TGIF, Agents of Impact!
🗣 Thriving in turbulence. As we’ve seen in past moments of volatility, commitments to positive impact are again helping financial institutions weather unpredictable markets. As interest rates have risen, investors have fled traditional banks seeking higher-yielding opportunities. Not so at impact-oriented financial institutions, reports Andrea Riquier. “We have not seen any withdrawals because of yields,” Catherine Berman of CNote, which offers interest-bearing notes that are invested with community-based lenders, told Riquier. “If anything, we are seeing more demand.” Impact is sticky. “Retail investors who invest in community impact have always prioritized the non-financial aspects,” said author Andrea Longton. And impact investors “underwrite for resilience and adaptability,” David Lynn of Mission Driven Finance told me last year; they often prioritize stable businesses and real revenues. “While these types of community investment portfolios don’t tend to have big hockey sticks, we believe they tend to be lower volatility,” he said.
Such impact buffers offer investors opportunity as well as resilience. Private equity firms like TPG, KKR and Brookfield see robust demand for impact and climate funds, reports Amy Cortese. ImpactAlpha is seeing an increasing number of pure-play impact funds actively raising capital, including a growing set of ocean-focused strategies, as Roodgally Senatus reports. The Liist, compiled for the 16th consecutive month by Jessica Pothering, now features over 100 funds. In revealing its first investments to ImpactAlpha, the team from Heading for Change, the legacy project of Suzanne Biegel, touts “the power of women’s insights and innovations in developing and scaling climate solutions” (disclosure: Heading for Change sponsors ImpactAlpha’s Climate + Gender coverage). And investors in the Global South are zeroing in on “impact funding” mechanisms such as volume guarantees and social impact bonds to lower costs and boost demand for digital health solutions, as Ritika Ramasuri, Daniel Rostrup and Granthika Chatterjee of the Sattva Knowledge Institute. Increasingly, positive impact isn’t just the goal; it’s the whole game. – Dennis Price
📞 Agents of Impact Call: Women as agents of change for climate resilience. Join Camilla Nestor of MCE Social Capital, Shally Shanker of AiiM Partners, Noramay Cadena of Supply Change Capital, and Samantha Anderson and Rose Maizner from Heading for Change, Wednesday, Nov. 15 at 10am PT / 1pm ET / 6pm London. RSVP today.
🤝 Meet ImpactAlpha IRL. ImpactAlpha’s Zuleyma Bebell will join Integrated VC’s Jay Newmark, Katy Davis of Wellness Economist, and Imvest’s Julia Wilkinson, for the Imvest Mental Health Impact Investing dinner in Coral Gables, Fla., Monday, Nov. 20. Get tickets.
The Week’s Podcast
🎧 Impact Briefing. The Wilmington coup of 1898 is not as well known as the Tulsa massacre of 1921. Exactly 125 years ago today, an organized white supremacist militia attacked the North Carolina city’s Black leaders and residents and forcefully removed their elected officials before gunning down citizens in the streets. It was the end of the city’s brief period of multiracial democracy and multiracial prosperity.
Wilmington local Cedric Harrison has been recovering that lost history in children’s books, videos and a compelling tour of the sites of the violent takeover. In Harrison’s hometown, David Bank joined him for a conversation about the lessons and the legacy of the coup. Host Brian Walsh 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 Call
Plugged In: Local climate innovation with VertueLab’s Aina Abiodun (video). VertueLab in the Pacific Northwest isn’t out to be “the Harvard” of climate accelerators. Accelerators that gather and serve the world’s elite “are not necessarily building for the people that occupy the lands that we live on here,” says Aina Abiodun, who joined nonprofit VertueLab earlier this year (see, “Agent of Impact: Aina Abiodun”). The question that occupies Abiodun’s thinking is, “What is the best innovation that’s going to serve the people who live in the Pacific Northwest?” Abiodun joined Plugged In host Sherrell Dorsey to discuss the opportunity in local climate innovation.
- Conduit to communities. Climate money from the federal Inflation Reduction Act has started to flow. “The bigger challenge is deploying,” Abiodun says. VertueLab’s Just Futures Climate Labs works with communities to overcome political, technical and equity challenges associated with the transition. “Is it fair? Is it good for us? Should we be deploying this technology? Should we just do it because we have the money? Do we need it, or what do we need?” she says. “That’s the work.”
- Keep reading, “Plugged In: The opportunity in local climate innovation with VertueLab’s Aina Abiodun,” on ImpactAlpha and watch the replay on LinkedIn.
The Week’s Dealflow
Deal spotlight: Progress and pitfalls in global climate finance. Global climate finance flows reached an annual average of $1.3 trillion in 2021 and 2022. That’s double the amount of climate funding in 2019 and 2020. Still, investments in climate mitigation and adaptation represent just 1% of global GDP – and only one-fifth of what is needed to stave off the worst effects of a warming planet. The biannual tally of global climate funding from research and advisory firm Climate Policy Initiative comes just weeks before world leaders gather in Dubai for the COP28 climate talks. “Our findings indicate the urgent need to work towards mobilizing finance” in regions and sectors where capital is lacking, CPI’s Barbara Buchner said on a briefing call. The funding gains were propelled by strong investment in solar and wind power and electric vehicles. One country, China, accounted for just over half of all climate finance investment. Of the $1.3 trillion, just $30 billion, or less than 3% of annual investment, went to the least developed countries. Additional takeaways:
- Billion-dollar babies. Multi-billion energy transition and climate tech funds have become the norm in venture capital and private equity. Brookfield Asset Management raised a fresh $6 billion green infrastructure debt fund, and TPG this week said it has committed 65% of its $7 billion Rise Climate fund and is eyeing a follow-on fund. As large as they are, private funds are just a tiny sliver of overall climate finance, which is dominated by development finance agencies on the public side, and banks, corporations and households in the private sector.
