The Week in Impact Investing: Disequilibrium

TGIF, Agents of Impact!

🗣 Punctuated equilibrium. I once had the pleasure of taking a lecture course with the late, great Stephen Jay Gould. My biggest takeaway: evolution happens in jumps, with new species appearing suddenly in the fossil record as markers of disruptive change. If recent years have seen a Cambrian explosion of innovation, the onset of a ground war in Europe – like the racial reckoning and global pandemic before – serves as a filter for the adaptive solutions we need now. Already, Russia’s invasion of Ukraine has proved out flexible strategies to support refugees, and the value of investments in a free and independent press, as ImpactAlpha’s Dennis Price reported this week. In volatile times, employee ownership (thanks, Jack Moriarty) and structures like revenue-based financing (likewise, Kim Folsom) can change the equation of how businesses and jobs survive a shakeout. 

Environmental, social and governance concerns are driving change at corporations like Salesforce and Walmart (see The Call, below). A key marker of evolutionary success: gender and racial parity and balance (see Dealflow). “Our teams, which consist mostly of Black employees and have majority-female ownership, look different than most established investment teams,” Madichaba Nhlumayo, Sindi Mabaso-Koyana and Jesmane Boggenpoel write from South Africa. “This means we also think differently.” Different thinking is essential at a time when words like surprising, unprecedented and transformative dominate commentary around the global response to Russia’s invasion of Ukraine. A world out of balance can also produce an evolutionary leap forward. – David Bank, editor and CEO

🎧 Impact Briefing. Host Brian Walsh catches up with ImpactAlpha’s Jessica Pothering from Cape Town, South Africa to talk about women driving alpha in emerging markets. And we hear from Harlan Mandel of Media Development Investment Fund on investing in a free press in countries that need it most. Plus, 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

Call No. 39: Moving from ESG talk to action inside big companies (video). It’s one thing for a corporation to set environmental or social goals. It’s another to shift executives, employees and supply chains into action. Take “net zero,” the goal of balancing the carbon a company emits with the carbon it removes from the atmosphere: “For a company like Walmart, getting to net zero essentially means the whole world has to transition to net zero. I’m not joking,” said Brendan Morissey, vice president of ESG at Walmart, which has a supply chain of tens of thousands of companies. “The question is, ‘What role do we play in helping to catalyze the right type of activity and move the ball forward?’” On ImpactAlpha’s Agents of Impact Call, Duke University’s Cathy Clark grilled Morissey, along with Sunya Norman, Salesforce’s VP of ESG, about how the two global corporations are moving from talking about environmental and social values, to executing on ESG goals on behalf of all stakeholders.

• Supply chains. The bulk of Walmart’s emissions are in the production of the goods it sells and their use by its customers. With Project Gigaton, Walmart has signed up more than 3,000 suppliers to set reduction targets, and offers low-cost financing to help meet those targets. In four years, Walmart has reduced or avoided a half-billion tons of greenhouse gasses – halfway to its goal of a gigaton reduction by 2030.
  
• Stakeholder engagement. Salesforce works with customers, employees and community activists, as well as investors, to set ESG priorities. At issue is not only what is material to the company’s business, Norman said on The Call, “but also what they’re observing in terms of the impact we’re having on the environment and society.” Salesforce last month moved to tie ESG goals to executive compensation, a practice now in place at one in five companies on the S&P 500. “This just adds another layer of accountability that is a really important signal to everyone at the company.”
  
• Universal steps. If ESG inside corporations has often meant ticking boxes and producing reports, it “now is much more of a codebook to how you operate in a strategic way within the guidelines of what the planet can handle,” said Clark. Her course, “ESG and impact management for enterprises,” provides a framework. “It’s pretty easy to count up some things and stick them in a report,” she says. “It’s not easy at all to figure out what the levers are inside your company that you might actually want to push in a different way.”
  
• Keep reading, “Call No. 39: Moving from ESG talk to action at major corporations,” on ImpactAlpha and catch the replay.

