Greetings, Agents of Impact!
Hop on The Call. Human capital. Worker ownership. Community resilience. Get ready for The Year of the ‘S’ in impact policy with Cambria Allen-Ratzlaff of JUST Capital, Jack Moriarty of Ownership America, Jesse Van Tol of the National Community Reinvestment Coalition and hundreds of other Agents of Impact. New: Kyle Bligen, legislative aide to Rep. Juan Vargas, will preview the work of Capitol Hill’s new Sustainable Investment Caucus.
Join Fran Seegull of the U.S. Impact Investing Alliance and ImpactAlpha’s David Bank to tee up policy strategies and actionable opportunities, today at 10am PT / 1pm ET / 6pm London. Zoom right in (no RSVP required, but you will need to sign into your Zoom account).
Call context. Background reading and listening for The Year of the ‘S’:
- “Move over, private equity. Here comes worker ownership”
- “New rules to account for a key corporate asset: employees”
- “How Project Equity is turning employees into owners” (podcast)
- “Finding opportunities for impact investors in the State of the Union” (podcast)
Featured: Institutional Impact
University of California’s rescue of Blackstone’s REIT exposes rot at the core of institutional asset management. If pension fund fiduciaries are making investment decisions that negatively impact their beneficiaries by, say, driving up the cost of housing, should that impact have some bearing on their decision-making? That’s the question at the heart of the flap over the UC Regents’ $4.5 billion investment in the Blackstone Real Estate Investment Trust. “It’s hard to escape the feeling that something has gone horribly wrong when giant sums of money are made by the asset management billionaires at the top of the heap, while the union members of the pension plans they are managing, and profiting from, can’t afford homes,” ImpactAlpha contributing editor Imogen Rose-Smith writes in her latest Institutional Impact column.
Rose-Smith, a former investment fellow at the Regents’ investment office in Oakland, Calif., dissects last month’s investment committee meeting where labor and other stakeholders took on Chief Investment Officer Jagdeep Singh Bachher over the Blackstone allocation. To “push those hard-earned dollars into investments designed to push housing prices even higher is beyond negligent,” said AFSCME’s Kathryn Lybarger. Blackstone CEO Stephen Schwarzman, meanwhile, took home $1.1 billion in dividends and compensation in 2021, one of Wall Street’s biggest-ever annual payouts. In its annual report, Blackstone acknowledges that public pension funds and other investors may withdraw capital or not commit it in the first place, “as a result of their assessment of our approach to and consideration of the social cost of investments made by our funds.” Here’s a thought, Imogen suggests: “What if we just stopped giving money to Schwarzman?”
- Keep reading, “University of California’s rescue of Blackstone’s REIT exposes rot at the core of institutional asset management,” by Imogen Rose-Smith on ImpactAlpha. Catch up on all of Imogen’s Institutional Impact columns.
Dealflow: Catalytic Capital
Opportunity International raises $101 million to catalyze loans to boost livelihoods in low-income countries. The Chicago-based nonprofit lender, in partnership with impact investors and development finance institutions, provides guarantees, interest-rate subsidies and other forms of catalytic capital to de-risk loans from local banks and lenders in 30 low-income countries. With the philanthropic raise, the nonprofit is looking to catalyze $1 billion in micro and small loans for 25 million borrowers in three years in countries such as Ghana, Uganda, Malawi, Mozambique, Colombia, Nicaragua and India. “Our clients are living on very little money in the informal economy and cannot pay the high interest rates,” Opportunity’s Atul Tandon told ImpactAlpha. The World Bank estimates the COVID-19 pandemic pushed more than 100 million more people into extreme poverty. “Our work is more important than ever as we’re seeing an increase in demand from our clients living in extreme poverty, most of whom are women in low-income countries,” Tandon says. Backers include the Bill & Melinda Gates Foundation, Cisco, Credit Suisse, Mastercard Foundation, USAID, philanthropic families and individuals, and corporate donors.
- Innovative finance. Last year, Opportunity provided catalytic capital to deploy $2.6 billion in education, smallholder farmer and individual loans. Loans range from as low as $25 to as high as $2,000. “In our education lending program, we have school proprietors who are getting loans to either build new schools or to add capacity in existing schools,” said Tandon. Via a partnership with Dutch impact investor Oikocredit, Opportunity International incentivizes local lenders to make loans for school infrastructure, teachers and tuition aid. Since 1972, Opportunity and its partners have disbursed $19 billion in loans.
