TGIF, Agents of Impact!
Dissenters’ journey. First they ignore you. Then they laugh at you. Then they fight you. Then you win. That description of history’s path is often attributed to Mahatma Gandhi (though trade unionist Nicholas Klein said something similar in 1918). It well describes the life and legacy of Ruth Bader Ginsburg, this week’s Agent of Impact (see below). At the ACLU and on the Supreme Court, Ginsburg scored many legal wins for women, and the rest of us. To Ginsburg, her losses were just as purposeful. “The greatest dissents do become court opinions, and gradually over time their views become the dominant view,” Ginsburg told NPR in 2002. “That’s the dissenter’s hope: that they are writing not for today, but for tomorrow.” Agents of Impact working to redefine fiduciary duty and hold corporations accountable (No. 1), mitigate systemic risks (No. 5), and center anti-racism in the design of the new economy (No. 2) can take inspiration from Ginsburg’s frequent sign-off: “I dissent.” Today’s dissenting approaches in business and finance are becoming tomorrow’s rules of the road.
– Dennis Price
Impact Briefing. On the podcast, host Monique Aiken recaps this week’s Agents of Impact Call on designing new algorithms for racial justice. And we honor the late Supreme Court Justice Ruth Bader Ginsburg, this week’s Agent of Impact. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 9
1. The new ‘pro-business.’ Someone please tell the Trump administration that sustainability, inclusion and stakeholder accountability are the necessary ingredients for long-term prosperity. Pro-business is urgent action to mitigate the climate emergency. Pro-business is crushing the pandemic. Pro-business is eliminating systemic bias. Pro-business is free and fair elections and the peaceful transfer of power. Call it out.
- Corporate commitments. Connecticut State Treasurer Shawn Wooden and the Ford Foundation enlist BlackRock, Goldman Sachs, State Street and other companies to take “concrete actions” to confront racial economic disparities in the U.S.
2. Recoding finance for racial justice. Agents of Impact are calling out the ways racism shows up across the economic landscape. New strategies and designs “center Blackness and the Black experience” in municipal finance, asset allocation and corporate impact. As Anne Price and her team at the Insight Center put it, centering Blackness is a “necessary strategy to ensure economic liberation for all Americans.” Be proactive.
- Sound bites. Tune in to this week’s Impact Briefing for choice excerpts from Agents of Impact Call No. 23: Changing the investment algorithm to advance racial justice. We’ll have the full roundup, resources and replay next week.
3. What do CDFIs really need? Equity. The bulk of recent commitments to community development financial institutions from big companies like Google, Netflix and PayPal take the form of low-risk deposits and loans. Deposits can help CDFIs expand financing for small businesses, affordable housing and nonprofits. But “equity is what matters” to really advance CDFIs’ ability to address economic exclusion and structural bias, Laurie Spengler of Courageous Capital Advisors and George Surgeon of GSJ Advisors argue in a guest post. Here’s why.
4. Corporates set sights on ‘net zero.’ More than 1,500 companies, with combined revenues of more than $11.4 trillion, have pledged to reach net zero carbon emissions by 2050. A few are targeting 2040. Real leadership: 2030. Companies are getting more serious, says Danielle Fugere of As You Sow. Zero in.
5. Climate stewardship leaders and laggards. “To investors’ portfolios, the systemic risk of climate change is large, material, and undiversifiable,” writes the corporate accountability group Majority Action. To try to mitigate such risks, Legal & General and PIMCO voted most often against corporate management, the group found in an analysis of asset managers’ U.S. proxy voting records. In contrast, BlackRock and Vanguard are a “roadblock for global investor action on climate.” Step it up.
- Breach of duty. The U.S. Securities and Exchange Commission voted 3-2 to make it harder to file shareholder resolutions, which have often served to alert corporate management to emerging risks.
6. Electricity is digitizing, decentralizing and decarbonizing. Emmanuel Lagarrigue, chief innovation officer for Schneider Electric, worried the pandemic would stall momentum toward a clean energy economy. Instead, “the crisis, and especially the oil and gas price war, are just accelerating the energy transition,” he tells ImpactAlpha on an Agents of Impact podcast. The future of energy: digitized, decentralized, decarbonized electricity. Get his take.
7. IFC outperforms in emerging markets. The International Finance Corp. beat the S&P 500 by about 15% over the last 50 years in an analysis of the multilateral finance institution’s emerging markets equity investments. The differentiator: the IFC’s impact investing lens, Hans Peter Lankes writes in a guest post. “Its mandate for impact led IFC to find equity opportunities that other investors missed.” Get the scoop.
8. DWS’ impact shakeup. The $869 billion wealth management firm, a spin-out of Deutsche Bank, has cut back its New York-based sustainable investing team and shelved several impact funds. In doubt: a planned $300 million fund for renewable energy in Africa that already had secured an $80 million commitment from the Green Climate Fund. Keep reading.
