The Brief | April 13, 2023

The Brief: Marketplace for social outcomes, students of sustainable investing, bee-friendly pesticides, renewable energy in Africa, AI for climate finance

The team at


Greetings, Agents of Impact!

Featured: Impact Marketplaces

The next step in pay-for-performance: A marketplace for buying and selling social outcomes. A new marketplace has brokered its first deal: the “sale” of $2 million in improved education and mental health outcomes for children in Ukraine. New York-based OutcomesX is using the transaction to launch its platform to transform social impact into tradeable assets in the form of “verified impact units” in education, public health, youth development and other social challenges. The impact units can be bought by corporate and governments to advance policy agendas, meet public pledges and burnish reputations. Like carbon credits, OutcomesX’s impact units will face scrutiny for their rigor and efficacy. By aggregating data and setting a price, the marketplace could help raise such performance. “Ultimately, we want to create a spot market to buy and sell social outcomes,” says Phyllis Kurlander Costanza, who headed social impact for the Swiss bank UBS before founding OutcomesX with Jason Saul, the founder of the Impact Genome Project. OutcomesX is using a subset of 132 outcomes across a dozen themes from Impact Genome Project’s database of 2.2 million global nonprofits and social enterprises to source its initial supply of outcomes. 

For its first transaction, OutcomesX recruited 63 Ukrainian nonprofits to upload data proving their outcomes. As the buyer, UBS Optimus Foundation selected a portfolio or organizations from which to purchase “verified impact units” totaling $2 million. OutcomesX transmitted the funds to the local organizations, including EdCamp and Divchata. Such non-governmental organizations in Ukraine have faced obstacles accessing much of the $17 billion in humanitarian aid that has been pledged since Russia’s invasion last year. OutcomesX’s marketplace promises to democratize access to corporate spending on social responsibility and community engagement. As CEO of UBS Optimus Foundation, Costanza was an early backer of development impact bonds for girls education and maternal health in the Indian state of Rajasthan. The bonds paid off, but such instruments “are time consuming and complex and it takes years oftentimes to structure one of these deals,” Costanza tells ImpactAlpha. “The whole goal of this is to create a more equitable space for social enterprises and nonprofits. These organizations in Ukraine would never ever have been able to access UBS.”

  • Nature-based marketplace. Like social-service organizations, developers of local, small or early stage nature-based solutions lack access to global capital. Integrity Global Partners, launched this week by structured-finance veteran Cheri Sugal, hopes to improve efficiency for investors and thousands of nature-based project developers. “There’s a real gap in the market for this ability to enable the project developers to access that capital,” says Sugal. Integrity Global will work with developers to de-risk, verify and package projects to attract investors. “We’re trying to restore the credibility,” Sugal says.
  • Keep reading, “The next step in pay-for-performance: A marketplace for buying and selling social outcomes,” by David Bank and Amy Cortese on ImpactAlpha.

Dealflow: Innovative Finance

MBA and other students rise to the sustainable investing challenge. A dozen finalists in the Kellogg-Morgan Stanley Sustainable Investing Challenge are swapping debt for nature, tracking water credits, insuring soil and sharing income with proposals for new financing mechanisms to “drive sustainability impact at scale.” Judges will choose winners of the 13th annual competition in London on Friday. This year’s contest saw 313 students on 67 teams submit proposals for projects in 27 countries. Among the finalists:

  • Auaca Fund. A team from University College London proposes redirecting Brazilian payment on its sovereign debt to prevent deforestation and promote sustainable farming.
  • Water Credit Offset Bonds. To address water scarcity in the Colorado River basin, student’s from UC Berkeley’s Haas School of Business designed blockchain-enabled, variable-rate bonds based on water credits.
  • HIV Fighter Fund. A special purpose vehicle to incentivize joint ventures between global pharmaceutical companies and drug manufacturers in sub-Saharan Africa would ensure the supply of lifesaving drugs under a proposal from a team from Northwestern’s Kellogg School of Management.
  • Soilsurance. Farmers can earn discounts on their crop insurance premiums with soil-building practices; improved farm resilience reduces payouts, says the team from Columbia Business School.
  • Village Savings and Agriculture Insurance. A team from the agriculture factory at Gulu University in Uganda proposes to underwrite crop insurance for smallholder farmers through village savings and loan agencies.
  • Saarthi. A team from the University of Connecticut and Yale’s School of Management, designed a social enterprise to provide social services, job training and loans to victims of domestic violence in India in exchange for a share of future income.
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Scotland’s Solasta Bio’ secures £4 million for sustainable agri-inputs. The global market for insecticides is dominated by synthetic pesticides that are harmful to the environment and may even undermine food production. Glasgow-based Solasta makes environmentally-friendly insect-control products based on neuropeptides that can identify and remove insects that are harmful to plants, leaving unharmed pollinators like bumblebees and butterflies. With biodiversity as well as climate benefits, the biotech venture is targeting a “huge white spot in the current market offering,” said Tijl Hoefnagels of Rubio Impact Ventures, which participated in the pre-Series A financing. “Solasta is right in the sweet spot of what we want to invest in.”

