion amid delays and cost overruns. But nuclear power is back in favor as governments and utilities search for low-carbon “baseload” power and startups design reactors that are smaller, more modular and less expensive than conventional plants. Washington, DC–based Last Energy, raised $40 million to build 20-megawatt modular reactors, starting in Europe. The Series B round was led by Austin, Texas-based Gigafund, Autodesk Foundation and family offices.

  • Plug and play. Last Energy plans to serve industrial and data center customers by building light-water reactors on site and selling the power to the business. The company’s off-the-shelf technology and modular construction will allow it to build plants in as little as two years. “Last Energy’s approach to micro-modular nuclear power has the potential to fundamentally change how we think about energy production, offering a rapid, scalable and economically viable solution to decarbonize heavy industry,” said Autodesk Foundation’s Ryan Macpherson. Also this month, modular nuclear startup Aalo Atomics snagged $27 million from Fifty Years and other investors. Deep Fission, which is building underground reactors, raised $4 million from 8VC.
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Asia Impact leads $17 million investment in India’s Agrim, a marketplace for agriculture inputs. India’s agricultural supply chains are underdeveloped and fragmented despite how many livelihoods depend on agriculture. Gurgaon-based Agrim offers an online marketplace that connects producers of seeds, tools and other inputs to small agricultural retailers that in turn supply them to farmers. Agrim offers credit and logistics services to the retailers to fulfill their orders (see, “New channel of capital for small businesses worldwide: enterprise tech startups”). Southeast Asia-focused impact investor Asia Impact led Agrim’s $17.3 million Series B round. Early investors, including Omnivore, Accion Venture Lab, India Quotient and Kalaari, reupped in the new round.

  • Just in time. Agrim’s low-tech interface has helped introduce e-commerce to suppliers and producers that have traditionally done business offline. Its backend engine uses just-in-time order matching and dynamic pricing to reflect real-time supply and demand and coordinate deliveries. Agrim says it connects 1,200 manufacturers to 25,000 retailers that serve 15 million farmers. The startup is looking to develop private label products to address “demand and supply mismatches,” Agrim’s Mukul Garg told TechCrunch.
  • Dive in.

Dealflow overflow. Investment news crossing our desks:

  • Raven Indigenous Capital Partners backs Runwithit, which provides 3D synthetic modeling, data visualization and “digital twin” technology to regions and cities to explore the potential impact of natural or human-caused events. (Vancouver Tech Journal)
  • Rwanda-based Ampersand, a maker of electric motorcycles, raised $2 million from AHL Venture Partners, Everstrong Capital and Beyond Capital Ventures. The raise brings the company’s total funding raised over the last year to $21.5 million. (Ampersand)
  • Jakarta-based Lokatani raised pre-seed capital from Asiapay Capital and Jakarta Ventura for its hydroponic farming tech. (DailySocial)
  • South African small business lender UsPlus raised 80 million rand ($4.5 million) through a social bond to expand lending to Black-, women- and youth-owned businesses. (Zawya)
  • Energix Renewables and Google signed a renewable energy agreement that covers 1.5 gigawatts of solar project development until 2030. Energix will supply electricity and renewable energy credits generated from its solar projects to Google. (Energix Renewables)

Impact Voices: Fiduciary Future

Long live the meritocracy! Long live fiduciary duty! Long live DEI! Ford Motor Co. last week became the latest corporation to roll back its commitment to diversity, equity and inclusion, or DEI. Ford announced changes to its employee resource groups and its withdrawal from the Human Rights Campaign’s Corporate Equality Index. Ford joins Lowe’s, Harley Davidson, Tractor Supply Co. and John Deere in rolling back social policies in their workplaces. Other companies are doubling down on the necessity of diverse and inclusive workplaces. The question for investors: Who will outperform? Such backpedaling is “terrible corporate strategy,” write Whistle Stop Capital’s Meredith Benton and As You Sow’s Andy Behar in a guest post on ImpactAlpha. What’s more: Corporate directors may be in breach of their fiduciary duties, they say. Companies with more diversity perform better financially, according to publicly available data. To ensure that workplaces are meritocratic, argue Behar and Benton, investors need more public data on corporate diversity and fewer allowances “for historically advantaged groups to continue to underperform.”

  • Due diligence. Last year, a five-year study of workforce demographics by As You Sow and Whistle Stop Capital found that the more white male leaders a company had, the more likely the company was to underperform financially. The research identified negative correlations between higher percentages of white males and income after tax, 10-year revenue growth, net profit margin and return on invested capital, among other metrics. Conversely, “linear regression of this massive dataset showed a statistically significant positive correlation between diversity and financial performance.” Last year, the two organizations analyzed more than 6,000 EEO-1 reports to assess the management diversity of 1,641 publicly traded companies against their financial performance from 2016 to 2021. “The numbers are public, the companies are public, and we’re happy to share our methodology and analysis,” share Behar and Benton.
  • Legal liability. Benton and Behar say corporate leaders have told them, in private conversations, that they fear that “speaking up on DEI-related topics will get them into trouble with a small cohort of folks who oppose equity.” In their guest post, the authors detail the public statements issued by Ford, Lowe’s and the other companies affirming their commitments to diversity. Investors who made decisions based on such material disclosures “may see the sudden rollbacks as a bait-and-switch,” the authors write. The reversals “could be interpreted as intentional underperformance and lead to legal actions.”
  • Keep reading, “Long live the meritocracy! Long live fiduciary duty! Long live DEI!” by Meredith Benton and Andy Behar on ImpactAlpha.

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

Arnold Byarugaba, previously with Mastercard Foundation, joins the Collaborative for Frontier Finance as the chief operating officer and head of networks. Chinwe Egwin, formerly with the Central Bank of Nigeria and Fitch, joins CFF as chief economist and research director… Builders Vision is hiring a vice president of energy in Chicago… Also in Chicago, Impact Engine seeks an investment analyst. 

Arctaris Impact Investors is recruiting an analyst… Lafayette Square has open roles for a business development associate and a marketing coordinator… Climate Policy Initiative is hiring a senior manager for its ClimateShot Investor Coalition, a program manager and an associate director of finance… Prologis seeks a director of ESG regulatory reporting in Denver.

Railpen and the Predistribution Initiative are hosting “Perspectives on workforce directors – opportunities and challenges,” Thursday, Sept. 5… Finnovista is hosting Finn Summit, Wednesday, Sept. 25 in Mexico City… Nova Institute is hosting “Mastering CSRD compliance,” Thursday, Sept. 26.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Sept. 3, 2024