The Week’s Dealflow

Deal spotlight: Gender alpha. Women fund managers are looking to drive capital to businesses owned and led by women. Ford Foundation re-upped its investment in Fairview Capital Partners, a Black-led fund of funds, with a $60 million allocation; Visa Foundation joined as well, as part of an initiative focused on emerging women fund managers. Separately, South Africa-based Womvest, a network of 700 women, is piloting a fund with Secha Capital to provide working capital to businesses in Secha’s portfolio, with incentives for meeting gender-related goals. USAID’s Kristin Kelly Jangraw rounded up insights from a half-dozen impact investors on how women drive alpha.

• Women rising. Nigerian gender-lens fund Aruwa Capital backed cold-chain company Koolboks… Woman-led health tech venture Jude snagged €2.4 million ($2.6 million) in pre-seed funding to make plant-based and biodegradable bladder-care supplements for women. 

Agrifood investing. Egypt’s FreshSource raises seed funding to facilitate contract farming and reduce food waste in the country… In Ovo raises €34 million to improve poultry welfare and sustainability… Otipy raises $32 million to reduce waste by purchasing fresh produce directly from India’s smallholder farmers… Clean Crop Technologies raises $6 million for food safety and reduced waste… Mi Terro scores $1.5 million to make compostable plastic packaging using agricultural waste… Protenga raises $2 million to convert waste into protein for animal feed and fertilizer for farmers in Southeast Asia.

Clean energy. Erthos clinches $17.5 million to cut solar costs by installing panels on the ground… Off Grid Electricity backs Solengy’s solar products for rural Haiti… South Korea’s SK Group invests $100 million in 8 Rivers’ cleantech solutions… Norfund and CDC Group invest 600 million rand in H1 Capital, a Black-owned and managed renewables investment and development company in South Africa.

Inclusive fintech. Bangalore-based Money View scores $75 million to increase access to credit for borrowers overlooked by traditional banks and lenders in India… Nigerian neobank Yep! secures $1.5 million to bank “offline” rural Nigerians, small businesses and merchants.

Climate finance. Aether raises $18 million to convert atmospheric CO2 to diamonds… U.K.-based EV charging startup Bonnet secures $5.5 million to expand internationally.

Fund news. Brazil’s Cloud9 raises 280 million reais to invest in startups overlooked by traditional venture capital funds… Dolma Impact Fund raises over $50 million for sustainable investments in Nepal.

Impact management. Socialsuite, an Australian ESG and social impact disclosure platform, raises $4.3 million in Series A funding.

Investing in health. Big Bold Health secures $4 million in Series A financing led by S2G Ventures for nature-based immune health solutions.

The Week’s Talent

The Reinvestment Fund promotes Cheila Fernandez to chief operating officer and Sara Vernon Sterman to chief program officer… Kristina Wyatt, ex- of the Securities and Exchange Commission, joins Persefoni as deputy general counsel and senior vice president of global regulatory climate disclosure… Adam Connaker, ex- of the Rockefeller Foundation, joins Surdna Foundation as director of impact investing… Scott Nathan, formerly of the White House Office of Presidential Personnel, becomes the U.S. International Development Finance Corp.’s new CEO… Alex Kravitz, ex- of SOCAP, joins the Island Institute’s Community Impact Fund as a senior officer.

The Week’s Jobs

The Center for Popular Democracy has openings for a co-director for justice transformation and a deputy director for justice partnership… American Forests is looking for a forest carbon analyst in Washington, D.C. or Baltimore… Sunwealth seeks a project development associate in Cambridge, Mass… Acumen West Africa is hiring a senior portfolio associate in Lagos… BlackRock seeks a vice president of sustainable product innovation in New York.

Autodesk Foundation is hiring a portfolio associate in San Francisco or Boston… The Nature Conservancy is hiring a communications manager for NatureVest, preferably in Washington, D.C. or New York… Ceniarth seeks an analyst in London… Accion is looking for a senior manager of strategic partnerships and a senior director of strategic institutional partnerships in Washington, D.C. or Baltimore… MSCI seeks an ESG corporate governance researcher in Toronto.

Phenix Capital has an opening for an impact investing fundraising intern in Amsterdam… ProFellow rounds up a dozen venture capital and impact investing fellowships… Whole Planet Foundation is looking for a program manager for the Asia / Pacific region… Steward seeks a remote senior loan underwriter in Oregon… The Bridgespan Group seeks a remote impact investing manager in the U.S… ReGen Network has openings for engineers.

That’s a wrap. Have a wonderful weekend. 

– Mar 11, 2022