The Week in Impact Investing: How anti-ESG ends

The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣 Beyond the backlash. The culture wars are far from over, but on at least one battlefront the politicians (that means you, too, Vivek Ramaswamy) are throwing in the towel. The backlash stoked by the orchestrated campaigns against “woke capitalism” and, by extension, consideration of the environment, social good and governance in investments and asset management appears to have crested. “ESG” was nowhere to be heard in this week’s Republican debate (here’s Amy Cortese’s nice setup). The anti-woke campaigns “have voters hitting snooze,” Politico reports, citing polls that conservatives don’t want government meddling in business, either. Investors have largely shrugged off the ESG backlash in favor of managing obviously material risks; red states are backing down. Florida Gov. Ron DeSantis didn’t bother to mention Disney or Bud Light. Even the sage Robert Eccles, who delighted in making short shrift of anti-ESG arguments, has moved on. “It was fun while it lasted,” Eccles tells ImpactAlpha

Look for a change of tone from Ramaswamy after he got boos for declaring, “the climate change agenda is a hoax.” With red states reaping jobs and investment from the Inflation Reduction Act, GOP candidates may soon run away from, not towards Ramaswamy’s policy plank of “drill, frack, burn coal, embrace nuclear.” In Hawaii, Elemental Excelerator’s Dawn Lippert is betting instead on resilient microgrids, locally-grown food and community stewardship to help families thrive in the face of climate disasters like this month’s fires in Maui, as Dennis Price reports. For low-income homeowners of color, such thriving requires freedom from predatory loans, the mandate of the $100 million Blackstar Stability Distressed Debt Fund, as Blackstar’s John Green explains in a Q&A with Roodgally Senatus. Women-led social enterprises in Argentina are getting access to cheaper and more plentiful capital, as Dennis points out in his report on Pro Mujer’s rated gender bond on Argentina’s public bond market. In Indigenous communities, Kate Finn of First People’s Worldwide tells Jessica Pothering, Native-led financial lenders and investors are building “trust and ability to deliver capital in ways that are consonant with Indigenous leadership and self-determination.” (See the recap of this week’s Call, “Mobilizing capital in Indian Country,” below.) Agents of Impact are rebutting the risky agenda of anti-climate, anti-equity and anti-business with financial systems that are pro-trust, pro-resilience and pro-community. Politicians can lead, follow, or get out of the way. – David Bank

The Week’s Call and Podcast

Mobilizing capital in Indian Country (video). A growing ecosystem of Native-led entrepreneurs, lenders, financial intermediaries and nonprofits are driving Indian Country’s emerging economy. “It’s kind of an unprecedented time,” exulted Change Lab’s Heather Fleming, a business incubator and lender in Navajo Nation, on this week’s Agents of Impact Call, “Catalyzing capital for Indian Country.” Tens of billions of dollars are becoming available to tribal communities in the US under the American Rescue Plan, the Bipartisan Infrastructure Law, and the Inflation Reduction Act.

  • Seeding opportunities. Indigenous communities remain woefully underinvested. “I would invite investors and impact investors to think about how they can stretch… because Indian Country is growing so quickly,” said Kate Finn of First People’s Worldwide, which published, “Indigenizing Catalytic Capital.” Clay Colombe of Siċaŋġu Co., which oversees the 1,000-head, tribally-owned Wolakota Buffalo Herd, says catalytic grants for feasibility studies, land leasing and infrastructure were crucial to realize the tribe’s vision. “I don’t think you can overemphasize the importance of being first in on some of these really important efforts,” added John Balbach of the MacArthur Foundation.
  • Trusted relationships. What’s new is a robust and growing ecosystem of Native intermediaries through which to channel capital and resources. “There wasn’t a place for communities to seek out that initial guidance and capability,” until recently, said Brett Isaac of Navajo Power, which is helping tribes secure a financial stake in the surge of renewable energy capacity coming online. Chrystel Cornelius of Oweesta Corp. called Native community development financial institutions “the economic engines and pillars of their communities, hands down.” Added Finn, “It’s the Native intermediaries who have that trusted relationship and who can build that capital.”
  • Read Jessica Pothering’s full recap, watch the replay, and catch the highlights on this week’s Impact Briefing podcast, with host Brian Walsh.

The Week’s Dealflow

Deal spotlight: Reforesting the Amazon. Nature-based solutions “could help reduce one-third of the necessary global emissions by the end of the decade, but remain grossly underfunded,” said Maria Kozloski of the Rockefeller Foundation. The foundation this week invested $5 million in the Amazon Reforestation Fund as part of Rockefeller’s climate strategy focused on nature-based solutions and decarbonization. Canada’s Pension Plan Investment Board committed up to $30 million to the fund, which was launched in December by Brazilian carbon removal startup Mombak; the Canadian pension also invested $500,000 in Mombak. The Amazon Reforestation Fund has raised $100 million for projects that generate high-quality carbon removal credits, improve soil quality, enhance biodiversity and create local jobs. 

