The Brief

The Brief: Reinvigorating impact investing with ambition and pragmatism

ImpactAlpha ¡ October 6, 2025

Greetings Agents of Impact!

🔌 PluggedIn: Building an inclusive future for climate and capital. VC Include’s Bahiyah Yasmeen Robinson talks with ImpactAlpha contributor Sherrell Dorsey about unlocking capital for diverse leaders to drive impact alpha and accelerate climate solutions at scale. Get PluggedIn, tomorrow, Oct. 7 at 10am PT / 1pm ET / 6pm London. RSVP now. 

In today’s Brief:

  • Tideline’s Ben Thornley on “care” as the fourth pillar of impact investing 
  • Impact Evaluation Lab’s “impact authenticity score”
  • Parametric insurance against farmers’ climate risks
  • Advisors’ Corner: Three strategies for adding impact to a portfolio

Reinvigorating impact investing with pragmatism, clarity and ambition. Recent surveys from Morgan Stanley, BNP Paribas and Mercer show that investor demand for sustainable and impact investing remains high. But after “navigating market dynamics and pressure points,” the consultancy Tideline sees the need for a recalibration of impact investing grounded in pragmatism, clarity and ambition, Tideline’s Ben Thornley writes in a guest post on ImpactAlpha. At the Global Impact Investing Network’s annual Impact Forum this week, investors and other practitioners will confront backlashes to climate action, diversity and ESG, as well as lingering misperceptions about impact investing. “This is a really important leadership moment for impact investing,” the GIIN’s Amit Bouri told ImpactAlpha in a recent interview. Some managers eschew the impact label while still reaping performance benefits from impact strategies, ImpactAlpha’s Dennis Price reported from a gathering of venture capitalists in London. As investors gather this week in Berlin, Thornley says, “is it time to talk less about ‘impact investing’ in its narrow sense and more about investing for real-world impact outcomes?”

  • Do no harm. For Tideline, pragmatism means “a diversity of investors, strategies and investments to enable broader participation while upholding impact integrity.” Ambition requires investors to continually ask whether each deal can deliver deeper and more demonstrable outcomes, keeping the focus on real-world results. Clarity, he says, is “clear consensus and guidance on the boundaries of impact investing in order to strengthen market understanding and coordination.” Thornley calls for the impact investing community to apply these principles to the GIIN’s three pillars of impact investing: intentionality, contribution and measurement. He also suggests adding a fourth pillar: care – an investor’s consistent action to minimize harm. “We must confront challenges head-on and seize the chance to fortify a shared vision of growth with integrity,” Thornley writes.
  • Impact Authenticity Score. Impact Evaluation Lab, a new impact rating and assessment firm, is tackling a gap in trust that inhibits impact fundraising. Impact Evaluation Lab’s “impact authenticity score” measures the potential impact and financial outcomes of an impact strategy. “To get us into mainstream investing, it’s critical that we not face the same criticisms and make the same mistakes that have been made in the past,” Impact Eval’s Rob Brown tells ImpactAlpha, citing rampant “greenwashing” and misleading metrics that spurred the backlash to ESG investing. The New York-based firm, which is launching at the GIIN Impact Forum, has backing from Jim Sorenson, founder of Sorenson Impact Group and worked with the Sorenson Impact Institute at the University of Utah to develop its fund assessment framework (disclosure: Sorenson Impact Foundation is an investor in, and Rob Brown is a contributor to, ImpactAlpha). Learn more from ImpactAlpha’s Amy Cortese. 
  • Culture of transparency. Thornley says the reinvigoration of impact investing would include “a diverse market anchored in core principles and a culture of transparency and accountability,  fueled by innovation supported by coherent standards, data, and reporting, and reinforced by confidence built on demonstrable results.” That would demonstrate that “each impact investing strategy can achieve its specific goals – financially and in terms of impact,” he says. To help investors situate themselves, Tideline has prepared a grid that lays out “foundational” and “focused” approaches in each impact pillar. “We can debate labels and nomenclature,” Thornley says, “but in the current environment there’s no question our emphasis going forward must be on real results, the very real financial value-creation benefits of impact acumen and intelligence, and the real efficacy of business-driven impact solutions.
  • Keep reading, “Reinvigorating impact investing with pragmatism, clarity and ambition,” by Tideline’s Ben Thornley. 

Dealflow: Climate Adaptation

Catalyst Fund backs Mali-based OKO to insure farmers against climate risks. The disappearance of grant funding from USAID conversely helped the long-term business potential of Bamako-based OKO Finance, an early adopter of parametric insurance for farmers. Such insurance, which provides coverage and payouts en masse based on incident triggers, like a drought or wind speeds, can be more expedient and cost-effective than requiring policyholders to file individual claims. OKO launched in 2017 with parametric crop insurance policies for farmers in Mali and has funded its growth with several small seed equity rounds and a number of grants. The loss of USAID funding earlier this year “accelerated their trajectory into becoming commercially viable and more sustainable,” said Maelis Carraro of early-stage climate tech investor Catalyst Fund, which has invested $200,000. “The mindset for founders is shifting to how to make the business model work without grants.” 

