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The Week in impact investing: Accountability to impact



TGIF, Agent of Impact!

Accountability to impact. This week brought a raft of lessons for the new stakeholder economy. BP’s new CEO Bernard Looney came away with “the inescapable conclusion that we’ve got to change” after a listening tour of investors, employees and climate advocates (and a blockade at BP headquarters), and set the oil major on a course to net-zero carbon emissions (see No. 2, below). Conversely, JPMorgan Chase, the biggest banker of fossil-fuel projects, is seeking to block shareholder resolutions calling for climate action. Other companies also are trying to duck votes (via “no-action” requests to the SEC), but JPMorgan stands out: several proposed resolutions remind the bank that CEO Jamie Dimon led last summer’s “stakeholders” pledge by 180 CEOs, committing to benefit customers, employees, suppliers and communities and shareholders, and to “protect the environment by embracing sustainable practices across our businesses.”

JPMorgan also is facing tough questions about the depth of impact of its newly formed “development finance institution” (see No. 4). Accountability for impact is at the heart of the questions being raised about proliferating mobile-credit apps in Kenya, which are trapping many customers in debt and undercutting promises of “financial inclusion” (see No. 1). At The Economist’s Investing for Impact conference in New York yesterday, Oxford-style debaters explored whether “greenwashing” was undermining the reinvention of capitalism. Perhaps, but engaging corporations and encouraging them to act remains the winning argument, the audience decided. “Trust, but verify,” urged CERES’ Mindy Lubber. As BP’s Looney told his (many) skeptics, “If you see an example where we say one thing and do another, call us out.”

– David Bank, editor and CEO

The Week’s Big 6

1. Kenya’s fintech reckoning. Digital lending services like Tala offer first-time borrowers near-instant access to mobile credit. In Kenya, they may also be enabling predation, a debt bubble, and the impoverishment of many customers. Investors eyeing the fintech sector should “proceed with caution,” ImpactAlpha warned in our January preview of 2020 impact investing trends in Africa. After an expose in Bloomberg Businessweek, impact investors offered recommendations for safeguarding responsible fintech and driving genuine inclusion. Go deeper.

2. Raising the stakes for oil majors. New CEO Bernard Looney kicked off his tenure with bold promises to “reimagine energy,” and steer BP toward net-zero greenhouse gas emissions by 2050 at the latest. By including both BP’s operations and the oil and gas it sells, BP is the first oil major to adopt such “Scope 3” goals. “Every time a company sets a precedent, it sets the bar higher for others to match it,” says Carbon Tracker’s Andrew GrantDrill down.

  • The race to net zero. Dominion Energy committed to net-zero greenhouse gas emissions by 2050, and Georgetown University plans to divest its endowment from fossil fuel companies.

3. Obvious sustainability disruptions. Contrarian bets on the sustainability disruption are the stock-in-trade of a growing number of tech-for-good venture funds. “We look for omens and purpose-driven entrepreneurs who are disrupting trillion-dollar industries,” Obvious Ventures’ Andrew Beebe told ImpactAlpha. The venture firm, founded by Twitter co-founder Evan Williams, is focusing its just-closed third fund on “extreme growth areas” being disrupted by shifting consumer behavior, including energy and mobility, health, and the workplace. Get the full scoop.

4. Tough questions for JPMorgan’s DFI. Development finance institutions tasked with mobilizing private capital for public good are usually government-backed organizations. Last month, JPMorgan Chase & Co., the U.S.’s largest bank, took the unorthodox step of creating its own. CDC Group’s Nick O’Donohoe asks whether the new entity is just a new way to describe activities the bank is already planning. How will it increase capital in the world’s toughest markets? Will it measure impact? We’ll publish JPMorgan’s answers – when they respond. Mull it over.

5. Putting cash to work for impact. Opening accounts at Native-owned banks. Steering deposits to low-income credit unions. New initiatives from RSF Social Finance, Candide Group, CNote, StoneCastle Cash Management and others are starting to harvest the lowest-hanging fruit of impact investing: cash. Check it out.

6. The Gates Foundation’s new priorities. After spending two decades and nearly $54 billion on global health and education, the power couple at the head of the world’s largest foundation are putting climate change and gender equality at the top of the agenda. Find out more.

The Week’s Dealflow

Food and agtech. Alt-dairy maker Oatly is considering an IPO, sale or additional funding… Nigeria’s farmer-focused Farmcrowdy acquires livestock business… Leap India raises $23 million to improve grain-storage efficiency… Freight Farms raises $15 million for stackable vertical farms… India’s WayCool scores $32 million to improve farmer incomes and food supply chains.

Locavesting. Louisville’s Access Ventures debuts $15 million Render Capital fund for local entrepreneurs… GoATL impact fund backs The Reinvestment Fund in Atlanta… Community Preservation Corporation raises $150 million for affordable housing via sustainability bonds.

Capital on the frontier. Peruvian government invests $21 million in an early-stage fund of funds… SEAF Colombia Agribusiness Fund invests in off-grid solar firm Kingo.

Education and jobs. Good Capital backs Entri’s local language app for India’s job candidates.

Financial inclusion and security. Brazil’s Zetra raises $4.5 million for its employer lending and financial health app.

Fund news. KKR raises $1.3 billion for Global Impact Fund.

The Week’s Talent

Randall Kempner is stepping down as executive director of the Aspen Network of Development Entrepreneurs in May to head the Cynthia and George Mitchell Foundation in his home state of Texas… Elizabeth Littlefield will lead Albright Stonebridge Group’s new sustainability practice… Brandee McHale rejoins Citigroup as head of community investing and development… Sacha Romanovitch, CEO of U.K.-based Fair4All Finance, joins LeapFrog Investments’ board… Michael Nagy was named managing director at Catholic Investment Services… John Duong is leaving his role as managing director of Lumina Impact Ventures.

The Week’s Jobs

Luminate seeks a principal of civic empowerment in Washington D.C… OpenInvest is looking for a strategic partnerships manager in San Francisco… Catholic Charities is hiring an impact investing fellow in Alexandria, Va… Roots of Impact is hiring for multiple positions on its impact-linked finance team… Calvert Impact Capital is looking for a director of faith-based investing in Bethesda, Md… CDC Group is recruiting a gender equality and women’s economic empowerment executive in London… The Community Outcomes Fund at Maycomb Capital is hiring an analyst in Brooklyn… LISC seeks a community development underwriter in Oakland.

Pacific Community Ventures is hiring a business advising program manager in Oakland… Oikocredit is hiring in Accra (Ghana), Lima (Peru), San Jose (Costa Rica) and Amersfoort (Netherlands)… Mercy Corps Ventures is hiring a principal and an associate Washington D.C., London, The Hague, Lagos or Nairobi… Roots of Impact, Ashoka, the Swiss Agency for Development Cooperation, New Ventures and IDB Lab are calling for proposals from vocational training and job placement enterprises in Latin America looking for premium payments for positive outcomes… The Miller Center for Social Entrepreneurship’s online accelerator is recruiting women-led social enterprises.

Thank you for reading.

–Feb. 14, 2020

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