The Brief | May 24, 2022

The Brief: Proxy showdowns, women’s power shortage, electric mobility in Africa, private credit in emerging markets, just homes in the U.S.

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Greetings, Agents of Impact!

👋 You’re invited: Fintech, crypto and financial inclusion in Africa. As the economic tide goes out, investors will see which of Africa’s fintech and crypto startups were swimming naked. More than half of all venture capital investment on the continent last year went to new consumer payments, banking, crypto and other services, many designed for first-time users. Products and underwriting tied to productive uses, rather than speculation and gambling, may prove the most resilient and sustainable. Join Olu Oyinsan of Nigeria-based Oui Capital, Nelly Chatue-Diop of Cameroon’s crypto-trading startup Ejara, Mercy Corps Ventures’ Scott Onder and other Agents to discuss the impact alpha in responsible financial inclusion on Call No. 43, Wednesday, June 1 at 8am PT / 11am ET / 6pm Nairobi. RSVP today.

Featured: Proxy Preview

Shareholders test their power with votes at ExxonMobil, Chevron, BlackRock and McD’s. It’s spring, and your fancy may lightly turn to thoughts of love – or summer vacation. Shareholder activists are focused instead on taking on management with at least 60 resolutions that will come to a vote this week at the annual meetings of some of America’s biggest companies. Amazon alone faces a dozen resolutions today. And because shareholder resolutions are merely advisory, activists at some companies are turning to binding board elections. But last year’s heady wins for environmental, social and governance proposals are giving way to a more mixed record this year. The votes “are going to serve as a fundamental test of investor resolve on the material risks of the escalating climate crisis and the economy-wide drag on sustainable growth from systemic racial inequities,” Majority Action’s Eli Kasargod-Staub told ImpactAlpha. 

  • Climate laggards. After last year’s successful board insurgency at ExxonMobil, Chevron is in the hot seat. A proposal last year asking Chevron to set emission-reduction targets in line with the Paris climate accord won 60% of the vote; the company has ignored the directive. Majority Action is calling for the ouster of Chevron CEO Michael Wirth and lead director Ronald Sugar. “This board must be held accountable,” said Massachusetts’ State Treasurer Deborah Goldberg.
  • Worker safety. Lapses in health and safety, and the death of an Amazon worker in the tornado that hit an Illinois warehouse in December, are spotlighting the retailer’s human capital management practices. New York City Comptroller Brad Landler, along with the New York State Common Retirement Fund and the Illinois State Treasurer, are urging investors to vote against Amazon directors Daniel Huttenlocher and Judith McGrath for failing to adequately oversee the company’s workforce practices.
  • Big smack. McDonald’s board of directors is failing shareholders and stakeholders with animal welfare violations, supply chain lapses, and “a hollow ESG agenda,” Carl Icahn wrote, launching his campaign to replace two directors. Advocacy group Shareholder Commons is asking McDonald’s to report on public health costs caused by antibiotics in its supply chain. Antimicrobial resistance could drain up to 3.8% of global GDP by 2050, the World Bank says – an impact comparable to the 2008 global financial crisis.
  • Beta stewardship. Shareholder Commons is making a broader point: The actions of one company can hurt an investor’s entire portfolio. The group is asking social media giant Meta to report on the systemic risks of disinformation, from vaccines to elections. Another proposal urges BlackRock to work against corporate activities that externalize social and environmental costs. Says Shareholder Commons’ Sara Murphy: “Corporate behavior can actually drag down your whole portfolio, even if it has really good effects on that one company’s balance sheet.”
  • Keep reading, “Shareholders test their power with votes at ExxonMobil, Chevron, BlackRock and McD’s,” by Amy Cortese on ImpactAlpha.

Featured: Institutional Impact

Tracing a line from the lack of diversity in asset management to the undoing of Roe v. Wade. ImpactAlpha contributing editor Imogen Rose-Smith used to keep a copy of William Butler Yeats’ “The Second Coming” pinned to her cubicle wall. “The best lack all conviction,” the poet wrote, “while the worst are full of passionate intensity.” And here we are once again, Rose-Smith says. The U.S. Supreme Court’s expected overturning of Roe v. Wade reflects deeper problems with the place of women in the U.S., and the world, she argues. That includes how we choose to deploy and allocate capital in today’s economy. “Institutional investors, from venture capitalists to pension plans, as well as banks and other capital-market participants, bear some responsibility.”

