The Brief | May 18, 2021

The Brief: Shareholder flex, Ulu’s Latino-led fund, decarbonizing buildings, refurbished electronics, banking Egyptians, greener crypto

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Greetings, Agents of Impact!

Featured: Climate Finance

Shareholders flex their muscles as drama builds for a showdown at ExxonMobil. Slowly and then all of a sudden, shareholders have management on the run in a series of proxy votes on climate and other issues. That has ExxonMobil’s directors squirming. In one week, climate activists notched as many majority votes on climate proposals as in “the entire history of the U.S. oil and gas industry,” notes Ceres’ Andrew Logan. At ConocoPhillips and its spinoff, Phillips66, large majorities of shareholders last week bucked management to approve shareholder proposals pressing for climate action. At Dupont’s meeting, 81% of shareholders asked the company to report on spills of plastic pellets, a major source of microplastics pollution. “I’ve never seen anything like it before,” Andy Behar of As You Sow, the shareholder advocacy organization that filed the Dupont resolution, told ImpactAlpha. “We’ve been planting the idea of shareholder empowerment, and with this wave, we’re starting to see that power.”

Exxon’s annual general meeting is set for May 26. The largest U.S. oil company is facing both inside and outside efforts to restructure its business. In March, Inclusive Capital Partners’ Jeffrey Ubben and another director joined Exxon’s board under an agreement with hedge fund D.E. Shaw. From the outside, another hedge fund, Engine No. 1 has waged a multi-million dollar campaign to shake up Exxon’s board with four candidates that bring energy industry and transition expertise. Supporting the board shakeup so far: CalPERS, CalSTRS, the Church of England, New York Common Retirement Fund, and asset manager Legal & General Investment Management. Last week, proxy advisor Institutional Shareholder Services endorsed three of the four “dissident” board candidates; Glass Lewis, the other big proxy advisor, is expected to follow suit. All eyes are on BlackRock, the second-largest institutional holder of Exxon’s shares. Activists have called out the world’s largest asset manager for a voting record they say fails to match the climate rhetoric of CEO Larry Fink.

Keep reading, “Shareholders flex their muscles as drama builds for a showdown at ExxonMobil” by Amy Cortese on ImpactAlpha. 

Dealflow: Returns on Inclusion

Ulu Ventures raises $138 million to invest in diverse early-stage founders. The Latino-led venture fund will invest in startups led by women, minorities, immigrants and other underrepresented founders. Investors in the fund include the University of Rochester and Grinnell College, Twitter, Motley Fool Ventures, MacArthur Foundation, Illumen Capital, Bank of America and Goldman Sachs. “Our investment in Ulu furthers our shared goal to increase access to capital and facilitate connections for women, Black, Latinx and other diverse entrepreneurs,” said Suzanne Gauron, head of Goldman Sachs’ Launch with GS (see, “Goldman Sachs commits $500 million to women-led businesses).

Cortex Intel raises $6 million to decarbonize commercial buildings. The New York-based company helps commercial building engineers run equipment more efficiently. The company’s software is used by buildings with more than 50 million square feet, including the Empire State Building. The energy-efficiency market “has taken a long time to develop in terms of the value of energy savings,” Dan Malven of 4490 Ventures, which led the Series A round, told Crunchbase. “The adoption by property owners is going to increase quite dramatically over the next couple of years.” Share this post.

Dealflow overflow. Other investment news crossing our desks:

  • Back Market raises $335 million for its electronics marketplace focused on reducing e-waste in a round led by General Atlantic and Al Gore’s Generation Investment Management.
  • Energy transition SPAC Freestone Acquisition, formed by Tailwater Capital, files for a $200 million initial public offering.
  • North African fintech Telda scores $5 million pre-seed funding to provide digital banking services for unbanked Egyptians.
  • Portland, Maine-based foodtech Forager secures $4 million to connect grocers and food retailers with local farmers and food producers across the U.S.

Signals: Greener Crypto

Bitcoin’s energy consumption has crypto investors seeking green alternatives. Elon Musk sent the cryptocurrency world reeling last week when he backpedaled on Tesla’s offer to accept Bitcoin as payment for its electric cars. Musk cited concerns “about rapidly increasing use of fossil fuels for Bitcoin mining and transactions.” Powerful computers that “mine” the digital currency by solving complex math problems consume massive amounts of energy. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s annualized energy consumption is currently 144 Terawatt-hours, or roughly 0.66% of total electricity consumption.  Estimates vary on how much Bitcoin is mined with renewable energy. Musk’s U-turn on Bitcoin has crypto investors looking for green alternatives.

  • Can a crypto ETF claim ESG status? A crypto exchange-traded fund was among the 10 exchange-traded funds with ESG labels that were filed with the Securities and Exchange Commission in April, according to an analysis for ImpactAlpha by Sustainable Research and Analysis. The SEC has been reluctant to approve cryptocurrency ETFs. For its part, the Viridi ESG Crypto Mining ETF claims to be reducing negative environmental impacts of mining. The fund will invest in equity securities of companies actively involved in cryptocurrency mining, manufacturing computer equipment and creating cryptocurrency themselves. Go deeper.
  • Green coins. Chia, a coin launched earlier this month by BitTorrent creator Bram Cohen, relies on unused disk space rather than computing power to validate financial transactions on its Chia Network blockchain. Chia’s founders claim the process is more decentralized and energy efficient. Cardano, Polygon, Cosmos, XRP, Nano, Polkadot, Stellar and other coins also are developing less energy-intensive validation mechanisms. Cathie Wood’s ARK Invest, one of Tesla biggest proponents, calls Musk’s concern with Bitcoin’s energy consumption misguided. “We believe the impact of bitcoin mining could become a net positive to the environment,” the ETF manager wrote in a note to investors.
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Agents of Impact: Follow the Talent

Bryan Kalbfleisch, ex- of Summit Materials, named chief executive officer… Richard Hunter, previously with Bombardier Transportation, joins Ørsted as chief operations officer… Beam is hiring for a senior leadership role in operations in London… Robeco is looking for a corporate sustainability officer in Rotterdam, Netherlands… Rural Innovation Strategies seeks a chief operations officer in Hartland, VT. 

An impact fund created by NBA All-Star Jrue Holiday and his wife, former U.S. women’s soccer player Lauren Holiday, opens applications for $1 million in grants for Black-led nonprofits and businesses in Milwaukee, New Orleans, Indianapolis and Los Angeles. 

Thank you for your impact.

– May 18, 2021