The Brief | April 4, 2023

The Brief: The Liist of eight impact funds, livelihoods for Ukrainian refugees, renewables in South Africa, speaking up for workers in the Year of the ‘S’

ImpactAlpha
Photo credit: NESsT
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ImpactAlpha

Greetings, Agents of Impact! 

Featured: The Liist

Impact managers craft fund strategies to restore lands and oceans. The 53rd annual Earth Day is coming up on April 22. Private investors are more engaged than ever. This month’s Liist of eight impact funds currently raising capital highlights new strategies for restoring land and marine ecosystems, while building healthy, resilient food systems and communities. Two funds in Latin America with unique impact-aligned profit models are acquiring degraded and under-valued farmland and boosting productivity by converting the land to regenerative agricultural practices. Asymmetrica Investments, in Mexico, will give farm workers a cut of the profits. In Brazil, fund management partners Vox Capital and Regia are tying their remuneration to their success in implementing regenerative techniques. Latin America, home to some of the world’s most biodiverse – and vulnerable – forestlands, is a hotbed for regeneration-focused impact investing (see, “Latin America’s impact entrepreneurs find opportunities in nature-based solutions and smarter services for low-income consumers“). 

Also on this month’s Liist: 

  • Positive Ventures in Brazil is raising its first venture capital fund, a portion of which will be invested in companies developing “planet positive” solutions, such as waste and water management and efforts to support a low-carbon transition. Its remuneration, too, is tied to impact: the firm must maintain its B Corp status.
  • In Europe, Ocean 14 Capital is in the final stretch of fundraising for its €150 million ($164 million) fund to invest in sustainable marine ecosystems and ocean-based food production.
  • In the U.S., Capital Good Fund is raising a small loan fund to help low- and middle-income families and BIPOC households reap the benefits of the renewable energy transition with home solar and battery storage systems. Rethink Capital Partners is eyeing a much bigger fund to invest in tech ventures seeking to improve the environmental sustainability, nutrition, affordability and racial equity of food systems.
  • In Africa, two funds are supporting the continent’s homegrown impact tech entrepreneurs. Verod Capital and Kepple African Ventures are partnering on a $100 million fund for tech ventures in mobility, climate resilience and other sectors. Jaza Rift Ventures is raising a pilot fund for early-stage health tech entrepreneurs who are making healthcare in Africa more relevant, affordable and accessible.

Dealflow: Refugee-Lens Investing

NESsT brings its livelihoods solutions to refugees from the war in Ukraine. The San Francisco Bay Area social enterprise incubator and investor is adapting its livelihoods expertise for the nearly four million people seeking refuge in Poland and Romania. NESsT will support up to 15 social enterprises to create 3,000 good jobs for refugees through a $3 million initiative supported by IKEA Social Entrepreneurship and the Cisco Foundation. NESsT’s Refugee Employment initiative will offer recoverable grants of up to $100,000 and provide additional funding for soft-skills training, housing assistance, visa paperwork, medical care and psychological support. “When you’re investing in vulnerable and underserved people, you need to make sure that you provide a very holistic package of support,” NESsT’s Nicole Etchart told ImpactAlpha. “A lot of people are coming out of dramatic circumstances and situations of injustice and racism. There’s a lot of support that’s needed.”

  • Good jobs. The six enterprises in the initiative’s initial cohort include Poland’s Mamo Pracuj Foundation, which is helping refugee women and mothers access high-growth careers, and Nebucode, which will teach IT skills and development to marginalized students. In Romania, Box Elyte, a manufacturer of eco-friendly cardboard packaging for chocolates and pastries, provides English language and computer skills training for refugees. “These are enterprises that have good green practices and are providing quality jobs,” said Etchart.
  • Dive in. 

Decentral Energy Managers scores $12.1 million for clean energy in South Africa. The Johannesburg-based independent power producer plans to increase its renewable energy generation capacity to 50 megawatts to meet demand from at least 30 commercial and industrial customers in South Africa. “Customers benefit from substantial energy cost savings, a decreased reliance on the national energy grid, and considerable carbon footprint reductions,” said Decentral Energy’s Luel Culwick. Decentral Energy developed, owns and operates over 10 megawatts of solar assets and has 500 megawatts of clean energy assets currently under development. The equity round was backed by Flyt Property Investments and Anuva Investments. Lion’s Head Global Partners provided advisory services with support from USAID’s Power Africa initiative. 

