TGIF, Agents of Impact!
🗣 Training day. It’s either comforting or alarming that just about every artificial intelligence company is spinning up teams and whole departments to tackle what is known as “the alignment problem.” The technical challenges of encoding human values and principles into AI is hard enough. The normative challenge of knowing what to encode is even tougher. To be sure, artificial general intelligence, or AGI, is a big step from the generative AI chatbots like ChatGPT. But it’s not too early to move “alignment” up the global to-do list. “Solving the AGI alignment problem could be so difficult that it will require all of humanity to work together,” three authors from OpenAI wrote last year. Good luck with that. Their solution: train AI systems themselves to advance alignment. “They will work together with humans to ensure that their own successors are more aligned with humans.”
Non-coders can contribute by developing and documenting models on which the AI can be trained. The impact verification firm BlueMark is benchmarking funds’ practices for managing impact, including through a leaderboard of top-performing firms, as Dennis Price reports. Neil Gregory, ex- of the International Finance Corp., shares tips on assessing risks to impact, while Snowball’s Jake Levy offers five ways to advance impact measurement and accountability. Aunnie Patton Power and Riannah Burns argue for compensation structures that better align fund managers with the impact outcomes they profess to deliver. To help investors better leverage ESG data for impact, Kieger’s Panagiota Balfousia makes a plea for transparency and traceability in ratings and scores.
Perhaps most important are real-world implementations. As part of our ongoing coverage of the ownership economy, Roodgally Senatus reports on efforts to democratize fast-food franchising as a strategy for racial wealth-building. Sebastian Welisiejko of the Global Steering Group for Impact Investment makes the case for infrastructure investments in the informal settlements, aka slums. As Amy Cortese reports, Microsoft this week contracted with Helion to receive fusion power in 2028, with penalties for late delivery. “Innovative models for sustainable finance and positive social impact are often underrepresented in current models of business and investment decision-making,” ChatGPT responded when I asked how Agents of Impact can help align AI systems. Mitigating these risks, it went on, “requires rigorous data collection, diverse and representative training data, regular audits for fairness and bias, integration of ethical considerations, and human oversight throughout the decision-making process.” That is, it’s up to us, at least for now. – David Bank
The Week’s Podcast
🎧 Impact Briefing. Eunice Ajim, founding partner Ajim Capital speaks with David Bank about her personal journey to launch the fund and her mission to support tech entrepreneurs in her native Cameroon and across Africa. Host Monique Aiken has the headlines.
- Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
The Week’s Chart
Power to the people. Bipartisan legislation introduced this week would create an investment facility to mobilize private investment for employee-owned businesses. The Employee Equity Investment Act would ease employee ownership conversions by providing loan guarantees for investment funds devoted to expanding employee ownership via the SBA’s Small Business Investment Company program (see, “Policymaking for workers and communities in the Year of the S”). “American workers are the driving force behind the U.S. economy’s strength, dynamism and resilience,” said Fran Seegull of the U.S. Impact Investing Alliance. “With the right tools, investors can help empower them further. ” Share this post.
The Week’s Dealflow
Deal spotlight: Odyssey raises $15 million to cut obstacles to renewables in emerging markets. Commercial and industrial solar for business facilities, factories and shopping centers is growing in markets without reliable grid connections. In many emerging markets, supply chain, logistics and financing obstacles prevent implementation from keeping pace with demand. “There are so many frictions in the process,” observed Emily McAteer of energy tech venture Odyssey, which connects developers with suppliers, investors to projects, and even provides working capital. “The way we can be most impactful is to cover the end-to-end process and be a system of record for projects from the moment they’re conceptualized through operation,” McAteer told ImpactAlpha. Less than a year after its seed round, Odyssey raised $15 million in Series A financing from Union Square Ventures, MCJ Collective, Climate Capital and others.
- Growth path. Odyssey serves more than 2,000 different companies and is facilitating more than $1.3 billion in financing in African solar projects. One market where it’s seeing growing demand for commercial and industrial solar is South Africa, where corruption at the national utility has created a nationwide power crisis that is costing the country $51 million in economic losses each day. The fresh capital will help Odyssey expand into new markets.
- Learn more.
