TGIF, Agents of Impact!
Game stoppers. It was hard to turn away from the Reddit revolt by small traders, who outmaneuvered Wall Street hedge funds to wreak havoc in the stock markets. The action this week in markets for carbon credits (see Agent of Impact, below), clean technologies (No. 5), climate adaptation (No. 3) and even Indian agriculture (No. 2) may be more consequential. President Biden’s executive orders on green jobs (No. 4), health care and racial justice could have filled The Brief. Public pressure on BlackRock helped spur Larry Fink to get tougher on corporate climate commitments (No. 1). General Motors swore off internal combustion engines (by 2035). Net-zero business models. Sustainable and inclusive investment theses. Tools to measure impact and promote accountability (No. 7). Everywhere we look, Agents of Impact are ready for action.
– David Bank
Impact Briefing. On this week’s show, host Monique Aiken and David Bank introduce The Reconstruction, a series of racial justice podcasts and posts launching next week on ImpactAlpha. Monique previews her conversations with three early guests: Carmen Rojas of the Marguerite Casey Foundation, 1863 Ventures’ Melissa Bradley and labor organizer-turned-playwright Gene Bruskin. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 8
1. BlackRock’s net-zero mandate and the boom in carbon credits. “We are asking companies to disclose a plan for how their business model will be compatible with a net-zero economy,” BlackRock’s Larry Fink wrote in his annual letter to corporate CEOs. Fink’s edict will spur the accelerating market for carbon credits (see Agent of Impact, below). More than 1,500 companies have adopted targets to zero out emissions by 2050 or sooner. Walmart and others have vowed to get to net-zero by cutting their own emissions, but many companies will offset their carbon with credits from carbon-negative forestry, agriculture and other conservation projects. Onward.
- Acceleration. General Motors plans to eliminate light-duty gasoline and diesel cars and SUVs by 2035, invest heavily in electric vehicles, and be carbon neutral by 2040.
2. India’s agtech opportunity. The digitization of India’s $280 billion agriculture industry could have a social payoff: higher incomes and better livelihoods for the country’s 130 million smallholder farmers. Case in point: Ankur Capital’s investment this month in Bangalore-based CropIn. More than half-dozen agtech deals in 60 days suggest investors are paying attention. More.
- Catalytic capital. Ankur’s second fund for impact tech in India is the latest investment by the MacArthur Foundation, as part of the Catalytic Capital Consortium.
3. Financing climate adaptation. Investments in climate resilience and adaptation in developing countries needs to ramp up, the U.N.’s António Guterres said at this week’s Climate Adaptation Summit hosted by the Netherlands. “Adaptation cannot be the neglected half of the climate equation.” Keep reading.
4. Climate action = green jobs. U.S. President Biden marked his first week in office with 30 executive orders electrifying the national fleet, supporting clean energy innovation, revitalizing communities dependent on coal, oil, natural gas and power plants, and more. He vowed to create millions of skilled jobs building “a new American infrastructure and clean energy economy.” Say it again.
- Fresh ideas. A database from Clean Economy Employment Now, or CLEEN, aggregates more than 180 “actionable ideas” to combat climate change, catalyze job creation and advance climate justice.
5. Decade of carbon. Call it Cleantech 2.0 or the Decarbonization Economy. Renewable energy costs have plummeted and, “if history is any guide, we’re still radically underestimating what’s ahead,” writes Obvious Ventures’ Andrew Beebe. Beebe identifies opportunities in electric mobility, better buildings and carbon trading. “Evidence is everywhere that we are in the midst of a complete transformation of carbon-producing economies.” Get the scoop.
6. Opportunity Zone deals flow. Impact investors aren’t waiting for the Biden administration’s new rules to make Opportunity Zones work better for Black and Brown communities and small businesses. Arctaris Impact Investors has deployed capital in low-income areas in Ohio’s Cuyahoga County and in Belfast and South Portland, Maine. Keep digging.
- Bhathal family. The investment arm of the family that owns a stake in the Sacramento Kings plans to invest $250 million over three years into Opportunity Zone projects. RevOZ will “exclusively focus on growing metro areas hit hard by COVID-19 and historically overlooked by traditional private investors.” Its social impact council includes KNGDM Group’s Derrick Morgan, former Baltimore Mayor Stephanie Rawlings-Blake, and Urban Institute’s Brett Theodos. Rachel Reilly, formerly of Economic Innovation Group, will advise on the investments.
7. Impact beacon. A free tool from City Light Capital guides entrepreneurs to illuminate their social impact in investor pitch decks and marketing materials. City Light’s Josh Cohen says such unit-level impact analysis can help entrepreneurs articulate, “When I get to $100 million in revenues, here’s what my impact will look like.” Dive in.
8. Patricia Farrar-Rivas walks the talk. Early in her career, the former CEO of Veris Wealth Partners saw the effects of inequality and wealth disparities in El Salvador, where she worked with people struggling for human rights in the midst of the civil war. “We must ask ourselves, how can we change capitalism so that it’s not extractive and destructive and unsustainable? How can wealth support just, equitable and regenerative systems?” Farrar-Rivas writes in ImpactAlpha’s Walking the Talk series, a partnership with Confluence Philanthropy. Dig in.