  • Partnership model. OKO uses satellite data to assess weather patterns and sets payout triggers based on specific weather conditions. It sells its policies to farmers via agricultural input sellers or companies with farmer purchasing contracts. “Rather than trying to sell the policies to farmers directly, which is really hard, they integrate the covers within other products,” Carraro told ImpactAlpha (see, “Alt-credit and mobile-money apps give African fintechs a closeup view of climate risks – and opportunities”). OKO insures about 30,000 farmers in Mali, Angola, Cote d’Ivoire, Mozambique, Senegal and Togo and has paid out close to $500,000 in claims.
  • Climate resilience tech. Catalyst Fund’s investment includes $150,000 to help OKO onboard more microfinance institutions, agricultural input providers and commodity buyers. The remaining funds will be used for technical assistance and venture building support. OKO is among more than 20 other investments in Catalyst’s first fund, which adds a climate resilience lens to Catalyst’s focus on inclusive fintech in Africa. “What we see across the continent are innovators who can be leaders in climate action and not just recipients of support and aid,” said Carraro. “You can pilot solutions that can be scaled to the world.”
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MSquared secures $139 million for its second Equitable Housing Solutions Fund. The New York-based real estate impact fund reached a first close toward its goal of raising $250 million to invest in mixed-income housing developments in cities in the US. “By focusing on providing mixed-income housing in high-cost areas, the fund both addresses the breadth of the affordability crisis and capitalizes on an investment opportunity not otherwise available in the private markets,” said MSquared’s Alicia Glen. The former New York City deputy mayor launched the private equity firm five years ago to invest in “impactful affordable housing projects while supporting a much more inclusive and diverse real estate sector,” she told ImpactAlpha three years ago (see, “Trinity Church Wall Street commits $20 million to MSquared’s New York affordable housing fund”). MSquared’s investments target diverse developers, including women and people of color. 

  • Institutional impact. Investors in MSquared’s second Equitable Housing Solutions Fund include Trinity Church, Capricorn Investment Group, Citi Community Capital and Deutsche Bank. The fund has financed the development of 500 units of mixed-income housing, half of which will be affordable rentals. The projects, located in Dallas and Everett, Wash., are being developed by women-led development firms. MSquared’s first Equitable Housing Solutions Fund, which raised $200 million, has invested in 14 mixed-income development projects with a combined value of more than $1.5 billion. MSquared focuses on daycare centers, small businesses and other establishments built within commercial spaces. It incorporates sustainable housing practices.
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Dealflow overflow. Investment news crossing our desks:

  • Netherlands-based startup OpusFlow raised €3.8 million ($4.5 million) to automate quotes, scheduling, payments and inventory for installers of heat pumps, solar panels and other clean energy systems. (EU-Startups)
  • IDB Invest provided $75 million to anchor a sustainable bond from Banistmo in Panama. Banistmo is aiming to raise $100 million to provide credit to support climate resilience for women-led small businesses. (IDB Invest)
  • Climax Foods, a Berkely, Calif, maker of non-dairy cheese, raised $6.5 million in Series A equity from S2G Ventures and rebranded to Bettani Farms. (Bettani Farms)
  • Estonia’s Katana raised €14 million ($16.4 million) in an extension of its Series B equity round to support small and mid-sized businesses with inventory management. It’s backed by Cogito Capital Partners, the Fenton/Greer Family Trust, Northzone, Atomico, 42Cap and Lightrock. (Katana)

Impact Voices: Advisors’ Corner

Three easy ways to add impact to client portfolios without changing the risk profile. For financial advisors new to impact investing, introducing impact products into a portfolio can feel intimidating. What about risk? Returns? Client expectations? “You don’t have to overhaul a portfolio – or necessarily compromise on performance – to start aligning money with meaning,” reassures CapShift’s Will Mucci in the latest explainer in ImpactAlpha’s Advisors’ Corner, in partnership with CapShift. By making straightforward substitutions across core allocations, Mucci says, advisors can offer clients the same familiar risk-return profiles with the added benefit of measurable impact.

  • Three strategies. For short term allocations, move idle cash into insured community development banks and credit unions, which retain safe liquidity while financing small businesses, affordable housing and underserved communities. For fixed income investments, replace standard bond funds with ESG-integrated impact bond funds that provide diversification and yield while financing projects like renewable energy, affordable housing and clean water. And for a growth segment, consider allocating to private equity funds that focus on circular economy solutions – waste reduction, recycling, sustainable materials – that can deliver competitive returns alongside environmental benefits.
  • Keep reading, “Three easy ways to add impact to client portfolios without changing the risk profile,” by CapShift’s Will Mucci. Catch up on all of the “Getting Started” and “Deep Dive” resources on Advisors’ Corner.

Agents of Impact: Follow the Talent

Join ImpactAlpha at these upcoming partner events:

Acumen America welcomes Yichen Feng, former head of impact of Lumos Capital Group, as investment director… Boston Ujima Project promotes James Vamboi to deputy director… Natalia Leon, previously with Tent Partnerships for Refugees, replaces Carolina Puerta Ocampo as CEO of the Latin American Impact Investing Forum, or FLII… Perigon Wealth Management adds Jeff Gitterman and Eli Rauch of Gitterman Wealth Management as partners. 

Chi Ebodili, previously with BlackRock’s global Infrastructure Partners, joins LeapFrog Investments as an investor relations officer… Kauffman Foundation seeks an impact analyst in Kansas City, Mo… Incofin Investment Management is hiring a sustainable food investment analyst for the Latin America region… Transform Finance is hosting a webinar on social entrepreneurship through acquisition, Wednesday, Oct. 15.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Oct. 6, 2025