Greetings, Agents of Impact!
👏 RSVP for The Call: Optimizing for Impact. Get up to speed on impact measurement and management in a hands-on workshop with Duke University’s Cathy Clark and special teaching assistants Beth Bafford of Calvert Impact Capital and Courageous Capital’s Laurie Spengler. Join Agents of Impact Call No. 31, Tuesday, Sept. 28 at 10am PT / 1pm ET / 6pm London. RSVP today.
- ICYMI. “Managing investments to meet goals for impact – and expectations of regulators,” by Cathy Clark on ImpactAlpha.
Featured: Climate Week
The sky-high value of cutting methane emissions is attracting policymakers – and investors. Carbon dioxide has gotten most of the attention in the fight against climate change. But it is another compound, methane, that is responsible for about half of the 1.1-degree-Celsius net rise in the global average temperature since the start of the pre-industrial era. Methane action is emerging as perhaps the most tangible and immediate way to curb global warming in the crucial decade ahead. Just this week, the U.S. and Europe launched a campaign to cut methane emissions by 30% by the end of the decade. U.S. lawmakers are considering a plan to assess a fee of $1,680 per ton for methane emissions. “If we have price signals in the market, we can have robust schemes and credits that allow folks to minimize and offset or neutralize their emissions, and most importantly we can price in the real costs of doing business,” said Stephan Nicoleau of FullCycle, an investment firm that focuses on technologies that mitigate short-lived climate pollutants, or SLCPs, including methane.
- Full accounting. A study by Resources for the Future found that even modest methane fees of $500 to $1,500 per ton would result in substantial reduction in methane leaks with little impact on prices. A key issue: how to get an accurate measure of emissions. Escaped methane emissions from the oil and gas industry may be undercounted by 60% or more, according to the Environmental Defense Fund. Satellites and software technology are helping to better detect, predict and measure methane emissions, making it harder for polluters to hide.
- Keep reading, “The sky-high value of cutting methane emissions is attracting policymakers – and investors,” by Amy Cortese on ImpactAlpha.
Sponsored by Morgan Stanley
Innovations selected for Sustainable Solutions Collaborative. Learn how Morgan Stanley is helping to advance breakthrough innovations for global sustainability. Meet the cohort.
Dealflow: Follow the Money
Big-name investors donate their stakes as Change.org converts to a nonprofit. The San Francisco-based company, which hosts more than 70,000 petition campaigns per month, secured equity donations from more than 50 shareholders and will be 100% owned by the nonprofit Change.org Foundation. “This secures the long-term stewardship of Change.org as a digital public utility committed to the public interest,” Change.org’s Ben Rattray, Nick Allardice and Preethi Herman wrote on Medium. More than 90% of investor equity was donated. The B Corp will redeem the remaining investor shares, and also pay off employee options at a valuation set through an appraisal. Rattray told ImpactAlpha the nonprofit conversion is aimed at entrenching Change.org’s social mission even more deeply than the company could as a public benefit corporation and a certified B Corp.
- Mission-driven investors. Bill Gates, Richard Branson, Ray Dalio, Ashton Kutcher, Sam Altman and Jerry Yang are among the investors who agreed to contribute their shares. LinkedIn founder Reid Hoffman, who invested $30 million in Change.org in 2017, helped lead the conversion effort.
- Dig in.
Uganda’s gnuGrid pivots from solar data to financial data. Kampala-based gnuGrid launched in 2019 as a data and payments intermediary for home solar providers and microgrid operators and their customers. The company uses sensors to help solar providers monitor and predict customer energy usage, and collects digital payments from customers. The company raised seed funding of $612,500 from individual investors to apply its data capabilities to credit rating to unlock financing for low-income and rural Ugandans. It has become a Bank of Uganda-licensed credit reference bureau. “gnuGrid has the system necessary to onboard the millions of unbanked/tier four consumers in Uganda – all of Africa, actually,” founder David Opio said.