9. Social entrepreneurship circles in Latin America. Organizations supporting entrepreneurs in Latin America scrambled to help small and growing businesses survive the COVID disruption. They’re turning their new collaboration into an ongoing network to demonstrate a better, more collaborative model for doing business for the rest of the world, Agora Partnerships’ Cecilia Foxworthy told ImpactAlpha. Dive in.
- State of play. Impact investors in Latin America continue to deploy traditional financing structures. Only 5% of deals and 2% of capital deployed in 2018 and 2019 used quasi-equity instruments, according to ANDE’s latest trends report.
The Week’s Agent of Impact
Supreme Court Justice Ruth Bader Ginsburg. The advantages of women’s participation and leadership in business and society have become conventional wisdom. That’s in no small part due to Ginsburg’s decades of work to undo two centuries of legal obstacles. There could be no “gender alpha” without legal advances championed by Ginsburg (women-led businesses are hard to start when you can’t open a bank account without a male co-signer). At the ACLU’s Women’s Rights Project in the 1970s, Ginsburg won Supreme Court cases that nudged the country toward equal rights. As a Justice, she voted to legalize same-sex marriage, uphold racial affirmative action, and recognize the rights of LGBT and people with disabilities. “The concept of ‘We the People’ has expanded” over two sometimes turbulent centuries, she said. Once-excluded African Americans, women, men without property, and Native Americans “are now part of our political constituency,” she said. “We are certainly a more perfect union as a result of that.”
Ginsburg lost fights, too. But her dissents over more than a quarter-century on the bench defined her as much as her successes. The Notorious RBG became famous for her “dissent collar” – the Fearless Girl statue on Wall Street was fitted with a frilly collar this week in her honor. “Hubris is a fit word for today’s demolition,” she wrote for the minority when the Court allowed key parts of the Voting Rights Act to expire in 2013. Several southern states quickly redrew districts, purged voter rolls and set up strict voter identification laws, moves that will serve to suppress voting in November’s U.S. election. Like her careful strategy for building the case for women’s rights, Ginbsurg’s objections had an aim. “The greatest dissents do become court opinions and gradually over time their views become the dominant view,” she told NPR in 2002. “I will not live to see what becomes of them,” added the justice, who died last week at the age of 87. “But I remain hopeful.” – Amy Cortese
The Week’s Dealflow
Returns on inclusion. Mastercard commits $500 million over five years to reduce racial wealth gaps… Lightship Capital invests in fashion brand Haute Hijab… Co-op Cincy and Seed Commons launch $3 million worker ownership fund… MacArthur Foundation commits $25 million to COVID recovery and election integrity.
Frontier finance. Reinsurance firm Africa Specialty Risk Group launches with backing from Helios… Patamar Capital backs Vietnamese fintech Kim An Group to boost small business lending… Bamboo’s Agri-Business Capital Fund lends $1.4 million to support smallholder farmers in West Africa.
Agrifood investing. Green Monday raises $70 million to ramp up alt-protein options in Asia… Brazil’s BeGreen raises $3 million to expand urban farms… Beneficial Returns backs alt-leather manufacturer Ananas Anam with impact-linked loan.
Fund news. Citi Impact Fund invests in female talent, affordable housing and cleaner energy.
The Week’s Talent
Paul Yett, formerly managing director of Hamilton Lane, will lead the firm’s ESG efforts as director of ESG and sustainability… Social Impact Ventures’ Willemijn Verloop, an ImpactAlpha Agent of Impact, will chair the Netherlands new national advisory board to promote impact investment… CASE at Duke’s Cathy Clark, myAgro’s Anushka Ratnayake and Mindtree’s Prashant Mehra are among Schwab Foundation’s Social Innovators of the Year… Szabi Baranyi, ex- of Rensource, joins Sunfunder as a senior investment officer.
Valerie Red-Horse Mohl, ex- of Social Venture Circle and an ImpactAlpha Agent of Impact, joins the East Bay Community Foundation as chief financial officer… David Bohigian, who led OPIC through its transition to the U.S. International Development Finance Corp., launches Pluribus Ventures, an impact-oriented fund of funds… Income Research + Management names Allison Walsh head of ESG and corporate sustainability… Filmmaker Robert Rippberger and Lohas Advisors’ William Nix will co-lead Social Impact Entertainment Society to connect, equip and amplify social impact entertainment organizations and practitioners.
The Week’s Jobs
Closed Loop Partners is recruiting a credit portfolio manager of project finance and a deputy controller and investor relations associate… Arabella Advisors seeks a managing director in Chicago… Ilumen Capital is looking for a bias-reduction intern… Impact Capital Managers is hiring a fall/winter fellow… Walton Enterprise seeks an impact investing associate… Inclusive Prosperity Capital is looking for a solar transaction manager and an associate of market engagement.
Common Future is recruiting a managing director and a chief operating officer in Washington, D.C., New York, Oakland or remote… Gary Community Investments is hiring a mission investments manager in Denver… Goldman Sachs seeks an environmental and social risk associate for its sustainable finance group in New York… The Institute for Local Self-Reliance is hiring a senior policy advocate, preferably in the Washington, D.C. area.
Thank you for reading.
–Sept. 25, 2020