The Brief | January 24, 2023

The Brief: Municipal bond activism (Q&A), bioplastics and revenue-based loans in Latin America, green bond in Vietnam, GOP governors tack to the center on ESG

The team at


Greetings, Agents of Impact! 

Featured: Muni Impact

‘You can’t do impact on a passive basis’: Q&A with municipal bond investor Eric Glass. At AllianceBernstein, Eric Glass and his team raised and deployed more than  $1.4 billion in the firm’s municipal impact strategy, which invested only in underserved and low-economic-status communities. Then came Alabama’s 2021 bond offering to finance public and private prisons. Glass participated in an ongoing campaign to undermine that offering, in part by noting that some of the investment banks involved had previously pledged to avoid underwriting private prison deals. Glass left AllianceBernstein and now advises Justice Capital on strategies to help align the voices of historically-excluded communities with financing approaches. “You can’t do impact on a passive basis,” Glass tells Andrea Riquier in a Q&A for ImpactAlpha. “You need to engage.” He is preparing to launch a fixed-income investment platform to address disparities in the built environment. Rich communities can access markets and optimize the lowest cost of capital, says Glass. Historically disinvested communities are often penalized in the financial markets. “How can I partner with those communities to expedite and to speed up the change so that we reverse decades, if not centuries, of disinvestment?”

  • Bondholder engagement. When a bond is first issued, portfolio managers have a few days to press issuers for answers to tough questions. “That’s the opportunity you have to engage with the bank and with the issuer around their ideas, why their capital plans include what they include, whether they are including historically-underserved communities or not,” Glass says. “It’s one thing to make an investment but it’s another thing to use the leverage you have as an investor to expedite the change that the community wants. That to me is the definition of being an impact investor.”  
  • Justice capital. “The way in which capital is allocated is broken,” Glass says. “It has become wealth-building as opposed to community-building.” Optimizing for results in the allocation of capital means both financial returns and the betterment of communities. “That’s the way I look at my job and the world and capital markets.”
  • Join the conversation. Meet Eric Glass, along with Ryan Bowers of Activest, Diane Manuel of Adasina Social Capital and other Agents of Impact on next week’s call, “Investable opportunities in high-impact municipal finance,” Wednesday, Feb. 1 at 10am PT, 1pm ET / 6pm London. RSVP today.

Dealflow: Revenue-Based Finance

Acceso Impact Fund raises $4.5 million for impact businesses in Central America and the Caribbean. The evergreen fund is a partnership between Guatemalan investment manager Grupo IDC and Alterna, which aims to build an ecosystem of impact businesses in Central America. With revenue-based loans and a gender-lens, Acceso is looking to provide working capital for businesses led by, employing or serving women. Loans of up to $1 million would be repaid within five years at a fixed rate of up to 5% of yearly revenues, Acceso’s Margarita Klose and Ruthmarie Mayen told ImpactAlpha. “If they don’t sell anything, then they don’t have to pay anything,” Mayen said. “For us, when you give businesses capital that they need to grow in a way that is flexible to them, then you make an impact.” The women-led fund received a $3 million allocation from IDB Lab, half of which has been matched by Grupo IDC. Grupo IDC plans to raise at least $1.5 million this year to fully match IDB Lab’s commitment. Acceso, which launched late last year, is looking to raise at least $10 million. Alterna and IDC will cover Acceso’s management expenses for the first two years.

  • Sustainable investing. Acceso plans to invest in up to eight businesses this year in Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Panama and/or the Dominican Republic. Acceso will look for businesses with between $500,000 and $3 million in yearly revenues. The fund has backed three companies, including Guatemala’s Cassa, a sustainable construction company using natural materials like bamboo to build homes, and sustainable textiles companies Luum and Meema.
  • Dive in.

BioElements secures $30 million for bioplastics in Latin America. Chile is one of a small number of countries in Latin America that ban or restrict certain single-use plastics. Santiago-based BioElements is betting that demand for green alternatives in the region will increase as countries move away from single-use plastics. The company’s resin-based materials decompose in landfills and compost bins in as little as six months. The financing, led by Brazilian investment bank BTG Pactual, will support BioElements’ plastic alternatives for the broader food and beverage industry. “Packaging is an important social and environmental problem, and investors are also seeing it that way,” said BioElements’ Ignacio Parada.