  • Energy crisis. South Africa is in the midst of a power crisis. The country’s debt-plagued state utility and poorly maintained, mostly fossil fuels-based power plants can’t keep pace with demand. A Just Energy Transition Partnership, backed with an initial $8.5 billion from the U.S., U.K., French and German governments and the European Union, seeks to accelerate the country’s transition away from coal by incentivizing clean energy investments.
  • Check it out.

Dealflow overflow. Other investment news crossing our desks:

  • Paris-based Effy secured €20 million ($22 million) from Felix Capital to provide energy retrofits for homeowners in France. (TechCrunch)
  • Evoco, a Toronto-based manufacturer of plant-based, sustainable materials, raised C$12 million (US$ 9 million) in a Series B round led by Circular Innovation Fund. (Evoco)
  • Cowboy Clean Fuels snagged $7.5 million in Series A funding to produce renewable natural gas from agrifood waste. (Colorado Inno)
  • Access to Capital for Entrepreneurs will use a $5 million grant from the Rockefeller Foundation to catalyze $30 million in loans for underserved entrepreneurs in Atlanta. (Rockefeller Foundation)

Impact Voices: ESG Backlash

Get ready: ESG critics are coming for ‘S’ issues. Human capital management disclosure. Worker ownership. Historic levels of federal funds flowing to rural and low-income communities. ImpactAlpha’s Agents of Impact Call. No. 49 highlighted the groundswell of activity supporting workers and equitable economic opportunities (see, “Policymaking for workers and communities in the Year of the ‘S’“). But this is no time for impact investors to rest, warns Fran Seegull of the US Impact Investing Alliance in a guest post on ImpactAlpha. Republican critics of environmental, social and governance, or ESG, investing, are expanding their attacks to “S” issues. Seegull identifies three lines of attack that impact investors should be ready to counter: state-level legislation restricting the consideration of social factors in decision-making; shareholder proposals discouraging racial audits and other “S” issues; and pushback on regulatory rulemaking.

  • Coming showdown. Bills in Oklahoma, Utah and Missouri would ban state contracts with companies that have taken public stances on issues like access to abortion and gender-affirming healthcare. Lawmakers in Kansas, Wyoming and Iowa seek to prevent fiduciaries from considering issues such as board diversity and employee compensation in contracting and investment decisions. Public attacks by Republican legislators and right-leaning business groups have helped delay the final release of the Security and Exchange Commission’s climate disclosure rule (don’t expect it until late spring at the earliest). Similar obstructive tactics are likely around the SEC’s pending human capital management disclosure rules.
  • Speaking out. Calls to action are an important input into SEC rulemaking and future legal challenges. Collaborative efforts and sign-on letters also send the signal that there is broad support for action on “S” issues. “Research has shown that ‘S’ issues — especially how companies treat workers, customers and their communities — are overwhelmingly popular among Americans across political divides,” says Seegull. That should give impact leaders “the confidence necessary to speak up and speak out on a range of social issues.”
  • Keep reading, “Get ready: ESG critics are coming for ‘S’ issues,” by Fran Seegull on ImpactAlpha.

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

Zineb Bennani, Mirova’s global head of business development, will become CEO of Mirova U.S. in May… Reinvestment Fund is on the hunt for a chief financial officer in Philadelphia… The Patrick J. McGovern Foundation is looking for a remote strategy analyst… Carbon removal nonprofit Terraset seeks an executive director… The Packard Foundation is hiring a mission investing analyst in Los Altos, Calif. 

Social Finance has openings for an associate director and an impact investments director in Boston… The Global Impact Investing Network is recruiting an investors’ council and leadership initiatives director, a partnerships management and donor relations associate director, a climate solutions director, and a membership associate and corporate impact investing associate… Also, in New York, Capricorn Investment Group is recruiting an investment analyst.

Swedfund is looking for an impact analyst in Stockholm… Transition VC is hiring a startup ecosystem manager for an energy transition accelerator in Bangalore… VC Include is accepting applications for its 2023 fellowship for historically underrepresented first-time fund managers… Preventable Surprises is holding its spring master class featuring “Moving Beyond Modern Portfolio Theory” author Jon Lukomnik on Monday, April 10.

Thank you for your impact.

– April 4, 2023