  • Commercialization. Solasta’s pre-Series A investment round was led by Yield Lab Europe. Also participating, in addition to Rubio Impact, were Cavallo Ventures and Scottish Enterprise. The company has trialed its product and is looking to build operations in the UK and the US ahead and launch commercially in 2027.
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Dealflow overflow. Other investment news crossing our desks:

  • The Powering Renewable Energy Opportunities program, managed by Carbon Trust and Energy 4 Impact, invested in five African startups: Kenyan electric motorcycle maker Ecobodaa; Kenyan affordable cold storage provider SokoFresh; Tanzanian electric three-wheel financier Tri; Nigerian lithium battery maker Hinckley Associates and clean energy lender Charm Impact. (PREO)
  • Collab Fund and Union Square Ventures led a Series A equity round for the carbon-capture startup Noya. The Inflation Reduction Act expanded tax credits for direct air-capture projects operating by 2033 to $180 per ton. (Collab Fund)
  • Inclusive edtech venture capital firm JFF Ventures backed Territoriumto expand the reach of LifeJourney, its AI-powered system to track students’ skills and credentials as they transition into the workforce. (Territorium)

Signals: Climate Intelligence

Four ways AI can boost climate finance in emerging markets. The success of the sober agenda at this week’s spring meetings at the World Bank – “Reshaping development for a new era” – hinges on the bank’s ability to address sovereign debt, economic recovery, climate change and other monumental issues. More and more responsible capital is urgently needed in markets vulnerable to both climate and economic shocks. In a guest post for ImpactAlphaManuel Bueno of Abt Associates and Darius Nassiry of Climate Finance Advisors argue that rapidly improving artificial intelligence tools could speed distribution of such capital. AI, they write, “can reduce barriers to climate finance by expanding opportunity sets, improving risk-return profiles, lowering transaction costs, and supporting quicker and better climate risk management and governance.”

  • Investment pipeline and design. “AI tools support more efficient pipeline-building for climate-related investments and more accurate and efficient climate due diligence, finding investment opportunities that others would miss,” Bueno and Nassiry write. Investment analysis that’s underpinned by AI can help investors and financiers appropriately structure deals around climate risks and opportunities.
  • Inclusive climate finance. AI-based financial tools can support greater inclusivity in climate finance, for example, by bridging language gaps for speakers of minority and Indigenous languages. But care must be taken that the tools don’t replicate and amplify legacy assumptions and biases, the authors say. “Investments and partnerships are needed now to avoid the potential downsides of and actively drive greater inclusion and responsible data management in emerging markets.”
  • Keep reading, “Four ways AI can boost climate finance in emerging markets,” by Manuel Bueno and Darius Nassiry.

Agents of Impact: Follow the Talent

Paul Bodnar, former global head of sustainable investing at BlackRock, joinsBezos Earth Fund as director of sustainable finance, industry and diplomacy… PitchBook invites investors to participate in its 2023 sustainable investment survey… Capital Good Fund seeks a consultant to help develop, design, and implement a new solar leasing program for low-and moderate-income homeowners. Respond to the RFP by April 28. 

Women’s World Bankingis hiring a development and strategic partnerships director… Accionis looking for an operations fund manager for its Accion Impact Management team…  Duke Universityhas an opening for an energy and climate policy director in Durham… KACE Companyseeks a corporate social responsibility manager in Ashburn, Va.

Goldman Sachsis recruiting an impact measurement lead and associate in New York… Maroon Invest Globalis on the hunt for a remote health and climate venture fund partner… Vontobel Asset Managementis hiring an impact and ESG equity research analyst in Zurich… The Vistria Group, which added new offices in Dallas and New York last year as part of its geographic expansion, is opening up a new office in Chicago.

RSF Social Finance’s Erika Williams, Inclusive Capital Collective’s Najah Daniels and Derek Peebles of the American Sustainable Business Network will join a virtual panel on how BIPOC fund managers are building restorative finance models, Wednesday, April 19… The Bipartisan Policy Centerwill hosta virtual discussion on ESG and the politics of retirement later today at 2pm ET.

Thank you for your impact.

– April 13, 2023