Greetings, Agents of Impact!
It’s time for Metrics Madness. ImpactAlpha, in partnership with the Southern Reconstruction Fund, is kicking off a tournament to interrogate the range of metrics guiding investment strategies for bridging racial-wealth gaps and accelerating racial wealth-building. Southern Reconstruction’s FundOne, which is investing in emerging fund managers piloting investment strategies for inequality, climate justice and health equity in low-wealth and BIPOC communities, will stand in for the broader challenge of measuring and managing racial-equity investment strategies. Metrics Madness aims to bring together impact practitioners, investors, community members and other stakeholders to spur a dialogue – and to rank-order impact metrics and approaches.
- Nominate a metric. What’s the best indicator to use for tracking strategies to bridge racial wealth gaps and build racial wealth? Use this short form to nominate a metric to be included in next week’s bracket.
- Fill in your bracket. Over the next two weeks, we’ll flesh out the context and air out the debate. Outcomes over outputs! Extra points for interchangeability, universality and convertibility. Argue your case.
- Sort the field. We’re counting on you and other Agents of Impact to vote, rank – and reject – the possibilities and to forge a rough consensus around the most useful metrics.
- Join the Call. Southern Reconstruction Fund’s Napoleon Wallace (see, “Agent of Impact”) and leading lights of impact measurement and management will come together for the fun and fruitful finale of Metrics Madness, on Agents of Impact Call No. 50, Wednesday, March 29 at 10am PT / 1 pm ET / 6 pm London. RSVP today.
Featured: Institutional Impact
In Larry Fink’s letter to investors, ESG is the business imperative that dare not speak its name. You can forgive Larry Fink, once such a vocal proponent, for being reticent to utter the acronym ESG in yesterday’s annual letter to investors. That the BlackRock chairman – the embodiment of “woke capitalism” for critics on the right, and of business-as-usual for critics on the left – takes such pains to not directly use the phrase shows just how toxic things have gotten, ImpactAlpha contributing editor Imogen Rose-Smith writes in her latest column. At Davos in January, Fink lamented that the attacks had gotten personal. “It’s hard, because it’s not business any more. They are doing it in a personal way. They’re trying to demonize the issues.” The attacks are only ramping up. Florida Gov. Ron DeSantis and other conservatives have blamed the failure of Silicon Valley Bank on “woke capitalism” and diversity. This weekend, the state treasurer of Utah called ESG part of “Satan’s plan.”
But the ongoing embrace by the world’s largest asset manager of environmental protection, social responsibility, and corporate governance with regards to capital markets and business is apparent in almost everything Fink says. He explains BlackRock’s interest in the clean energy transition as both a source of macro economic risk and an opportunity for investment and innovation. “We evaluate all kinds of long-term investment risks that could impact portfolios – such as inflation, geopolitics, or the energy transition,” Fink writes. BlackRock’s bottom line makes clear that ESG is good for business. States, including Florida, South Carolina and Utah, have pulled a few billion in assets. But BlackRock saw inflows of $400 billion last year, including $230 billion in the U.S. Clients representing $500 billion in assets under management are using Voting Choice, BlackRock’s new vote-your-own proxy option. Some think BlackRock’s own voting record is too woke, others not woke enough. “Poor Larry, he just can’t win. Or can he?” Rose-Smith writes. “BlackRock will continue to walk the line on ESG, never satisfying its critics on the left or the right, but making money all the same. ESG is big business for BlackRock, even if Fink won’t call it by its name. At least, not right now.”
- Keep reading, “In Larry Fink’s letter to investors, ESG is the business imperative that dare not speak its name,” by Imogen Rose-Smith on ImpactAlpha. Catch up on all of Imogen’s Institutional Impact columns.
Dealflow: Financial Inclusion
Accion Venture Lab bets on ‘embedded finance’ in India, Pakistan and Indonesia. Lack of access to finance is a critical barrier to small business growth – and thus, to economic growth and job growth – in many emerging markets. Companies that support micro and small businesses in other ways, like inventory supply and logistics, are using their distribution power to extend complementary financial services (see,”How technology is disrupting small-business financing in emerging markets – in a good way“). One such example of “embedded finance” is Magma in India, which helps small and mid-sized manufacturers finance and procure raw materials, and connects them to buyers. The company is among the latest crop of investments by inclusive fintech VC investor Accion Venture Lab.
- Essential services. Accion Venture Lab also backed Indonesia’s Semaai, which operates a digital marketplace and lends to small agricultural suppliers. In Pakistan, Trukkr is providing financial services to small trucking companies. Despite economic volatility, “these are such essential services that we know businesses will continue to have these needs,” Accion Venture Lab’s Amee Parbhoo told ImpactAlpha (see, “Inclusive fintechs build on gains to help emerging market businesses weather the economic storm“).