- Digitalization. During the pandemic, Opportunity International set up call centers to let clients speak to service representatives in their own languages – and gained four million clients (for background, see, “Riding the digital transformation to drive inclusive and sustainable growth”). “A dramatic driver of that was moving from a physical to a mobile/digital interface with our clients,” Tandon says. Opportunity aims to reach 25 million in three years with an expanded digital presence and better data on its borrowers. Opportunity International secured a $175,000 grant from the Catalytic Capital Consortium, or C3, to de-risk micro and small loans for farmers and schools in low-income countries.
Dealflow overflow. Other investment news crossing our desks:
- Blue like an Orange invested $15 million in Financiera Contigo to provide micro loans and insurance to women-led enterprises in rural Mexico.
- Greyparrot, which uses artificial intelligence to sort and recycle waste products, raised $11 million in a Series A round backed by Regeneration.VC and Closed Loop Partners.
- Carbon Maps scored €4 million ($4.3 million) in a pre-seed funding to help the food industry track and reduce its environmental footprint.
- Italian biotech startup Ittinsect snagged €750,000 ($799,000) to develop a sustainable alternative to aquaculture feed in a pre-seed funding round backed by Katapult Ocean.
Signals: Impact Management
Streamlined, standardized and benchmarked: Optimizing impact data for capital markets. It’s the data wonks’ time to shine. With more than $1 trillion in impact investing assets under management, investors are demanding better impact data. “Investors need clear, consistent, and comparable information on both the positive and negative impacts of companies,” said Omidyar Network’s Chris Jurgens. The Tipping Point Fund, backed by Omidyar and other donors, is backing 16 organizations to improve the comparability, standardization and disclosure of an investment’s impacts.
- Indices, scorecards, standards and registries. To boost comparability of impacts across a range of environmental, social and economic factors, 60 Decibels is expanding its microfinance social performance index. As You Sow is extending the reach of its S&P 500 racial justice scorecard. XBRL International is establishing a sustainability report registry. Common Approach’s impact data standard will help enterprises communicate their impacts to communities as well as investors.
- Systems-level impact. Others are helping investors assess the impact of systems-level strategies. The Investment Integration Project is building a framework to help investors measure their influence on systemic risks. Impact Frontiers will help investors incorporate systems-level considerations into decision-making. World Benchmarking Alliance will push adoption of its financial-systems benchmark to measure financial institutions’ performance against the Sustainable Development Goals.
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Agents of Impact: Follow the Talent
The ImPact is hiring an associate in New York… OpenInvestseeks a fixed-income ESG associate… i2i Ventures is looking for an investment associate in Karachi… EY-Parthenon Strategy is recruiting a manager of sustainable finance for the MENA region… CDP seeks a senior social media officer and senior communications manager… Aramark is looking for a sustainability manager in Beaverton, OR… At One Ventures is hiring a climate VC associate… Groundworks USAseeks a remote director of climate and land.
HER Fundis looking for a programme manager in Hong Kong… State Streethas an opening for an ESG marketing and communications director… The Esmée Fairbairn Foundationis hiring a London-based funding manager… Catalyst 2030is recruiting a remote senior finance lead… DBS Bankis looking for a sustainability executive director or senior vice president in Singapore… World Economic Forumis hiring an ethnic equity and social innovation specialist in Geneva, Switzerland… Norrsken Foundationis recruiting a head of global strategic initiatives in Stockholm.
The Milken Instituteselects 16 students for its HBCU Fellows Program to train and match students with internships at asset management firms…. Atlantic Councilseeks applicants for The Climate Leadership Program, to accelerate the careers of climate finance leaders across the U.S., China, European Union, and African Union… Oxford Impact Measurement Programmeseeks applicants interested in learning how to measure and manage social and environmental impact… Just Economy Institute is accepting applications for its 2023-2024 cohort of fellows… Grantham Institute is launching “Just Finance India,” Tuesday, Feb. 28.
Thank you for your impact.
– Feb. 22, 2023