The Brief | July 5, 2023

The Brief: Sequestering carbon in family forests, curbing e-waste in Africa, financing climate adaptation, connecting capital to communities

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Greetings, Agents of Impact!

Featured: Nature-Based Solutions

Sequestering carbon in America’s family forests. Tim Stout was thrilled when he inherited 175 acres of boreal woodland surrounding his family farm in Rutland County, Vt. a few years ago. But a forest is a complex heirloom. Woodlands require active stewardship to keep plant and wildlife populations strong and invasive species at bay. And unlike a set of flatware, there are annual property taxes. Stout enrolled in the Family Forest Carbon Program, an initiative of The Nature Conservancy and the American Forest Foundation that bankrolls forest owners with as little as 30 acres by generating and selling carbon credits. Small owners control nearly 40% of US forestland, but have been largely excluded from carbon markets, which cater to forests of 5,000 acres or more. “We cannot afford to overlook family forest owners any longer,” says the University of Minnesota’s Matt Russell. The family forest program is one of several helping small-scale US forest owners manage their land to sequester carbon, support biodiversity and reduce wildfire risk.

  • Federal boost. Since 2020, the Family Forest Carbon Program has paid 327 landowners to increase carbon soil sequestration or avoid carbon loss across 48,000 acres. San Francisco-based NCX has helped generate $2.5 million in carbon offset payments for some 4,400 small forest owners in the same timeframe. The efforts are getting a boost from the Inflation Reduction Act, which provided $450 million to the US Forest Service to help private landowners  commit to climate-focused forestry. 
  • Carbon credibility. Carbon-market critics argue that offsets provide cover for polluting industries without actually removing CO2. Flawed methodologies can overestimate the impact of projects, some of which have been declared “largely worthless.” The Nature Conservancy’s Jim Shallow says its program sets aside non-tradable credits to buffer against carbon stock losses from wildfires or other events, an increasing risk. “We pay landowners to implement practices that scientifically deliver carbon benefits and sell carbon credits only after verification,” he says. “This is real carbon, not hypothetical.”
  • Keep reading, “Sequestering carbon in America’s family forests,” by Marcello Rossi on ImpactAlpha.

Dealflow: Circular Economy

Revivo seeks to support African shopkeepers to curb e-waste. Consumers discard more than 58 million tons of phones, tech gadgets and other electronic waste each year. Kenya’s Revivo supports local electronic repair shops with a marketplace for spare parts and refurbished devices. Shopkeepers can buy the products on consignment, paying only when the goods are used or sold. Revivo has sold an estimated 45,000 products to shops since launching last year. It raised $635,000 in pre-seed funding from climate-focused impact investor Satgana, Raba Partnership, Village Global, Musha Ventures and angel investors. 

  • Affordable devices. Repair and refurbishment makes pricey smartphones and home solar systems more affordable. Revivo says a new cell phone costs roughly one month’s income for many Kenyans; “a repair costs about 10% of that.” Said Revivo’s Sarah Johnson, “By building a strong repair economy we can make the use of these devices more affordable while reducing their negative impact.”
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BlueOrchard secures $50 million for climate adaptation in emerging markets. The Schroders impact investing group is among the few investors directing capital to climate adaptation in vulnerable countries. BlueOrchard’s second InsuResilience Fund, in partnership with German development bank KfW, aims to expand access to affordable climate insurance products.

  • Crop insurance. BlueOrchard has backed two companies with the second fund: Singapore-based Igloo, whose insurance products include protection for smallholder farms in the Philippines and Vietnam, and Brazil’s Newe, a parametric insurance provider whose products provide automatic relief to smallholder farmers when struck by certain types of natural disasters.
  • Adapation finance. BlueOrchard made nine equity investments with its first InsuResilience fund. It says the fund’s portfolio companies have reached more than 48 million people in 45 countries. Separately, the firm is raising a planned $250 million fund to invest in climate adaptation and mitigation, water protection, and biodiversity in emerging markets.
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Dealflow overflow. Other news crossing our desks:

  • ​​Opes Italia backed Sicilian edtech venture Develhope’s €6 million ($6.5 million) round to provide online skills training in Turkey, Spain, Kenya and other countries with high youth unemployment. (Contexto)
  • Verod-Kepple Africa Ventures invested $1.5 million in Chari, a Moroccan e-commerce company that offers embedded finance to small food and retail businesses. (Disrupt Africa)
  • Milestones: Ujima Fund has invested $1.3 million in seven diverse-led businesses in Boston’s underinvested neighborhoods through its community-led investment approach. (Boston Ujima Project)

Overheard: Salzburg Global Seminar

Complexities in connecting capital to communities. There is no such thing as a single-issue struggle, because we do not live single-issue lives, as the poet Audre Lorde once said. The challenges of providing for basic human needs such as food, water and housing are likewise interconnected. “Maybe financial intervention is not the thing. Instead, maybe the intervention is something else entirely,” Murray Gray of Netherlands-based impact consultancy Metabolic wrote in his reflections on the recent “Connecting capital to communities” gathering at the Salzburg Global Seminar in Austria, sponsored by the Robert Wood Johnson Foundation. ImpactAlpha is producing a series of podcast conversations with delegates (the first two featured Vienna’s Michaela Kauer on the city’s affordable housing model and FarMart’s Samridhi Singh on connecting Indian farmers to global markets).

  • Absorptive capacity. “We see the capital is not getting to the communities where it needs to go,” said Robert Wood Johnson’s Kimberlee Cornett, citing the capital absorption framework developed by Robin Hacke of the Center for Community Investment. The refrain of “too much money, not enough projects” rang hollow to many delegates, particularly from the Global South. “Where we come from, there isn’t capital. It isn’t there. It doesn’t want to come there,” said Glen Jordan of Empowa, which is developing a rent-to-own model for affordable housing in emerging markets, starting in Mozambique.
  • Community-led. The word “community” has almost talismanic power in social-change discussions. Yet advocates have to accept that communities may have different, or conflicting priorities. Resilience Capital’s Triple B framework attempts to tackle such power dynamics, identifying bottlenecks and blind spots as well as blended capital solutions. “How much do we value nonfinancial capital?” asked Resilience Capital’s Cathy-Mae Karelse. “How much do we attach value to the fact that our communities have knowledge and wisdom?”
  • Keep reading, “Overheard at Salzburg Global Seminar: Complexities in connecting capital to communities,” by David Bank on ImpactAlpha.

Agents of Impact: Follow the Talent

First Sentier Investors appoints Sudip Hazra as director of the First Sentier MUFG Sustainable Investment Institute… AXA IM Alts promotes Laurent Lavergne to global head of sustainability, taking over for Justin Travlos, who steps down later this year… BerlinRose has an opening for a social impact and investing vice president. 

Temasek is hiring a strategy, mandates and impact director in Singapore… Also in Singapore, GenZero is on the hunt for a carbon sales and management vice president… RBC Capital Markets seeks a New York-based vice president of renewable energy tax credit syndications… Enzia Ventures is recruiting a venture capital analyst or associate in Bangalore. 

Social Enterprise Finance Australia is looking for a temporary social finance relationship manager in Sydney… ClimateWorks Foundation has several openings, including a San Francisco-based sustainable finance associate director… Southern Methodist University secures a $1.7 million grant from Phillips Foundation to establish the SMU Impact Lab.

Thank you for your impact.

– July 5, 2023