- Opening capital channels. Embedded finance is where Accion Venture Lab sees an opportunity to move the needle on small business financial inclusion. “We’re seeing a range of new revenue models and lending partnerships stemming from the power of embedded finance,” Parbhoo said. Some, like Trukkr, are raising debt to lend off their own balance sheets. Others are partnering with larger financial institutions. “These companies have data and supply-chain relationships that are giving more comfort to lenders” that wouldn’t otherwise lend to such businesses, Parbhoo said.
- Check it out.
Los Angeles Cleantech Incubator backs ChargerHelp and Repurpose. South L.A.-based ChargerHelp will use the investment to increase the uptime and reliability of its third-party repair service for electric vehicle charging stations. The Black women-led company raised $17.5 million in Series A funding last month. L.A.-based Repurpose, which makes plant-based, compostable tableware and trash bags, will use the investment to expand its business. The company says it has kept over 3.5 million pounds of plastic waste out of landfills since launching in 2010. The investment by the incubator and fund manager will also help create green jobs at both companies.
- Inclusive climate tech investing. LACI made the investment through its newly-launched second fund, whose limited partners include former bodybuilder, actor and governor of California Arnold Schwarzenegger. The fund seeks to raise $30 million for women founders and founders of color in the growing climate tech ecosystem, which has been rattled by the collapse of Silicon Valley Bank (for context, see, “Climate tech and other startups exhale after the U.S. backstops Silicon Valley Bank depositors”). LACI in June last year raised a $6 million cleantech debt fund to provide loans of up to $250,000 to diverse founders.
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Dealflow overflow. Other investment news crossing our desks:
- RSF Social Finance extended a $5 million loan to Sunwealth to support 26 community solar projects in five U.S. states.
- Solarcycle raised $30 million in equity and infrastructure financing from Fifth Wall, Urban Innovation Fund, Closed Loop Partners and others to recycle and remanufacture solar panels.
- Gaia Impact Fund and Schneider Electric invested in Singapore-based Agros, which helps farmers in Cambodia and Myanmar cut fuel costs with solar power and restore soil health with more eco-friendly crop inputs.
- Germany’s Intelligent Fluids secured €10 million ($10.6 million) in Series B financing, led by WAVE Equity Partners, to develop non-toxic and biodegradable cleaning agents.
Signals: Stakeholder Capitalism
At these companies, CEOs focus on stakeholders to drive growth. Steve McDougal of climate consultants 3Degrees, Scott Jacobs of green infrastructure owner and investor Generate Capital, and Russell Diez-Canseco of organic produce purveyor Vital Farms topped Big Path Capital’s 2023 “Momentum 100” ranking of top impact CEOs. Big Path factors in revenue growth and social policies to showcase leaders of fast-growing climate tech and sustainable businesses that prioritize customers, communities and workers. “These leaders are demonstrating that every transaction has the potential for prosperity and positive impact,” says Big Path’s Michael Whelchel.
- Top of the charts. Also in the top rank: Aseem Das of natural packaging company World Centric, Tom Matzzie of CleanChoice Energy, and Melanie Dulbecco of beverage mix maker Torani. Finance sector CEOs that made the (male-dominated – we couldn’t help but notice) list include David Reiling of Sunrise Banks, Randell Leach of Beneficial State Bank, Thiru Vignarajah of Capital Plus Financial, Amir Kirkwood of Virginia Community Capital, John Sensiba of Sensiba San Filippo, and Jennifer Kenning of Align Impact.
Agents of Impact: Follow the Talent
Eric Wilburn has resigned as Earthshot Labs’ head of product… Connect Across Tacoma, co-led by Black Brilliance Research and University of Washington Tacoma, secures a $3 million grant from a Biden-Harris Administration initiative to promote digital equity and inclusion in nearby underserved communities.
The Climate and Land Use Alliance is looking for a strategic communications director in Colombia and Peru… The Ford Foundation seeks a mission investments technology fellow in New York… Also in New York, the Rockefeller Foundation has an opening for an executive director to lead the economic opportunity coalition secretariat… The Miller Center for Social Entrepreneurship is accepting applications for its June accelerator cohort.
Cisco Foundation is recruiting a climate impact investments portfolio associate in San Francisco… Arctaris Impact Investors is looking for a private equity investment analyst and associate… New Jersey Community Capital has an opening for a fund development specialist… Inconfin is on the hunt for an agro/food portfolio analyst in Bogota… Upaya Social Ventures seeks a remote communications manager… Starbucks is hiring a coffee sustainability data impact lead in Seattle.
Ceres will host its Ceres Global conference March 23–24 in New York. Speakers include U.S. climate envoy John Kerry, Generation Investment Management’s Al Gore, Bahiyah Robinson of VC Include, and Leslie Samuelrich of Green Century Funds… This year’s Africa VC Summit will gather Africa-focused fund managers and limited partners in Austin, Texas, on Friday, June 9.
Thank you for your impact.
– March 16, 2023