October 13, 2023 | The Brief

The Week in Impact Investing: Alternate Paths

The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣 Better way. This week’s horrific events in Israel and Gaza may make impact investors (and the journalists who cover them) feel naive and even helpless. But war also is a marker for paths not taken and opportunities missed. There is a better way. And so, Agents of Impact persist. Historian Claudia Goldin, who won the Nobel Prize in economics for documenting shrinking gender gaps, describes the changing role of women over the last 50 years as one of the “grandest advances in society and the economy.” On ImpactAlpha, WhiteLabel Impact’s Christina Campbell-Zausner and Emily Brearley argue for systemic changes to increase funding for women-led enterprises in emerging markets. Unicef is pushing for business and investment to adopt a “child lens” to better identify and account for impact on children (hear David Bank’s interview with Unicef USA’s Cristina Shapiro on this week’s Impact Briefing, below). 

In the US, philanthropic and private investors are moving to build community capacity in Black, Brown and Native communities to bridge “water gaps” exacerbated by climate change, as Andrea Riquier reports. Research led by Erika Smull of Breckinridge Capital Advisors documents the mispricing of climate and race-related risks in municipal bond markets that makes it costlier for Black communities to finance resilience upgrades. From baby bonds to public banks, Marjorie Kelly lays out on ImpactAlpha multiple pathways to “ensure capital would no longer be in control of, but in service to, life.” – Dennis Price

The Week’s Podcast

🎧 Impact Briefing. Unicef USA’s Cristina Shapiro joins David Bank to introduce child-lens investing, a framework for considering investment harms and benefits to children, who have too often been left out of investment decision-making. Host Brian Walsh has the headlines.

The Week’s Call

State of the Field: Unprecedented opportunity tempered by sober realism (video). This week’s Agents of Impact Call continued a tradition, started a decade ago by Fran Seegull of the US Impact Investing Alliance, and now joined by Cathy Clark of Duke University and Monique Aiken of The Investment Integration Project (and an ImpactAlpha contributing editor), to round up the state of the impact investing field and assess where impact investing goes from here. “I’m actually an optimist,” Aiken said. “Because on the other side of risk-identification is clarity about the things we need to do and the work we need to collectively prioritize.”

  • Policy tailwinds. Between the Inflation Reduction Act, the bipartisan infrastructure bill and private investment, trillions of dollars will be flowing to sustainable infrastructure projects, community economic development, and the clean energy transition. Applications are due this month for the $27 billion Greenhouse Gas Reduction Fund (part of the IRA) to set up a network of green banks to finance local renewable energy and other projects, Seegull noted. “This is an unprecedented opportunity for those of us that really care about historically underserved and economically disadvantaged communities.”
  • Convergence on standards. The International Sustainability Standards Board, or ISSB, has released final sustainability and climate-related corporate disclosure standards. California has passed similar regulations. “We are on the precipice of impact transparency, however imperfect it may be,” Seegull said. Advancing the impact investing field with integrity “is actually getting easier,” Clark said, as a result of shared nomenclature, new tools and common frameworks.
  • Political backlash. Seegull called out the “fully formed, well funded, well coordinated movement that seeks to undermine and politicize ESG investing practices and corporate ESG practices.” Clark responded, “It’s almost like we’re getting really close to the heat, and the heat is coming back. And that’s actually a good thing.” Businesses, she said, are investing time and resources in managing not just sustainability, but effects on people, customers, workers, suppliers and communities. Added Clark, “That’s not going to change.”
  • Keep reading (and watch the video replay), “Agents of Impact Call: State of the Field.”

The Week’s Dealflow

Deal spotlight: Investors turn attention to geothermal heat pumps. The Inflation Reduction Act offers building owners tax credits for up to half the cost of installing geothermal heat pumps, also known as ground-source heat pumps. New technology is bringing down costs. Last month, New York Gov. Kathy Hochul signed a law making it easier to tap the earth’s warmth. As barriers fall away, Los Angeles-based Bedrock Energy this week raised $8.5 million to pilot heat pump technology that taps into the temperate upper layers of earth. Less drilling means lower costs. 

