Greetings, Agents of Impact!
Featured: Capitalism Reimagined
Turning pledges into policies to invest in Black Americans and multi-racial prosperity. Investors and executives can lead in many ways as they seek to fulfill their often heartfelt pledges to advance racial justice and dismantle systemic racism. One of the most effective and scalable: use their voices and lobbying power to advocate for policies that reduce racialized inequality and increase investments in Black communities, businesses, workers and people. Such policies, says Oakland-based think tank PolicyLink, are analogous to street corner curb cuts. Just as ramps and wheelchair access for people with disabilities benefit parents with strollers, travelers with roller-bags, skateboarders and bicyclists, “intentional investments in Black Americans have benefits that cascade out, improving the lives of all struggling people as well as regional economies and the nation as a whole.” A sampling of some of the ideas in play:
- Build an inclusive green economy. Investors and entrepreneurs are unlocking opportunities to share climate wealth by driving wages, savings and health generated by the low-carbon transition to Black and Brown communities hardest hit by pollution and climate change (see, “Solving for climate justice is giving these Black investors an edge in the green economy”). A federal infrastructure bill centered on climate justice could turbocharge the effort.
- Support small businesses and entrepreneurs. After a long decline, Americans are starting small businesses at record levels, and neighborhoods with high proportions of Black residents are leading the charge. The challenge is to turn a temporary blip into a long-term trend – and to help more of the new businesses survive. Among the fixes: targeted federal procurement policies, increased capital for Black-led banks and financial institutions, and stronger corporate mentorship and support.
- Capitalize community lenders. It took a global pandemic and economic shutdown to finally strengthen and scale the community development financial institutions, or CDFIs, and minority depository institutions that serve communities of color, rural and low-income areas where big banks cannot, or will not, lend. Earlier this month, the U.S. Treasury Department awarded the first tranche of $12 billion allocated to community lenders in last December’s COVID relief package – more money than the federal CDFI Fund has distributed since it was created in the 1990s (see, “With billions in fresh capital, community lenders step up to finance a more inclusive economy”).
- Repair Black farms. Decades of racial discrimination and predatory lending practices have robbed Black farmers of the ability to build prosperous businesses and multi-generational wealth. Congress approved $5 billion in debt relief and aid to Black farmers as part of the $1.9 trillion COVID relief bill. Not so fast. The first payments, due to go out this week, were held up by a lawsuit filed on behalf of white farmers who say the program is discriminatory.
- Mobilize for policy innovation. The best solutions are likely to come from those closest to the problems. Universal basic income, elimination of student debt, broadband access and food security cal all be seen through a racial-justice lens. “Any progress we see stands on their shoulders,” Omidyar Network’s Chris Jurgens says of the grassroots and racial justice organizations that for decades have led the fight for a more just, equitable and anti-racist economy (see, and listen to, “Mobilizing policies and power for an economy that works for all”).
Keep reading, “Turning pledges into policies to invest in Black Americans and multi-racial prosperity,” by David Bank on ImpactAlpha.
- Capitalism Reimagined. Join PolicyLink’s Michael McAfee and Mahlet Getachew, former Delaware Chief Justice Leo Strine Jr., U.S. Impact Investing Alliance’s Fran Seegull, Andres Vinelli of the Center for American Progress and hundreds of other Agents of Impact at “Rewriting rules and designing policy for the stakeholder economy,” Tuesday, June 29 at 10am PT / 1pm ET / 6pm London. RSVP now
Dealflow: Green Infrastructure
Buffalo Sewer Authority issues a $54 million environmental impact bond for stormwater management. Environmental impact bonds, or EIBs, reward investors for backing projects that achieve positive environmental outcomes. Baltimore, Atlanta and Hampton, Va. have used the pay-for-success mechanism to finance green infrastructure. Buffalo, N.Y.’s $54 million EIB, the largest yet, will fund rain gardens, tree plantings and permeable pavement to reduce runoff and improve water quality. An incentive: an “outcomes-based call feature” that lets the sewer authority save on financing costs if it replaces at least 200 acres of impervious surface by 2028. The projects are expected to create around 700 “family-sustaining” community jobs, says Buffalo Mayor Byron Brown.
- Pay for success. Morgan Stanley and impact advisory firm Quantified Ventures helped structure the bond. “Buffalo Sewer has incentivized itself to move swiftly with green infrastructure implementation,” says Quantified Ventures’ Eric Letsinger. The Ralph C. Wilson Jr. Foundation, the Community Foundation for Greater Buffalo and the Great Lakes Protection Fund backed the EIB’s implementation partner, employee-owned Environmental Consulting & Technology, to bring alternative financing structures to Buffalo.
