The Brief: Tools for moving capital with a racial-equity lens

Greetings Agents of Impact! It was great to see all the energy and activity on yesterday’s call, “Sharing the wealth through employee ownership.” Check Friday’s Brief for the recap and the replay. – David Bank

🎥 ImpactAlpha in-person. We’re going on the road next month with our mini-doc, “Equity and ownership” and “Re:Construction – a playbook for shared prosperity.” You’re invited to Durham, NC (Friday, April 4), Washington, DC (Tuesday, April 8) and Boston (Saturday, April 12).

In today’s Brief:

• Collaborating across financial sectors to invest in racial equity
• Special purpose credit programs face ‘elimination’
• Rivian’s micro-mobility spinoff
• Japan’s trust-based advantage 

Featured: Returns on Inclusion

Collaboration among asset allocators can move capital toward inclusion, repair and regeneration. Major players, from Wall Street to Big Tech, are retreating from racial equity pledges and commitments made in the wake of the 2020 deaths of George Floyd, Breonna Taylor and Ahmaud Arbery.  The Trump administration is attacking law firms and universities to root out diversity, equity and inclusion – nonprofits, foundations and corporations expect to be targeted next. Yet every action has a reaction. “Many investors across the capital spectrum remain active and committed to advancing equity over the long-term – not in spite of, but because of, the likely resistance and retrenchment that lie ahead,” Erika Seth Davies of The REAL, Jade Huynh of Tideline and Bert Feuss of Community Capital Advisors write in a guest post on ImpactAlpha. In an earlier guest post, RPCK’s Chintan Panchal offered practical advice for raising a fund in a post-DEI world. Now Davies, Huynh and Feuss offer readymade tools, including corporate diversity data, the investment case for backing diverse managers and roadmaps, for asset owners and managers seeking to deploy capital to advance racial equity.

• Collective action. A survey by the three organizations late last year found that support for racial equity-lens investing remains strong and tools to support it are available. What’s needed to advance racial equity and justice in the financial markets, they say, is a common language and more collaboration across financial sectors. “Endowments speak to other endowments. Commercial asset managers speak to other commercial asset managers. Insurance companies speak to insurance companies,” the authors observe. “Amid legal and regulatory challenges, an absence of collective discussion and organizing creates friction and puts individual investors, managers, and the practice of racial equity-lens investing at risk.”
  

• Immersive strategies Racial equity-lens investing is defined as capital allocation strategies that account for “the systemic exclusion of racialized people and communities, and are reconfigured with the aim of creating a capital system that contributes to inclusion, repair and regeneration.” Choosing to be a racial equity-lens investor requires “the incremental, internal work of reimagining a system that works for everyone,” the authors write. That requires deep “immersive” strategies, such as examining internal policies and practices, facilitating a more inclusive investment process, measuring and reporting against racial equity objectives, and advocating for change. “Visible,” but more limited, strategies, such as investing in managers of color and diverse-led enterprises, can also improve racial outcomes, the authors say. “Both are critically important.”
  
• Keep reading, “Collaboration among asset allocators can move capital toward inclusion, repair and regeneration,” by Erika Seth Davies, Jade Huynh and Bert Feuss on ImpactAlpha.

‘Special purpose credit programs’ face the axe. The Trump administration has moved to kill lending programs that help first-time homebuyers and minority-owned small businesses who had been disqualified for loans under discriminatory credit-scoring or real estate appraisal practices. For 50 years, banks and other lenders have created “special purpose credit programs” to redress past racial harms and economic disadvantages. The head of the US Federal Housing Finance Agency, Bill Pulte, ordered Fannie Mae and Freddie Mac, the quasi-public mortgage guarantors, “terminate” their SPCP programs, which have enabled banks, credit unions and other lenders to offer discounted interest and lower fees for specific demographic groups.

• Safe harbor. The 1974 Equal Credit Opportunity Act outlawed discrimination but allowed banks “to counter pre-existing discrimination that’s been baked-in to the economy,” as Next City’s Oscar Abello wrote in 2022. Courts have upheld the provisions many times. As recently as February 2022, federal officials actively encouraged more banks to create special purpose credit programs to expand access to wealth-building opportunities in home and business ownership.
  
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Dealflow: Deploy!

Rivian-spinoff Also rakes in $105 million from Eclipse for electric micro-mobility. Elon Musk is betting on robo-taxis. Rivian, Musk’s Irvine, Calif.-based EV rival, favors smaller, cheaper EVs. Rivian, which makes electric cars, pickups and commercial vans, is spinning out a micro-mobility business to “rethink small electric vehicles.” The new company, called Also, was incubated at Rivian and leverages its engineering to produce lighter-weight EVs. “Small electric vehicles will play a key role in efficient, clean and convenient mobility, opening new opportunities for people to get around quickly and with minimal impact,” said Rivian’s RJ Scaringe, chairman of Also’s board. Exactly what the new EVs, expected next year, will look like is unclear. 