  • Green polyester. Separately, Fairbrics in Paris is making the carbon-intensive synthetic material greener by recycling CO2 emissions in the manufacturing process. Roughly a third of the fashion industry’s carbon emissions come from polyester production, the company says. Fairbrics secured a €17 million ($18.5 million) grant from Horizon Europe, the E.U.’s €95.5 billion research and innovation program, to build a demonstration plant. The company’s pilot partners are kicking in an additional €5 million.
  • Check it out

Dealflow overflow. Other investment news crossing our desks:

  • The European Bank for Reconstruction and Development is lending €25 million ($27.1 million) to Morocco’s Banque Centrale Populaire to provide green-project loans to small businesses. 
  • Bridges Fund Management is developing a chain of short-stay healthcare facilities called Renaiss Health for postoperative patients. Its first facility will be in Richmond in southwest London.
  • Vietnam’s Gai Lai Electricity has issued a $9 million green bond with support from Symbiotics to develop renewable energy projects. 
  • The state of Hawaii is putting up a $100 million climate fund to draw in federal and private investment in the state’s clean energy capacity. 

Impact Voices: ESG Backlash

Local economic benefits spur GOP governors to tack toward the center on ESG. Attacks on the integration of environmental, social and governance factors in business and finance were a staple of many Republican candidates’ stump speeches last year. Now a safe distance past the midterm elections, a chorus of traditionally conservative governors, some with eyes on the White House, are striking a notably more centrist chord, writes Manifest Social’s Ryon Harms in a guest post on ImpactAlpha. “Is having world-class transparency and governance a good thing?” asked Virginia Gov. Glenn Youngkin, a Republican. “Yes, it’s a really good thing.” New Hampshire Gov. Chris Sununu said, “I’m a free market guy,” explaining, “If a business wants to be woke, I don’t agree with it… But it’s not up to the government to come in and punish a business or penalize a business.” And Georgia Gov. Brian Kemp, welcoming electric-vehicle and battery makers to the state, said he doesn’t see EVs as climate action. “It’s just letting the market work.”

Market hypocrisy, political opportunism, and the common good. Citigroup this month lost the right to bid on and participate in the underwriting of municipal bond deals in Texas after running afoul of a state law that “bars most government contracts with companies that engage in anti-gun business practices,” according to Texas Attorney General Ken Paxton. Such bans squash competition and raise the cost of capital for taxpayers, while “gun violence continues ad-infinitum with devastating human, community, economic and financial consequences,” Eric Glass, an advisor to Justice Capital, writes in a guest post (see Q&A above). Glass’ plea to Citigroup’s Jane Fraser and other capital market CEOs: “Let’s collectively agree (buyer and seller alike) to strengthen our resolve in the face of myopic, inhumane and craven political opportunism.” 

Agents of Impact: Follow the Talent

Eliane Ubalijoro, ex- of Sustainability in the Digital Age, will become, in May, the first African female CEO of the Center for International Forestry Research and World Agroforestry…  Sarah Gordon, founding CEO of the U.K.’s Impact Investing Institute, will step down to join the London School of Economics as a visiting professor… BlocPower is recruiting a business development associate in New York… Jlens seeks a managing director and an ESG research director.  

The Nature Conservancy is hiring a program manager for a social impact partnership in Arlington, Va and looking for a lead for freshwater conservation and management projects in Kenya… Conservation International seeks a senior director for climate policy… The U.S. International Development Finance Corp. is looking for three directors for its investment funds program by Feb 1… British International Investment has an opening for an investment executive for asset allocation and capital solutions in London. 

Climate Power is looking for a remote managing director of communications… Antora Energy seeks a communications and policy manager in Sunnyvale, Calif… SPI Energy has an opening for a remote director of investor relations… DEPLOY/US is recruiting a philanthropic acceleration director… The Environmental Defense Fund is hiring a remote fishery solutions director… The City of Newark is looking for a chief sustainability officer.

Publish What You Fund will release its DFI Transparency Index and host “How transparent are development finance institutions?” featuring Margaret Kuhlow of the U.S. Treasury Department, Elizabeth Boggs Davidsen of the DFC, Olivier Shingiro of the African Development Bank, and others, in partnership with Brookings Institution, tomorrow, Jan. 25… The Milkywire Climate Transformation Fund, launches a call for proposals for durable carbon removal, nature restoration and protection and decarbonization… Discovered Markets’ “Creating change through communications” course begins Monday, Feb. 13.

Thank you for your impact.

– Jan. 24, 2023