Circulate Capital raises $14 million for recycling and waste reduction. Singapore-based Circulate Capital has been investing in solutions to keep plastic out of oceans and waterways since 2019 via its $106 million Ocean Fund (see, “Catalyzing capital to prevent plastic waste”). A new fund, Circulate Capital Disrupt, will target “upstream” innovations in materials, packaging and delivery methods that can cut plastic waste. “Applying climate-tech innovations to the plastics crisis may be the key to finally stemming the tide, and presents climate-focused investors with the potential for meaningful financial and impact outcomes,” said Circuate’s Rob Kaplan.
- Circular logic. ABN AMRO launched a €425 million ($507 million) Sustainable Impact Fund to invest in early and growth-stage companies pursuing circular economy, energy transition and social impact opportunities. Rheaply raised $2.2 million, led by Microsoft’s Climate Innovation Fund, to add carbon accounting to help organizations track and manage assets to maximize their reuse.
- Recycle this.
Abu Dhabi investor scores debt financing for 50-megawatt solar power plant in Togo. Dubai-based AMEA Power, a subsidiary of AlNowais Investments, acquires and develops clean energy assets in Africa, the Middle East and Asia. Its solar photovoltaic plant in Blitta, Togo, is expected to produce electricity for nearly 160,000 Togolese households. Construction is being supported by $12.7 million in concessional loans from West African Development Bank and $15 million from the Abu Dhabi Fund for Development. Check it out.
Signals: Catalytic Capital
What we know about Rockefeller Foundation’s grand ambitions for distributed energy. The Rockefeller and IKEA foundations this week jointly announced a commitment of $1 billion for off-grid energy development in energy-poor communities worldwide. The bigger goal: unlocking $20 billion by 2030 to address climate change and alleviate energy poverty. Rockefeller is aiming to secure half of that, or $10 billion, in time for the COP26 climate convening in Glasgow in November. The U.S. International Development Finance Corp. and International Finance Corp. have each pledged $2 billion (and Rockefeller has committed $200 million to de-risk the investments). The distributed renewable initiative is aiming to reach one billion energy-poor people and prevent one billion tons of greenhouse gas emissions by 2030. Rockefeller Foundation’s work in distributed renewables includes a partnership with Tata Power to build 10,000 rural mini-grids in India.
- Catalytic capital. For now, the $1 billion in philanthropic grants are being directed through Rockefeller’s public charity, RF Catalytic Capital. For the longer term, Rockefeller is helping establish a new vehicle to direct grants, concessional loans, patient equity and guarantees to de-risk mini-grids and other distributed renewable projects in emerging markets. “We need a vast quantum of capital to flow into distributed renewable energy projects,” Rockefeller’s Stefanie Fairholme told ImpactAlpha. “It takes a significant commitment to unlock these markets at a rapid pace and at sufficient scale.” (Disclosure: the Catalytic Capital Consortium, founded by Rockefeller, alongside MacArthur Foundation and Omidyar Network, is a sponsor of ImpactAlpha’s catalytic capital coverage).
- Green recovery. Rockefeller’s $500 million commitment, the largest grant in the foundation’s history, represents half of the $1 billion it pledged last October to “catalyze a green recovery” from the COVID-19 pandemic. The foundation is financing the commitment with endowment funds and proceeds from its $700 million bond issuance in September. IKEA Foundation has recently pledged a total of €1.5 billion ($1.8 billion) for initiatives in climate change mitigation, adaptation and greenhouse gas reduction. Target markets for the new distributed energy initiative include India, Myanmar, Uganda, Nigeria, Malawi, Sierra Leone, Indonesia and the Philippines.
- Even more.
Agents of Impact: Follow the Talent
The ImpactAlpha team wishes a very happy birthday to our perceptive and persistent podcast producer, Isaac Silk.
Warren Buffet resigns as a trustee of the Bill and Melinda Gates Foundation, but not before bestowing a $3.2 billion parting gift… U.S. Representative John Curtis (R-Utah) is leading a new congressional Conservative Climate Caucus… Nuveen, the investment management arm of TIAA, has an opening for a private equity associate of impact investing in New York… Phenix Capital seeks an investment consultant in Amsterdam… PGGM is looking for a sustainability and ESG expert in Utrecht, Netherlands… PwC is hiring an ESG strategy consultant in Johannesburg… Sustainalytics is hiring an ESG research associate in Mumbai.
The IFC is recruiting an investment officer for its financial institutions group in Lagos… Also in Lagos, Acumen is looking for a West Africa director… Social impact finance company Arth seeks a program and partnerships manager in Delhi… Milken Institute is hosting “Investing with Impact through Public Securities Markets to Finance the SDGs,” with Leila Fourie and Shameela Soobramoney of the Johannesburg Stock Exchange, Nasdaq’s Evan Harvey, BlackRock’s Quyen Tran, and Triodos Investment Management’s Rosl Veltmeijer-Smits, Thursday, July 8.
Thank you for your impact.
–June 24, 2021