- Consumer power. Spurred by domestic policy incentives, households spent big on EVs, solar panels, heat pumps and other low carbon technologies. Consumer spending drove most of the gains in private sector climate finance, accounting for almost one-third of private funding flows – the largest share since CPI began collecting the data a decade ago. Sales of EVs, in particular, surged in China, Europe and the US.
- Adaptation still lags. This year is likely to be the hottest on record. Finance to help people adapt to climate change rose to $63 billion on average, up 28% in 2021 and 2022. That’s a fraction of the money invested in climate mitigation and far short of the more than $200 billion a year needed by low- and middle-income countries by the end of the decade. “Mainstreaming adaptation and resilience is going to be really important,” said CPI’s Baysa Naran.
- Keep reading.
Climate finance. Rockefeller Foundation awarded grants from its $1 billion climate commitment… Candide’s Afterglow Climate Justice Fund secured $36 million to lend in frontline communities… Asset manager Gresham House raised £300 million for its Forest Growth and Sustainability fund… France’s Goodvest raised €10 million to offer savings accounts and life insurance policies that are designed around minimal climate impact.
Energy transition. New Delhi-based Euler Motors raised 6.9 billion rupees to make electric three-wheelers used for cargo transport… Southern California utility issued $162 million green bond to finance renewable power… Wyoming-based utility-scale wind developer Airloom Energy clinched $4 million… Austin-based Talus Renewables scored $22 million to develop modular green ammonia systems…
Fund news. KKR clinched $2.8 billion for second impact fund… Norrsken22 raised $205 million to make growth-stage investments in African… Social Finance tapped donor-advised funds for impact-first investments.
Green tech. India’s Fibmold raised $10 million to make plastic alternatives from bamboo and other natural fibers… Closed Loop Partners took a majority stake of Sage Sustainable Electronics, which helps businesses recover, reuse or safely dispose of IT assets… NuEnergy clinched $16 million to recycle materials from lithium-ion batteries… Refurbed secured €54 million to expand its marketplace for refurbished tech products and appliances throughout Europe… Aclarity snagged $16 million to remove PFAS and other contaminants in water and liquid waste.
Milestones. ImpactAssets crossed $3 billion in assets under management and reported that it directed $458 million in investments and $224 million in grants to funds, companies and nonprofits last year.
Returns on inclusion. New York-based BBG Ventures raised $57.2 million for its fourth venture fund for women-led startups… Zeal Capital Partners is managing a planned $50 million investment fund from Barclays for Black-led companies helping narrow racial wealth and skills gaps.
The Week’s Talent
Climate activists are mourning the death of Saleemul Huq, a Bangladeshi scientist and writer who helped persuade wealthy nations to back a “loss and damages” fund at COP27… Blue Earth Capital named Daniel Perroud, ex- of BlueOrchard Finance, managing director and head of fundraising and investor relations… Participant Media named Baratunde Thurston of PBS and Chi-hui Yang of the Ford Foundation to its impact advisory council… Jasmine Browner, ex- of JBG Smith, joined Zeal Capital Partners as an executive assistant.
Kelsey Weber, ex- of Common Justice, joined Ownership Works as a finance and operations associate… Stefanie Thomas, ex- of Impact America Fund, joined Zeal to oversee the fund… Benedict Partners’ Billy Gridley joined The Investment Integration Project as a senior advisor… Opportunity Finance Network reelected Nonprofit Finance Fund’s Aisha Benson to its board of directors… Maria Oliva Farriol, ex- of Oryx Impact, joined MCE Social Capital as impact manager.
The Week’s Jobs
Jobs in the US
In Washington, DC, Enterprise Community Partners seeks an investor relations analyst for Low-Income Housing Tax Credits; BGS Consulting seeks a manager of ESG initiatives in the Baltimore-Washington area; and Visa Economic Empowerment Institute is on the hunt for an executive director… The Nature Conservancy is looking for a communications manager and a finance specialist.
In Boston, Wellington Management is hiring a director of its sustainability group, and Spring Lane Capital is looking for a vice president and senior associate… In San Francisco, Lowercarbon Capital is hiring an energy systems technical associate, and Acumen seeks an associate for its health team.
In New York, BlackRock Investment Stewardship is looking for healthcare and energy analysts; Impact Capital Managers is on the hunt for a finance and operations manager; and CapitalOne seeks a community impact and investment project manager for its social impact team.
MAPS Public Benefit Corp. has an opening for a head of market access… PolicyLink is hiring a senior associate for corporate racial equity… Pivotal Ventures is recruiting a director of equity and belonging.
That’s a wrap. Have a wonderful weekend.
– Nov. 10, 2023