Dealflow: E-Mobility

India’s M Auto raises $20 million for electric mobility-as-a-service in Africa. Investing in the low-carbon transition of Africa requires solutions to alleviate poverty and uplift local economies. Chennai-based M Auto, a manufacturer of two and three-wheel electric vehicles with its own network battery-swapping stations, secured the investment from the Africa Transformation and Industrialisation Fund. The fund aims “to accelerate Africa’s industrial transformation and ecological transition while creating jobs and lifting people out of poverty,” said ATIF’s Shegun Adjadi Bakari (for context, see “High fuel prices spur Africa’s transition to electric mobility“). 

  • Africa’s EV transition. M Auto will hire locally and manufacture e-bikes and batteries in Togo and Benin, both of which have high demand for commercial two-wheel vehicles and “progressive government policy for domestic manufacturing in the energy transition,” said M Auto’s Yasmeen Yawaharali. The woman-led company will offer affordable rent-to-own options. M Auto says it already has 500 e-bikes in Benin and Togo, and is ready to deploy 3,000 more.
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IFC invests $30 million with Partners for Growth to deploy private credit in emerging markets. Uncertainty and aversion to risk are limiting the credit available for small and mid-sized companies in emerging markets, said IFC’s Paulo de Bolle. San Francisco-based Partners for Growth, which specializes in private lending for growth-stage companies in emerging markets, will invest the capital via a managed account. The fund manager will target fintech, software, e-logistics, health tech and life sciences companies.

  • Global portfolio. Partners for Growth has made over $1.2 billion in alternative debt investments in more than 220 companies globally. “We see some of the most compelling opportunities from emerging markets, where companies can create new categories and pioneer solutions that deliver impact,” said Partners for Growth’s Andrew Kahn.
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MacArthur Foundation commits $20 million for housing for justice-system involved people. Roughly one in four people experienced homelessness in the year before being incarcerated. Chicago-based MacArthur hopes a mix of grants and long-term loans can help four communities break the link between housing instability and incarceration. Through its Just Home Project, the foundation will provide $3.2 million in grants to Charleston County, S.C. , Minnehaha County, S.D., Tulsa County, Okla., and the City and County of San Francisco. Each community will be eligible for long-term loans through a $15 million pool of capital. Urban Institute will receive $1.8 million to administer the project and provide technical support.

  • Risk mitigation. By coupling grants and program-related investments, the Just Home Project aims to unlock local government innovation and absorb risks that housing providers are often hesitant to take. “Criminal justice reform cannot happen in a silo,” said MacArthur’s Laurie Garduque. In Charleston County, for example, officials will create a housing-first approach with supportive services for individuals impacted by homelessness and incarceration.
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Dealflow overflow. Other investment news crossing our desks:

  • The International Committee of the Red Cross raised $17.6 million to expand access to safe and affordable drinking water in the Democratic Republic of the Congo.
  • London-based Seabound scored $4.4 million in a seed round led by LowerCarbon Capital to build carbon capture tech for ships.
  • The Off-Grid Electricity Fund provided a loan to Digital Kap to install minigrids in Haiti’s northern cities.
  • Sylndr secured $12.6 million to build an online marketplace for buying and selling used cars in Egypt.

Agents of Impact: Follow the Talent

60 Decibels is hiring a remote senior business development manager… Eurosif is looking for an executive director… Morgan Stanley’s Global Sustainable Finance group is recruiting a vice president of products and solutions for the EMEA region, based in London… Boehringer Ingelheim seeks an impact investing manager… Accion Venture Lab is hiring an investment officer for Africa, ideally in Lagos… Generation Investment Management seeks an analyst for its growth equity team in San Francisco.

The nonprofit GreenWave is looking for an e-learning consultant for July to September… Nuveen Global Impact is recruiting an investment analyst in New York… World Resources Institute is hiring a corporate relations coordinator, a media specialist, and a planning, monitoring, evaluation and learning analyst, all based in Washington, D.C… USAID seeks a private enterprise/market systems finance officer for its Center for Agriculture-Led Growth.

Instiglio has openings in Bogota, Colombia and Rabat, Morocco… NeighborWorks Capital is recruiting a CEO in the Washington, D.C. area… The American Sustainable Business Network is hosting “Investing in communities through crowdfunding,” Wednesday, May 25… Members of the S.E.C. will vote on Wednesday on a proposal to clarify rules around funds labeled “ESG” or “sustainable.”

Thank you for your impact!

– May 24, 2022