  • Forest protection. Under Brazil’s President Luiz Inácio Lula da Silva, deforestation rates have plunged in the Amazon (see, “Revived Amazon alliance takes steps to protect forests and communities). Designating protected areas and paying forest communities to keep forests intact are among the most successful strategies for halting deforestation, according to a recent study by Conservation International. The Reforestation Fund’s first project will plant three million trees in Northern Brazil, including more than 100 native and endangered species.
  • Credible carbon credits. Mombak expects to plant more than one million trees by next month and create 50 local jobs. Carbon credits generated by the project are fetching a premium price of more than $50 per ton. Mombak’s goal is “to create the world’s highest-integrity carbon projects,” says CEO Peter Fernandez. The Sao Paulo-based firm is looking to deploy $1 billion over three to five years.
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Agrifood investing. Goodwell Investments invested in Rwandan fresh foods producer SOUK Farms… Insaan reupped in Indian cleantech and agtech distributor Essmart… Root Capital provided $300,000 in debt to Ghana’s Oyster Agribusiness.

Clean energy. Invenergy Renewables, Blackstone and Canadian pension manager CDPQ acquired 14 wind and solar projects from American Electric Power in a deal valued at $1.5 billion.

Fund news. A Kennedy cousin is looking to raise $35 million to invest in disability services… New Summit Investments secured close to $40 million for its third impact fund.  

Good jobs. Borderless raised €3 million to fill the UK’s shortage of workers in the care sector… Local investors helped Ditiro Capital raise $14.5 million for job creation in South Africa… Teamshares raised $245 million for small business employee stock ownership.

Investing in health. Backpack Healthcare acquired Hurdle Health for inclusive mental health care… Cressey & Company acquired Health Drive from Bain Capital Double Impact… Visana Health scored $10.1 million to provide value-based care to women… Town Hall Ventures led a $60 million investment in cancer care provider Thyme Care.  

Low-carbon transition. Germany’s Leonardo snagged €555,000 for science-based sustainability and impact data collection and verification… Toyota Ventures’ Climate Fund led an equity round for Yard Stick, a tech startup developing a process for measuring soil carbon… Electric Era raised $11.5 million in a Series A round led by HSBC Asset Management to make fast chargers for electric vehicles… Rondo raised $60 million to electrify industrial processes… GEF Capital Partners raised $214 million for its third LatAm Climate Solutions Fund. 

Milestones. Greenhouse farming venture and public benefit corporation Got Produce Global Brands inked an agreement with the UN World Food Programme to support sustainable food production in Africa, starting in Namibia.

Returns on inclusion. The US Department of Energy is allocating $70 million to historically-Black colleges and universities and other institutions serving diverse populations to diversify science, technology, engineering and mathematics talent and research. 

Small business. Zanifu raised $11.2 million led by Beyond Capital Ventures, to expand access to credit to small retailers and distributors in Kenya… Autolab raised $4.1 million to help independent auto mechanic shops in Mexico and Colombia digitize operations and schedules and find new customers, such as corporate fleet owners… Channel19 raised $2.7 million to digitize small trucking companies in the US. 

The Week’s Talent

Mark Carney, former Bank of England chief, will chair Bloomberg’s new board of directors (see, “Mark Carney, Agent of Impact”). Bloomberg also announced several promotions, including Vlad Kliatchko to CEO, JP Zammitt to president, and Patti Roskill to chief financial officer… Kevin Knobloch, an Obama administration energy official, will replace Jason Hanna as CEO of climate-tech incubator Greentown Labs.

Matt Eggers, ex- of Breakthrough Energy Ventures, joined Prelude Ventures as managing director… This year’s Echoing Green Fellows include Feed Black Futures’ Ali Anderson, Shiluba Mawela of Tshiamo Impact Partners, and the Rainmaker Enterprise’s James Thuch MadhierJeff Barker, ex- of KBR, joined Nexus PMG as head of corporate business development… MaC Venture Capital appointed Jennifer Randle, ex- of The Chernin Group, as chief operating officer.

The Week’s Jobs

💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.

In the US

In New York: S&P Global has an opening for an ESG client engagement specialist; JPMorgan Chase is recruiting a vice president of impact finance credit solutions; SJF Ventures is hiring senior analysts in New York and Durham, NC; Google seeks a program manager of global sustainability stakeholder engagement in New York or Reston, Va. 

MassMutual is recruiting a head of its First Fund in Boston… Living Cities is looking for a city and community engagement assistant director in Washington, DC… Cook Inlet Lending Center is hiring a business lending manager in Anchorage, Alaska… Nia Impact Capital is looking for an equities analyst in Oakland… Builders Vision has an opening for a senior investment accountant in Chicago. 

Global locations

The Gates Foundation seeks a women’s economic empowerment senior program officer in Johannesburg… Founders Factory Africa is hiring a head of ESG integration in Lagos… Impact Expansion seeks a private equity impact investing analyst or associate in Brussels… Big Society Capital is hiring a venture investment manager in London… Triodos Bank has an opening for an internal investment associate for catalytic investments in The Netherlands.

Remote jobs

Tides seeks an impact investing vice president… Kiva is recruiting an impact manager for evidence building and technical assistance… CapShift is on the hunt for an impact investing intern and fellow for the fall semester.

Mission Investors Exchange is hiring a communications and marketing associate, a programs coordinator, and a member experience coordinator… The Nature Conservancy is hiring an ocean and climate business innovation manager… Root Capital is on the hunt for a senior manager of foundation relations. 

That’s a wrap. Have a wonderful weekend. 

– Aug 25, 2023