- Paying for solar. Nigerian fintech venture Infibranches Technologies secured $2 million from Shell-backed impact investor All On to help both small and large-scale solar providers collect digital payments. Off-grid solar lender SunFunder offered a $4 million loan to Malawi’s Yellow for its pay-as-you-go and pay-per-use home solar systems.
- Plug in.
Microsoft and Truist Financial anchor a federal fund for community banks with $120 million. The Mission-Driven Bank Fund from the U.S. Federal Deposit Insurance Corp. will provide capital to minority depository institutions and community development financial institutions that provide financial services to minority, lower-income and rural communities. “One of the things that I heard in the beginning, and in particular for Black banks, was a lack of capital,” FDIC chair Jelena McWilliams told CNBC. “Finding good capital to come to the banks was the No. 1 thing.” Discovery joins Microsoft and Truist Financial for a combined commitment of $120 million.
- Fund manager. The anchor investors are in the process of hiring a fund manager and expect to reach a first close by year’s end. Eligible banks will be able to share their pitches early next year. Commercial banks could also potentially receive Community Reinvestment Act credit for investing in the fund.
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Dealflow overflow. Other investment news crossing our desks:
- Leonardo DiCaprio invests in cultured-meat companies Mosa Meat and Aleph Farms. The actor’s portfolio of sustainable food ventures and social enterprises also includes sustainable seafood company LoveTheWild and Guatemala-based home solar venture Kingo.
- France’s Vestiaire Collective, an e-commerce platform for second-hand fashion, raises $209 million from Softbank’s Vision Fund 2, Generation Investment Management and existing investors.
- Astanor Ventures invests in Paris-based Calyxia, which is making a biodegradable alternative to microplastics.
- Seattle-based Omnidian secures $33 million for its residential and commercial solar systems that are backed by performance guarantees.
Impact Voices: Waste Management
Africa’s eco-startups seek to turn the tide on plastic pollution. Demand for plastic has soared in Africa. “When a problem is on your doorstep, it’s only natural to be compelled to find a solution,” Constance Agyeman of Nesta Challenges writes in a guest post. From co-operatives of individual litter-pickers, upcycling businesses that craft items out of plastics, and large-scale waste-management companies, the continent’s entrepreneurs are finding innovative ways to combat Africa’s plastics problem. What is needed to deliver change at the pace the continent needs, argues Agyeman, is “commitment from the innovation community and investors to grow and scale.” Given the proportion of women involved in the plastics-recycling value chain, investors would do well to direct funding toward women-led startups, she says.
- Plastics entrepreneurs. The Government of Canada and Nesta Challenges have launched the CA$14.5 million (US$11.4 million) Afri-Plastics Challenge to identify these innovators and entrepreneurs. By funding and equipping home-grown startups actively working to solve the plastics problem, Agyeman says, investors can “empower African entrepreneurs to build up businesses that provide employment and benefit the regional economy while tackling one of the most critical environmental problems that the continent faces.”
- Keep reading, “Africa’s eco start-ups seek to turn the tide on plastic pollution,” by Constance Agyeman on ImpactAlpha.
Agents of Impact: Follow the Talent
ImpactAssets has promoted Sandra Osborne Kartt to managing director of investments, Nick Peters to director of investments, and Deb Parsons to managing director of business development… Hannah Schiff, ex- of Nuveen, joins Developing World Markets as director of impact… Josh Adeoye, ex- of University Teaching Hospital in Kano, Nigeria, joins Adjuvant Capital as an associate… Convergence has extended the deadlines for its Asia Natural Capital Design Funding Window (Oct. 29) and its Indo-Pacific Design Funding Window (Nov. 10).
The Investment Integration Project’s new advisory council includes Noel Pacarro Brown of The Conscious Wealth Management Group at Morgan Stanley, Robert Eccles of the Said School of Business at the University of Oxford, Yuko Koshiba of Japan Social Innovation and Investment Foundation, and Eric Stephenson of Align Impact, among others… The Marguerite Casey Foundation is hiring an administrative partner in Seattle… KPMG is holding a webinar to explore its new report, “Boardroom climate competence: Getting ahead of the curve,” today, at 11am ET.
Thank you for your impact.
– Sept. 23, 2021