  • Straight from the ground. Geothermal energy is gaining attention as cities look to reduce the hefty emissions generated from their building stock. “There is not deep science risk here,” Bedrock’s Joselyn Lai told ImpactAlpha. “We are ready to scale geothermal heat pumps across cities around the world.” In New York, Dandelion Energy is installing geothermal heat pumps for single-family residential homeowners. In the UK, Kensa Group plans to install 50,000 geothermal heat pumps yearly by 2030. Fervo Energy, based in Houston, uses the horizontal drilling methods of frackers to tap into geothermal energy. The company raised $138 million last year to build geothermal power plants in Nevada.
  • Greening Germany’s buildings. Germany has set ambitious targets to electrify and decarbonize the country’s building stock by 2050. This week, Berlin-based VARM raised early funding to train workers to install confetti-like “blown in” insulation in homes in Germany to improve home energy efficiency. Also, Berlin-based Purpose Green scored €3.3 million ($3.5 million) from Speedinvest and Atlantic Labs to help building owners map out energy retrofits.
  • More.

Climate finance. BlackRock launched a climate-transition private debt fund to invest in middle-market companies in the US and Europe… Spain’s White Summit Capital is looking to raise up to €600 million for a decarbonization-focused infrastructure fund… Vibrant Planet scored $15 million for wildfire-risk mitigation and forest resilience.

Economic inclusion. LeapFrog’s Emerging Consumer Fund secured a $100 million commitment from IFC… InsuranceDekho raised $60 million to expand access to insurance in India… Advantage Capital backed Las Vegas-based Goodwrx to address the hospitality industry worker shortage.

Energy transition. Adenia acquired a majority stake in South African solar provider Enfin… Nuveen invested $30 million in Boston-based Perch Energy to provide management services for community solar projects… The European Investment Fund invested €20 million in Vireo Ventures’ Electrification Fund. 

Gender smart. Accolade Partners raised $325 million for its second Empowerment Fund to invest in funds led by women and diverse managers… Finnfund made a $15 million 2X Challenge commitment to Metier Capital’s third growth fund… Women-led Sanari Capital raised $65 million to invest in South African businesses and job growth.

Investing in health. FemHealth Ventures raised $32 million to invest in ventures centered around women’s health… Switzerland-based LimmaTech raised $37 million to develop vaccines to counter bacterial infections… UK-based Lottie raised €20 million to help seniors connect with home care and assisted living facilities… Onsurity secured $24 million to extend health insurance to India’s small businesses. 

The Week’s Talent

Bluestar Energy Capital appointed Neil O’Donovan, ex- of Orsted, to president and chief operating officer… Kapor Capital promoted Batul Joffrey to principal… Kelsey Jarrett, ex- of ESG and impact consulting firm Malk Partners, joined SJF Ventures as director of impact… Opportunity Finance Network promoted Dafina Williams to chief external affairs officer.

The Week’s Jobs

💼 Share the week’s impact jobs. View dozens of other jobs on our new job board. Want to post a listing? Submit it here.

In the US

In Washington, DC: The National Community Reinvestment Coalition is recruiting a senior director of racial economic equity; The Aspen Institute has an opening for a policy director for its economic strategy group; Halcyon has an opening for a finance manager.

Sumitomo Mitsui Banking Corp. is recruiting a sustainability program coordinator in New York… Prime Coalition seeks a senior manager of impact in Boston… S2G Ventures is hiring a senior communications associate in Chicago… Skoll Foundation is looking for a production manager in Palo Alto, Calif… Mission Driven Finance seeks a remote vice president of investment management. 

Global locations

In Singapore: Nuveen seeks an impact investing associate; Top Tier Impact is looking for a community operations intern… SVX is recruiting an impact investing intern in Canada… Sitawi Finance for Good is hiring an analyst in Sao Paulo… 60 Decibels is on the hunt for a senior associate of impact measurement in Nairobi. 

That’s a wrap. Have a wonderful weekend. 

– Oct 13, 2023