The Week’s Agent of Impact
Bill Winters, Standard Chartered. If putting a price on carbon is the key to getting to net-zero, Bill Winters – with an assist from Mark Carney – may be the one who unlocks the market. Demand for carbon credits is growing as corporations stretch to meet increasingly rigorous net-zero pledges. Needed to match that demand with supply: an effective carbon market with global reference prices to guide buyers and sellers. Projects that didn’t pencil out when a ton of avoided carbon fetched $7 or $8 become very attractive at $15 or $20 a ton. At $50 to $100 a ton – still low for the true cost of carbon – suppliers and brokers of high-quality credits will be riding a roaring market. That is attracting entrepreneurs and technology, along with NGOs and government agencies. Prices will ratchet up with concerted global action; watch the ramp up to COP26 in Glasgow in November. A blueprint released by Winters’ Task Force on Scaling Voluntary Carbon Markets estimates that trade in credits will grow from less than a half-billion dollars last year to as much as $50 billion in 2030.
Winters was tapped to create the low-carbon market infrastructure by Carney, the former Bank of England head (and Agent of Impact) and now U.N. special climate envoy. The plan is to coax corporate cash toward the $3-trillion-a-year in climate financing needed to achieve net-zero carbon emissions by 2050. A JPMorgan veteran, Winters took the reins of Standard Chartered in 2015 after the U.K. bank was rocked by a series of money laundering and sanctions violations. He is a champion of the role of banks in emerging digital currencies, including for trading carbon. “There is a whole new world that’s opening up for us,” he said. The carbon-markets task force proposed 20 actions, including establishing ‘Core Carbon Principles’ to ensure integrity of offsets, and exchange-traded reference contracts similar to ones for other commodities (Ecosystem Marketplace has a helpful summary). More than two-thirds of carbon credits are expected to come from ‘natural climate solutions,’ such as forests and peatlands conservation and, increasingly, agricultural soil carbon. To avoid a climate disaster, says Winters, “We will need tens of billions of dollars, eventually hundreds of billions of dollars, to transfer from people like us to people who are actually able to make a difference in terms of affecting the ultimate outcome of carbon emissions.” – David Bank
The Week’s Dealflow
The Reconstruction. Bank of America places $150 million with minority-led fund managers… Elevate Capital raises $26 million for second fund to back under-represented founders… Citi Impact Fund backs Black, female and veteran founders… Digital workflow platform ServiceNow launches $100 million racial equity fund… Jay-Z launches $10 million fund to invest in Black-owned cannabis businesses.
Frontier finance. DFC guarantees Cordaid to spur lending in Africa’s Sahel… West African Development Bank issues €750 million sustainability bond… Pula raises $6 million to expand farmers’ insurance from Africa to Asia… Upaya Social Ventures supports ‘good jobs’ in India with four investments.
Low-carbon transition. Rise Fund’s renewables group acquires Chilean solar energy portfolio… FreeWire Technologies secures $50 million for fast-charging EV stations… Solar fintech Sunlight Financial to go public via Apollo-affiliated SPAC… Electric charging operator EVgo to go public via a climate SPAC.
Agrifood investing. Imperfect Foods scores $95 million for ‘ugly’ produce sales… Agri-Business Capital Fund finances cocoa cooperatives in Côte d’Ivoire… Shoring up the supply of beekeepers in West Africa.
Health and wellbeing. Hurdle raises $5 million to provide mental health care for people of color… Bain Capital Double Impact invests in Multi-Specialty Healthcare… Investors commit to a social impact bond to reduce elderly loneliness in Israel.
Locavesting. GoATL Fund invests $1 million for COVID recovery in Atlanta.
Skills and education. MPower raises $25 million to help international students pay for a U.S. education.
The Week’s Talent
Jessica Long, ex- of Accenture, joins Closed Loop Partners as chief strategy officer and managing director… Tamara Close, previously with Close Group Consulting, joins KKS Advisors as managing director and head of ESG integration… Amy Harder, ex- of Axios, joins Breakthrough Energy Ventures to lead a new journalism initiative… Abi Mustapha-Maduakor becomes CEO of the African Private Equity and Venture Capital Association… Mary Reynolds Babcock Foundation CEO Justin Maxson steps down to join the Biden-Harris administration as USDA deputy undersecretary for rural development.
Credit Suisse expands its ESG team with Michael van der Meer, Angela Saxby, Sina Dorner-Müller, Timothy Oehmigen and Karim Sayyad… Jenny Everett steps down as managing director of the Aspen Network of Development Entrepreneurs in March… Brian Fernandes-Halloran is the new executive director of Halloran Philanthropies. Tony Carr, executive director since 2007, retired in December… Tony Berkley accepted a buyout from Prudential Financial last fall and has joined the Future Investment Initiative Institute in Riyadh, Saudi Arabia as head of investments.
The Week’s Jobs
Nonprofit Finance Fund is hiring a senior loan officer… The Institute of International Finance seeks a senior policy associate in Washington, D.C… Also in D.C., ISF Advisors, housed at Global Development Incubator, is looking for a strategy associate… The Global Impact Investing Network is hiring a research associate in New York… The Cystic Fibrosis Foundation seeks an investment analyst in Bethesda, Md… ANDE is recruiting a managing director, events manager, global operations manager and advocacy manager… Inclusive Prosperity Capital is recruiting a general counsel and clean energy finance investment analyst.
Adasina is hiring a social justice investment fellow… New Economy Coalition seeks an interim development officer… Blueprint Local has openings for a director of operations and for a (remote) investment analyst… MCE Social Capital is hiring a portfolio manager in Barcelona… Peloton is recruiting a senior manager of ESG/environmental sustainability in New York… Occam Advisors is looking for a team member to support its client Potencia Ventures in Portland.
Thank you for your impact.
– Jan. 29, 2021