Carbon capture. Canada’s Deep Sky raised $10 million for its pilot facility to capture atmospheric carbon, compress it and store it underground… 3M inked a deal with Svante to develop materials for direct-air carbon capture.
Circular economy. Microsoft’s Climate Innovation Fund backed AMP Robotics, which makes a robotic system that sorts recyclable materials… Pryme secured €13 million for lower-carbon plastic recycling that increases the amount of salvageable plastic.
Climate finance. The IFC provided €64 million in debt and equity to Equatorial Coca-Cola Bottling Company to invest in green operational upgrades… Climate is a bright spot for TPG amid fundraising slowdown… Bank of America is reportedly arranging a $500 million deal for Gabon’s marine conservation… CAI backed Switch as part of a $300 million initiative to green the digital economy.
Energy transition. British utility National Grid invested in EV.energy and Modern Hydrogen… Generate Capital invested $250 million in Ambient Fuels to scale up green hydrogen production… Kensa Group secured £70 million to accelerate adoption of ground-source heat pumps in the UK.
Financial inclusion. M-KOPA raised $255 million in equity and impact-linked debt for financial and gender inclusion… DisrupTech Ventures raised $36 million to invest in tech ventures accelerating access to finance in Egypt… Egypt’s Balad raised a pre-seed round for its prepaid cards that allow migrants to send payments to their families.
Green infrastructure. Gradiant raised $225 million for water management systems… Tangible raised $3 million to help building developers measure and reduce climate impact.
Investing in health. Grapefruit Health clinched $1.3 million to address the US’s chronic shortage in healthcare workers… Wellthy secured $25.5 million to provide caregiving support as an employee benefit.
Returns on inclusion. Illumen Capital raised a $168 million second fund to fight bias in asset management… New Summit Investments team up with Gratitude Railroad to back diverse-led funds.
The Week’s Talent
LeapFrog Investments promoted Michael Jelinske to director of investments and Rebecca Kwee to impact officer… Impax North America named Ed Farrington president following the retirement of Joe Keefe in January… Kate Ahern, ex- of Cartica Management, joined Sandoz as head of ESG in Munich… Shawn Lesser, ex- of Big Path Capital, launched The Real with digital advertising executive Brent Herd to focus on mental health.
The Week’s Jobs
💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.
Calvert Impact seeks an investor relations officer in Maryland… Builders Vision is looking for an impact investing associate in Chicago… Accion Impact Management is hiring an operations fund manager in Washington, DC… Upstart Co-Lab is on the hunt for a communications and operations manager.
The Milken Institute is looking for an economic policy associate director and an innovative finance director in Washington, DC… UBS is looking for a head of operations for social impact and philanthropy in New York… Strada Education Foundation has an opening for a strategic investments platform manager in Indianapolis.
Wetherby Asset Management seeks an impact management analyst in San Francisco… Global Partnerships is hiring an investment analysis officer in Seattle… RSF Social Finance is hiring a vice president of investor relations in San Francisco.
SDG Capital is on the hunt for an investment manager in Amsterdam… ResponsAbility has an opening for a fund of funds product controller in Zurich… IFU seeks a head of impact ventures in Copenhagen… In London, the London School of Economics is recruiting an impact investing associate, Social and Sustainable Capital seeks a portfolio manager analyst, and London Stock Exchange seeks a sustainable finance senior marketing manager.
Acumen is recruiting an East Africa-focused senior investment associate in Nairobi… Also in Nairobi, the Rockefeller Foundation is looking for a food initiative team coordinator and the Lutheran World Federation is on the hunt for a development impact bond manager… I&P seeks an investment officer for the Mastercard Foundation Africa Growth Fund, based in Accra… FMO is recruiting an energy senior investment officer focused on East and South Africa.
Global Partnerships is recruiting a Latin America portfolio impact officer in Bogota… The Nature Conservancy is recruiting a bioeconomy specialist in Brazil… Alterna Impact seeks an impact fellow in Guatemala.
In Singapore, South Pole has an opening for a sustainable finance managing consultant, IIX is looking for a credit analyst, and MSCI is looking for a senior ESG researcher and vice president.
That’s a wrap. Have a wonderful weekend.
– May 19, 2023