Greetings, Agents of Impact!
Featured: Metrics Madness
Chasing the holy grail of a universal metric for racial equity and wealth-building. If the world manages in the coming decades to avert the worst-case climate catastrophe, it will be the result of one of the most ambitious coordinations in human history. The common metric: the reduction, in tons, of emissions of carbon dioxide and other greenhouse gasses. What is the equivalent of CO2 for the equally urgent and complex challenges of racial equity and racial wealth-building? “We are striving for a similar movement around racial justice for Black Americans,” Southern Reconstruction Fund’s Napoleon Wallace tells ImpactAlpha, which will take up the challenge in this week’s Agents of Impact Call. “What we haven’t been able to uncover is a pool of metrics that have such universality that they remain a meaningful measure of impact across investments,” Wallace says, “or a metric that could act as a common standard of exchange to allow us to interpret many metrics with a single measure.”
- Quality adjusted life years. A health economist advised Wallace to consider QALYs, an established (and sometimes controversial) metric of clinical efficacy that determines the impact of an intervention by assessing the ensuing duration and quality of life for patients after the intervention. Can such a metric, disaggregated by race, be applied to a wider set of social interventions? “I like the infrastructure and science behind QALYs,” Wallace says. “And the aspiration of delivering longer, healthier and happier lives is pretty all-encompassing as an outcome.”
- Wisdom of the crowd. Agents of Impact have contributed dozens of submissions in the two-week sprint to Metrics Madness. Caitlin Rosser of Calvert Impact cut to the chase to advocate tracking the increase in assets held by end-users or clients. “That’s what we’re trying to affect: increase in wealth (as measured by assets) for BIPOC clients,” Rosser says. Catherine Dun Rappaport of Social Finance considered the well-known “spectrum of community engagement,” applied a racial equity lens, and collapsed the framework to work in an impact investing context. Dimitri Triantafyllides of Sixty Guilders Management wants to track participation in 401k or IRA-type retirement investment plans. Syntegral’s Vijak Haddadi put the AI startup’s chatbot on the case and came up with five key strategies for racial wealth-building, including asset-building and banking reform. Bonus: a half-dozen frameworks and toolkits that standardize processes for investors.
- Join The Call. Racial Equity Asset Lab’s Erika Seth Davies, Partners in Equity’s Wilson Lester, and Kellogg Foundation’s Cynthia Muller join Southern Reconstruction Fund’s Napoleon Wallace and Dorian Burton and ImpactAlpha for the fun and fruitful finale to Metrics Madness on Agents of Impact Call No. 50, tomorrow, March 29, at 10am PT / 1pm ET / 6pm London. RSVP now.
- Keep reading, “Chasing the holy grail of a universal metric for racial equity and wealth-building,” by David Bank on ImpactAlpha.
Dealflow: Impact Tech
Factor[e] Ventures’ Delta40 scores early funding to build tech sectors in Africa. Investment is growing in tech sectors critical for Africa’s sustainable—and climate-resilient—development. But clean tech, agtech and mobility tech together still represent just 23% of venture capital in Africa. “There is a great opportunity at the formation stage to support local and diverse founders as they connect their technologies and markets,” said Morgan DeFoort of hardware-focused Factor[e] Ventures. The VC firm launched Delta40 to back Africa’s home-grown but underinvested solutions and entrepreneurs. The early-stage investor has support from Autodesk Foundation, the Global Energy Alliance for People and Planet and others.
- First cohort. Delta40s is led by Lyndsay Holley Handler, who headed the clean energy company Fenix International. The venture builder’s first cohort of six undisclosed startups is focused on Africa’s climate resilience and population growth. It’s applying a gender-lens to give female founders a boost. Startups led or co-led by women raised just 13% of VC funding in Africa last year. Delta40 will make early investments of $100,000 to $600,000, TechCabal reports.
- Track record. Factor[e] has invested in more than 30 emerging markets tech startups, including agri-fintech company Apollo Agriculture in Kenya, waste-to-fuel venture Sistema Bio in Mexico, e-mobility manufacturer Ampersand in Rwanda, and off-grid solar provider Zola Electric (also read, “Can off-grid solar keep focus on energy access for the poor as commercial capital arrives?“).
- Check it out.
Dealflow overflow. Other investment news crossing our desks:
- The U.S. International Development Finance Corp. is investing $100 million in WaterEquity’s fourth global access fund. DFC has also committed $10 million to Incofin’s Water Access Acceleration Fund (see, “Catalyzing capital for Africa’s water and sanitation infrastructure”).
- Fin, a South African neobank backed by Lendable, acquired fintech venture Thuthukani to help low- and middle-income South Africans secure home loans. (TechCabal)
- Climate-focused investor HASI backed Bioenergy Devco to spur waste-to-fuel anaerobic digestion facilities across the U.S. (Bioenergy Devco)
Six Short Signals: What We’re Reading
🌱 Institutionalizing climate-risk mitigation. More than eight out of 10 investors (83%) consider or plan to consider climate risk when making investment decisions, according to a Nuveen survey of 800 institutional investors. Almost three-quarters plan to increase allocations to private investments over the next five years. (Nuveen)
🤖 AI and climate. Reducing paperwork overhead for rebates. Optimizing vehicle movement to minimize carbon emissions. Discovering new molecules to replace fossil-fuel derived plastics. Climate tech wonks answer this question from HubSpot’s Brian Halligan: How will generative AI be applied to the climate crisis? (Brian Halligan)
🍔 Lessons from the plant-based bust. The takeaway from Zora’s Venessa Bartram: Beyond Meat’s enormous decline in market cap doesn’t reflect the failure of an industry. It tracks the return to planet Earth of an overhyped company in an overhyped stock market. (Vanessa Bartram)
👨🌾 Smart smallholder subsidies. Aceli Africa’s incentives are shifting lending practices in Africa’s fragmented agricultural markets toward smaller ticket sizes, new value chains, and more remote geographies. (Aceli Africa)
🏠 Opportunity Zone impact. Early achievements of the place-based policy: expansive geographic reach, large-scale private investment, and significant economic effects, according to Economic Innovation Group. Needed: supporting mission-driven funds, narrower investment criteria, and a broader scope of those who can invest, according to the Urban Institute. (Economic Innovation Group / Urban Institute)
💲 Maximizing investments in America. Trillions in federal funds are on the way. Among the ways state and local leaders can make the most of them: establish results management offices to centralize operations, increase coordination, track spending and monitor project milestones. (Governing)
Agents of Impact: Follow the Talent
Jen Sullo, former global head of sustainable investing solutions at Goldman Sachs, joins Earth Finance as managing director of asset management and investing solutions… Common Impact is looking for a chief program officer… Wetherby is on the hunt for an impact management analyst in San Francisco… Rethink Education seeks a senior associate in New York… Nonprofit Finance Fund has an opening for a remote underwriting specialist.
Symbiotics is hiring a Mexico City-based investment analyst for Latin America and the Caribbean… Steady Growth Ventures is recruiting a remote managing director… Schroders seeks a sustainable credit analyst in Frankfurt… New Markets Funds is looking for an acquisition manager in Montreal… FMO is recruiting a senior environmental and social officer in The Hague.
Luxembourg for Finance’s sixth annual Sustainable Finance Forum happens this week from March 29-30. U.S. climate envoy John Kerry is a keynote speaker… Impact Frontiers and The Predistribution Initiative seek input on their Investor Contribution 2.0 project, which is developing resources to help investors measure, manage and report on their positive and negative contributions to impact and systematic risk.
Thank you for your impact.
– March 28, 2023