The Week in impact investing: Climate action



TGIF, Agents of Impact!

Thanks to everyone who made it out last night to our Agents of Impact event in Manhattan. Watch this space next week for more Climate Week coverage. Per usual, please send through any tips, leads or news.

Have a relaxing and refreshing weekend.

– The ImpactAlpha team

The Week’s Agents of Impact

Climate Agents. ImpactAlpha ‘Agents of Impacts’ are deploying bottom-up and top-down strategies to force action on climate. On Friday, teenage activist Greta Thunberg (a January Agent of Impact) is leading young people from more than 150 countries in a global climate strike ahead of next week’s Climate Action Summit. Joining her is Vic Barrett (September ‘18) and other members of Our Children’s Trust, the young leaders suing the U.S. government for the right to a secure climate. On Wednesday, Thunberg urged the U.S. Congress to “listen to the scientists” and take action. Barrett, who also testified, called on Congress to focus on the disproportionate impact of climate on marginalized communities, a topic that is center stage at this weekend’s Climate Justice Youth Summit in Brooklyn. Fueling the growing youth movement and urgency around climate change are the climate scientists, like Sandra DíazJosef Settele, and Eduardo Brondízio (May), whose May report compiled evidence of an ecosystem deterioration “unprecedented in human history.”

“Climate shareholders” (May) are pressing companies on climate action from the top. More than 200 institutional investors are calling on companies to combat the deforestation that helped fuel the devastating fires in the Amazon. Hiro Mizuno (April), chief investment officer of the world’s biggest shareholder, the $1.6 trillion Government Pension Investment Fund of Japan, is pressuring big asset managers to put up or shut up on sustainability. “If you do not satisfy us then you are out,” he told the London Stock Exchange last year. Climate-smart fund managers, like former World Banker Bertrand Badré (February) of Blue Like an Orange Sustainable Capital, are seizing ‘climate alpha’ by investing in businesses moving early to create sustainable growth. Rabble rousers inside companies, like longtime GE executive turned Distributed Solar Development founder Erik Schiemann (July), are scoring climate wins by forcing the case for sustainable disruption. Christiana Figueres (October ‘18), the former U.N. climate chief who architected the Paris climate deal, now believes it’s possible to peak carbon emissions by 2020 and halve them every decade thereafter. Says Figueres, “We are already on an exponential trajectory to a clean economy future but it’s going to take all of us to ensure it.” – Dennis Price

The Week’s Big 9  

1. Faith-based investors turn to direct investments to finance climate action. “We work with the most vulnerable people around the world,” Catholic Relief Services’ Beth Collins told ImpactAlpha. “A good chunk of our programmatic work ends up being climate-related.” The organization is among a growing number of faith-based investors that are carving out portions of their investment portfolios for direct, private impact investing strategies to combat the climate emergency. Faith and investing.

2. Overcoming climate challenges. In the transition to a low-carbon economy, capital is not the problem. Stranded assets, subsidized carbon, and an underdeveloped investment pipeline are. Michael Bloomberg’s Climate Finance Leadership Initiative produced a primer on the challenges holding back the low-carbon transition, as well as promising solutions with the help of Allianz Global InvestorsAXAEnelGoldman SachsHSBCMacquarie and Japan’s Government Pension Investment Fund. Wise up.

3. Everyday investing in ‘soil wealth.’ Smaller investors can now invest in Iroquois Valley Farmland’s real estate investment trust, which finances the conversion of conventional farmland to organic. “We take dead soil and bring it back to life,” says Iroquois Valley’s David Miller. The company joins other firms, including CNoteAmerican Homeowner Preservation and StreetShares, that are opening up once-exclusive impact investments to everyday investors. Dig in.

4. A greener “blue economy.” For farmed fish to provide a growing share of the world’s protein, the industry’s got to clean up its act. Investors such as Aqua-SparkSOSVAlimentos Ventures and Kleiner Perkins are investing in alternative sources of feed, improved containment systems and disease prevention to lay a more sustainable foundation. Dive in.

