The Brief | July 29, 2019

The Brief: Quality jobs, Schroders acquires BlueOrchard, Indonesian cocoa livelihoods, ESG data rollups, farm waste to truck fuel

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Greetings, Agents of Impact!

Agents of Impact Call No. 10: Reporters’ Roundtable“S” is for Share the Wealth. Rising income inequality is a systemic risk. Good jobs, cooperatives, community ownership stakes in investment funds: a growing number of business and financial strategies aim to drive wealth down the economic pyramid. On The Call this week, ImpactAlpha’s editors and “special agents” will dig into the big themes driving ImpactAlpha coverage. Join a lively conversation that will take subscribers inside ImpactAlpha’s thinking. Thursday, Aug. 1st, at 10:00 am PT / 1:00 pm ET / 6:00 pm London. RSVP today.

Featured: Returns on Investment podcast

Impact investors have a quality jobs agenda (podcast). Even the chairman of the Federal Reserve wants to share the wealth. The headline of the New York Times’ account of Jerome Powell’s message to Congress: “The economy can get a lot better for workers.” In a low-unemployment economy, it’s not only jobs, but quality jobs that are needed to drive broader prosperity that is inclusive of workers of all ages and skills. In the latest Returns on Investment podcast, the roundtable regulars take up impact investing strategies to create jobs that provides good benefits, living wages and safe working conditions. Additionally, “quality jobs” provide equal opportunity and equal pay and training and career development opportunity. For real value creation, promote work-life balance and an engaging and transparent workplace culture. (Zeynep Ton’s Good Jobs Institute has assembled case studies of companies that pay employees more, are more productive and more profitable.)

The Fed’s implicit approval makes mainstream a proposition that might otherwise be dismissed as class-mongering – that for workers’ pay to rise, shareholders’ may get a smaller share of corporate profits. “It does provide a much more popular underpinning for this whole impact investing proposition, which could be at risk of getting pigeonholed as an elite affectation of rich people trying to feel good about themselves,” ImpactAlpha’s David Bankargues in the discussion. “The proof in the pudding is whether poor people get a better deal.” For impact investors, driving such social equity begins at home. As Delilah Rothenberg points out in the manifesto of her “Pre-distribution Initiative,” the wealth of the fund manager grows exponentially faster than the wealth of portfolio companies’ workers, exacerbating wealth inequality. “Instead of waiting until after that cycle of value-creation has concluded and trying to tax those fund managers more,” asks Liquidnet’s Brian Walsh, why not ‘pre-distribute,’ so that more workers get the financial upside of the value they create?

Read on, and listen in, to “Memo to candidates: Impact investors have a quality jobs agenda (podcast),” on ImpactAlpha.

Sponsored: Content by Tiedemann Advisors

Your impact investing journey: Finding the right financial advisor. Building a diversified investment portfolio is hard enough. Incorporating non-financial outcomes adds another layer of complexity. Investors don’t have to face the challenge alone. ‘Your impact investing journey’ is sponsored by Tiedemann Advisors. This series will explore the role of a financial advisor in helping clients navigate the many steps involved in building and maintaining an impact investing portfolio. The primer focuses on the essential topics and questions that are top of mind for high net worth individuals, family offices, foundations and other investors when starting out on their impact investing journeys. First up from Tiedemann’s Brad HarrisonFinding the right financial advisorStart your impact investing journey.

Dealflow: Follow the Money

Schroders acquires majority stake in BlueOrchard Finance. Schroders, with more than $500 billion in assets under management, took a majority stake in the Swiss impact investment firm. BlueOrchard got its start in microfinance two decades ago and now manages $3.5 billion across credit, private equity and sustainable infrastructure, and blended finance. The terms of Schoders’ acquisition were undisclosed. The London-based investment manager will help BlueOrchard expand and give Schroders additional reach into emerging market private debt and private equity investments. Patrick Scheurle will continue on as BlueOrchard’s board chair and CEO. Three Schroders executives, including chief executive Peter Harrison, will join BlueOrchard’s board. More.

Moody’s snaps up second ESG data company. The credit ratings and research firm acquired a majority stake in climate-risk analytics company Four Twenty Seven. Four Twenty Seven aggregates data on physical risks for thousands of companies, assets, counties and countries, and scores their climate exposure to help financial institutions, assets owners and managers assess risk in their portfolios. Four Twenty Seven’s data is “essential to understanding and informing climate risk and resilience measures,” says Moody’s Myriam Durand. It is Moody’s second recent acquisition focusing on sustainability data (In April, it acquired ESG research firm Vigeo Eiris), and part of a consolidation of data providers as investors demand more transparency and more sustainable investing products. Read on.

IIX leads seed round for Indonesian chocolate maker Krakakoa. Indonesian cocoa farmers only earn an average of $3 per day; the traditional cocoa value chain is slanted in favor of chocolate manufacturers. Krakakoa is among a growing number of niche chocolate makers working to improve smallholder cocoa farmers’ livelihoods through direct sourcing, fair pricing, and improving farm productivity with environmentally-friendly growing practices. The venture’s production facility trains and hires female factory workers. Singapore-based Impact Investment Exchange led the undisclosed seed funding to help Krakakoa scale its farmer network to 1,000 farms. IIX backed the company via its growth fund, which is targeting a $25 million raise. LIC VC and Jeremy Oppenheim, founder of sustainable investment fund SYSTEMIQ, also participated. Take a bite.

Amp Americas raises $75 million to convert farm waste to truck fuel. Each of the more than nine million dairy cows in the U.S. produces 65 to 115 pounds of manure per day. Chicago-based Amp Americas partners with dairy farmers to recycle that waste stream into a useable, clean energy product. It collects farms’ animal waste and converts it into biogas, then sells that biogas to trucking fleets. Since its launch in 2011, Amp Americas says it has displaced 324,000 metric tons of carbon dioxide. The company raised $75 million to expand from its existing three biogas facilities. Houston-based energy investor EIV led the round. Check it out.

Agents of Impact: Follow the Talent

ImpactAlpha is hiring: Director of Growth. Subscription revenues from passionate Agents of Impact have pushed ImpactAlpha past a crucial milestone: financial sustainability. Our new Director of Growth will drive subscription marketing to increase conversions and grow recurring revenues so we can serve such agents even better. Join ImpactAlpha’s team (and spread the word).

Nick Ashburn, ex- of Wharton Social Impact Initiative, joins PNC Asset Management as vice president and senior product manager of responsible investing… Walton Enterprises is recruiting a director of impact investing in Washington DC… ClimateAI is looking for a director of business development in San Francisco… The World Wildlife Fund is hiring a sustainable finance engagement manager of climate and energy investment and a sustainable infrastructure financing manager in Singapore… The UN Principles for Responsible Investment is hiring a relationships manager in Chicago… i(x) investments seeks an investor relations assistant in Los Angeles… SJF Ventures is looking for a senior analyst or associate in New York, the San Francisco Bay Area or Durham.

– July 29, 2017