• Green mobility. The new company attracted $105 million in funding from Silicon Valley venture firm Eclipse. It plans to launch next year in the US and Europe, followed by Asia and Latin America. US cities such as New York are battling traffic congestion with small, last-mile EVs. Startups like Circuit, based in West Palm Beach, Fla., are developing smaller forms of transit (see, “Startups seek the spotlight with mobility solutions”). Circuit works in 40 US cities to reduce congestion in crowded downtown areas, via on-demand electric public shuttle minibuses.
  
• Check it out.

I&P makes first energy investment in Zimbabwe. The French impact investment group Investisseurs & Partenaires, or I&P, invested in Bulawayo-based NeedEnergy, to optimize energy consumption for businesses and utilities. The startup developed an energy trading platform for microgrids, distribution grids and end users, and provides services to solar farms and virtual power plants for the mining and manufacturing industries in Zimbabwe and South Africa. NeedEnergy is the latest investee under I&P’s Digital Energy program, a six-year program launched in 2022 with funding from the EU and operated with the French development agency AFD and Gaia Impact Fund. 

• Pan-Africa expansion. I&P launched in 2002 to bridge the small business financing gap in Africa’s French-speaking countries. It is expanding to English-speaking countries, such as Nigeria. The firm also aims to seed and develop 10 impact funds across Africa. It has already supported the launch of five funds, including Sinergi in Burkina Faso and Niger and Teranga Capital in Senegal. 

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Dealflow overflow. Investment news crossing our desks:

• North Carolina-based Terrestrial Energy, which makes small modular reactors that generate industrial heat and electricity to power data centers, has merged with a special purpose acquisition company. (TechCrunch)

• Japanese paper and pulp maker Oji Holdings and Sydney-based New Forests launched the Future Forest Innovations Fund, an open-ended fund seeded with $300 million to acquire and manage plantation forests in Southeast Asia, North America, Latin America and Africa. (The Asset)

• Grow Indigo, a Mumbai-based startup which trains farmers on regenerative agriculture practices and links them to carbon markets, raised $10 million from British International Investment. (Grow Indigo)

• German solar provider Enpal, Team Global and Geschwister Oetker Beteiligungen invested €15 million ($16.2 million) in battery startup Theion, which uses upcycled sulfur to cut battery production costs and minimize environmental impact. (ESG Today)

• German development finance institution DEG re-upped its investment in Malta-based Mediterrania Capital’s fourth fund with €15 million ($16.2 million) to support medium-sized businesses in North and West Africa. (Empower Africa)

• Lululemon entered a multiyear partnership with California-based biotechnology firm ZymoChem to introduce bio-based nylon in its athletic wear products. (ESG Today)

Signals: Impact in Latin America

Michiko Kogure, JICA: Financing sustainable growth in Latin America (video). Japan’s International Cooperation Agency leads investments in sustainable development with what is today a rare resource: trust. USAID’s retreat under the Trump administration has left many projects, and impact funds, in Latin America with unfunded commitments. JICA, by contrast, is boosting investment in a region the organization views as essential to global development. “There is so much great potential in this region,” Michiko Kogure, who leads the private sector investments in the region for JICA, told ImpactAlpha in a video interview at last month’s Latin American Impact Investment Forum. Companies, funds and financial institutions in Latin America have a strong commitment to social justice, financial inclusion and climate change, she said. From Brazil to Mexico, the private sector is “a driving force to change society.” 

• In demand. Participants at the FLlI were courting Kogure to learn more about JICA’s commitment of up to $1.5 billion to the JICA Trust Fund, a fund managed by IDB Invest to co-finance projects in conservation, waste management, water, sanitation, financial inclusion, gender equality, social justice and rural development in Latin America and the Caribbean. The boost in lending capacity comes as JICA looks to grow its investment in impact funds in the region. JICA has backed four, including Monterrey, Mexico-based Dalus Capital and a climate fund from São Paulo-based GEF Capital Partners. Even in uncertain times, “we are always looking for good impact fund managers, and we want to do more now,” Kogure said. JICA’s mission, she added, “is leading the world with trust.” 

• Read the profile and watch the interview. 

Agents of Impact: Follow the Talent

Impact verification provider BlueMark acquired Caprock’s impact reporting platform, formerly known as iPAR, which allows investors to manage and report on the impact of their portfolios. Caprock, a multi-family office and registered investment advisory, will continue to use the reporting system with clients… Banyan Infrastructure adds Scott Dicke, formerly with the Montgomery Green Bank, as head of advisory services, and Marilee Shea, previously with Carta, as a sales account executive.

Carl Lennartson, previously with the Texas Workforce Commission, joins Social Finance as a data analytics associate… EYEAlliance seeks a managing director of private sector strategy… Viridian Group is recruiting a senior analyst of investment banking … Samvid Ventures is looking for a 2025 summer associate in New York… Rainier Climate is hiring a climate finance program director. 

MassMutual Catalyst Funds has an opening for an impact investment principal in Boston… The Nature Conservancy is on the hunt for an impact investing manager… Municipal Market Analytics launched a “Climate risk and municipal finance class” in partnership with the Intercontinental Exchange to prepare attendees to examine the impact of climate events on financing for cities and towns (take 10% off with code IMPACT10).

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

Thank you for your impact!

– March 27, 2025