5. Unlocking capital for female fund managers. When the U.S. Development Finance Corp. opens its doors on Oct. 1, it will be equipped with new investment tools to support female fund managers in emerging markets. The agency’s 2X Challenge, which has already ushered in $1 billion for female financial inclusion, will be supercharged with new debt, technical assistance and equity capabilities. Women rising.

6. The case for student-centric finance. MPOWER’s founders set out to help promising international students pay for a U.S. education when few lenders would lend to them. Borrower data from the company’s first impact report offers lessons in how to design more responsible and inclusive education finance for all students. Check it out.

7. Fossil fuels too “risky” for University of California’s billions. Under pressure from students and faculty members, the University of California will divest its $13 billion endowment and $70 billion pension fund from fossil fuels. Jagdeep Singh Bachher and Richard Sherman, the school’s top investment officers, said their rationale was to reduce long-term financial risk. More.

8. Toilet paper is the new ‘plastic straws.’ Another everyday staple is under scrutiny. An NRDC report details the environmental and social harm wrought by tissue paper producers’ preference for virgin pulp, including clear cutting of global forests needed for carbon storage and habitat for animals and people. Share it.

9. Impact alpha in impact tech. Each year since 2012 “impact tech” companies at startup network Techstars have outperformed the broader portfolio. The new analysis “validates the alignment between investing and impact in our core business,” says Techstars’ Zoe SchlagA look at the trends.

The Week’s Dealflow

Inclusive finance. Patch Homes raises $5 million for debt-free home refinancing… OkCredit raises $67 million to bring digital services to India’s small shops… Airbnb to invest $25 million in affordable housing and small business in California.

Opportunity Zones. SoLa Impact launches “The Beehive” in Los Angeles to attract Opportunity Zone operating businesses with co-working space, creative offices and shared amenities… Five cities join Rockefeller Foundation-backed Opportunity Zone ‘academy.’

New schooled. Mumbai’s WhiteHat raises $10 million to teach students to code… KickUp raised $1.8 million to help school districts implement and track the impact of teacher training and professional development.

Impact gaming. Classcraft raises $7.5 million to gamify K-12 curricula… Paris-based Studytracks secured €1 million to produce rap songs and dance videos that help students learn about science and Shakespeare.

Impact tech. Omidyar Network backs Picterra to democratize geospatial mapping… Bengaluru-based Acculi Labs secures angel funding for health diagnostics in remote locations.

Circular economy. Truman’s raises $5 million from Germany’s Henkel for green cleaning products.

The Week’s Talent 

Saida Eggerstedt, ex-of Standard Life Investments, joins Schroders as head of sustainable credit… Stephanie Cohn Rupp joins Veris Wealth Partners as chief operating officer… Drone operator Zipline adds U2’s Bono as a director… Kate Ahern, ex- of Bain Capital and the Case Foundation, joinsCartica as managing director and head of ESG… Nuveen CEO Vijay Advanijoins the board of directors of the Global Impact Investing Network… MIT’s Ernest Moniz, Rockefeller Foundation’s Rajiv Shah, and Africa Development Bank’s Akinwumi Adesina will co-chair Rockefeller Foundation’s new Global Commission to End Energy Poverty.

The Week’s Jobs 

Emerson Collective is hiring a portfolio director of environmental justice in Palo Alto… Candide Group is recruiting a portfolio manager for its Olamina Fund… Impact Investment Fund seeks a chief investment officer in Melbourne… New Forests is looking for a part-time sustainability analyst in San Francisco…

Accion is hiring a program coordinator on its global investments team… Nonprofit Finance Fund is looking for a loan officer in New York… Los Angeles Cleantech Incubator is hiring a fund management analyst… Building Markets is looking for a financial consultant in Myanmar… Amsterdam-based impact investor Triple Jump has an opening on its fund investment team.

Thank you for reading.

– Sept. 20, 2019

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