Greetings, ImpactAlpha readers and happy Independence Week. In the U.S., and elsewhere, it was a time to remember, or not, what America stands for.
In this week’s Returns on Investment podcast, our regular roundtable was reflective, if not somber. For all the progress in shifting investments, asked Imogen Rose-Smith, where is the popular movement in support of the inclusive, sustainable, global agenda? “If there is this utopian opportunity out there,” she wondered, “why has this populism and anxiety manifested at the same time?”
My stubborn optimism, I admitted, is born of desperation as well as enthusiasm. What else to do but spotlight the entrepreneurs, investors and communities who aren’t waiting to create the positive alternative future? See below for: food progress, smart cities and impact opportunities in the emerging market of … Puerto Rico. The impact vision may well be utopian, I allowed, but utopian may be what we need to keep moving the market forward.
That frame of mind no doubt came through in my column on the long-awaited tipping point in climate finance. Even strong signals that renewables are on the upswing and fossil fuels in decline do not make the low-carbon future inevitable. Projects still must be developed, capital deployed and systems transformed. After this midsummer night’s dream, let’s get it done.
– David Bank, editor
Featured: The Brief’s Big 7
1. The Impact Alpha: The climate-disclosure era begins. It’s fitting that September’s Global Climate Action Summit is in California, effectively another country. In the runup, the Climate Action 100 initiative is mobilizing institutional investors to pressure “systemically important greenhouse gas emitters,” or SIGGEs, in their investment portfolios to disclose climate risks and develop action plans. Global pools of capital like the $180 billion Ontario Teachers Pension Plan and the $64 billion UniSuper in Australia are signing on. “We are doing this because serious financial risks are in play across the global economy” says Anne Simpson of the $350 billion California Public Employees Retirement System. The strategic shareholder pressure is intended to turn key companies from laggards to leaders and flip the market. Are $30 trillion in assets among 229 signers enough? Tipping point.
2. Populist podcast. Any movement of investors is inherently elitist. “Impact investing privileges capital and capitalism,” declared Imogen Rose-Smith, a University of California investment fellow, in the latest Returns on Investment podcast. “The challenge ahead is to deepen inclusion, engagement and participation of stakeholders in the global project, and expand the popular constituencies in support of the Paris climate agreement and the Sustainable Development Goals,” argued ImpactAlpha’s David Bank. “That is the global platform, and it’s on the run, and we need to shore it up. What’s our alternative?” Listen up.
3. Future of food. The world needs to produce 50% to 70% more food by 2050 to feed more than nine billion people. The answer to “production or distribution?” is… both. Food and ag technologies, like vertical farms and lab-grown and “alternative” meat, can shore up supplies. Innovations in distribution can help get it to people and places. Example: Healthy fast-casual chain Everytable raised $5.3 million for sliding-scale healthy food restaurants. Chow down.
- Food and farmer finance. OnFarm’s exit and WaterBit’s fundraise highlight water-saving irrigation tech… CalBio and Land O’Lakes help farmers turn waste to energy… BrightFarms closes on $55 million for indoor farming.
4. Puerto Rico’s emerging market for impact investments. More than 135,000 people have left Puerto Rico since last year’s back-to-back hurricanes. Unemployment remains around 12% and nearly 60% of small businesses have closed, at least temporarily. It’s an emerging market on U.S. soil. Pipeline Angels, a network of more than 300 impact investors, is taking notice of Puerto Rico’s post-hurricane opportunities in agriculture, food, education, healthcare, energy, jobs and… women. PR opportunity.
5. Deals of the week. Drink from the deal firehose all week long on ImpactAlpha.com. A few that stood out:
- Climate finance. Macquarie debuts North American green investment strategy.
- Smart Cities. The Urban Innovation Fund raises $22.5 million city startup fund… LIIF lends $7.5 million for Silicon Valley affordable housing… Clean-tech startup raises $7 million to ramp up manufacturing in Buffalo.
6. Bridges Israel goes for the social. The poverty rate in Israel’s Orthodox and Arab-Israeli communities can be as high as 50%. A new $50 million fund aims to go beyond tech investing to demonstrate the opportunity to deliver healthcare and housing to Israel’s underserved. Go deeper.
7. Corporate impact. Corporations are going beyond ‘social responsibility’ to drive value through impact. Innovative companies are finding ways to drive social and environmental impact while boosting profitability – by increasing revenues or decreasing costs in core functions of making and selling products and services, says Scott Saslow of One World Training and Investments, which hosted an Innovations for Corporate Social Impact summit last month. Corporate impact initiatives that boost profitability catch the attention of management, he says. “It is then more likely to receive support to become sustainable, and ultimately scalable. That is how you drive impact.” The takeaways.
– July 6, 2018.