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The Week in impact investing: Impact is tipping



TGIF, Agents of Impact!

The Week’s Agent of Impact

Faheen Allibhoy, J.P. Morgan Development Finance Institution. Most development finance institutions are government-owned entities seeking to mobilize capital from banks and other private investors. Now a major bank is creating its own development finance institution (inside its corporate and investment bank) to help governments mobilize capital for the U.N.’s Sustainable Development Goals. To help it cross sectors, JPMorgan Chase chose a longtime development-finance professional to reach its goal of more than $100 billion a year in development-related investment banking transactions. After 18 years at the International Finance Corp., Faheen Allibhoy says, “J.P. Morgan’s global scale, expertise and suite of financing capabilities provide an excellent platform to make a real difference in emerging markets.”

At the IFC, Allibhoy oversaw the bank’s work in Senegal, Cape Verde, The Gambia, Mauritania, and Guinea Bissau and spearheaded efforts in renewable energy, technology, manufacturing, infrastructure and private equity. She has lived in six countries: Pakistan, the U.A.E., Cyprus, the U.K., the Philippines, and the U.S. And she has crossed sectors before, having joined IFC after working as an investment banker at Merrill Lynch. Allibhoy starts her job Feb. 1 with the clock ticking. The global development community estimates an additional $2.5 trillion is needed each year in order to meet the SDGs by 2030. In a statement, the bank said it expects to attract additional investment into emerging economies, including through blended finance models that connect philanthropic or concessional funds with private capital.

The Week’s Big 5

1. Davos reckoning. A few corporate leaders at the World Economic Forum in Davos raised the stakes in the market-shift toward sustainability. The flurry of announcements masked the reality that most CEOs and investors have yet to adopt serious strategies to mitigate systemic risks, most notably climate change and income inequality. 

  • Inclusion alpha. Goldman Sachs won’t take public companies without at least one diverse board member, starting in July. Next year, Goldman will make that two diverse board members. Over the last four years, CEO David Solomon told CNBC, “The performance of IPOs where there’s been a woman on the board in the U.S. has been significantly better than the performance of IPOs where there hasn’t been a woman.”
  • Share the wealth. The Financial Times’ Andrew Edgecliffe-Johnson reports that at private events in Davos, several executives “insisted social pressure to pay a living wage and the rising cost of buying in new skills in a tight labour market were changing their calculations” about investing in their employees. Example: when PayPal’s Dan Schulman discovered that 60% of his employees struggled to make ends meet, the company raised wages, cut health insurance costs and distributed shares to all employees. 
  • Breathe the rarified air.

2. Reshaping finance. The Davos elite may be grappling with the widespread sense that capitalism must change. ImpactAlpha’s readers are drawing on their experience to model what’s next. More than two dozen Agents of Impact responded to our call for ways to drive systemic change, as part of our What’s Next series with the Global Impact Investing Network.

3. Blending finance for climate infrastructure and Asia-Pacific development. Can $100 million in first-loss capital catalyze $400 million more in institutional capital for climate-related investments in emerging economies? The Hewlett FoundationGrantham Environmental Trust and the German and French governments will find out as asset management giant BlackRock takes a de-risked $500 million private equity fund to institutional investors. Hewlett’s Marilyn Waite details the new partnership and why it should be replicated. Read more.

  • Next frontier. Asia-Pacific is the second most active region for blended finance deals, after sub-Saharan Africa. Convergence’s Adhiti Gupta cites the Tropical Landscapes Financing Facility in Indonesia and the Japan ASEAN Women Empowerment Fund as examples of the market’s potential. Building blocks.

4. Blue like an Orange’s SDG report card (podcast). The investment firm released the rating system it uses to score investments against the SDGs, much like Moody’s scores companies’ credit ratings. “As long as you don’t change the system, as long as you have no incentive built into the system to do the right thing, it’s not going to be enough,” says former World Banker and Blue like an Orange founder Bertrand Badré. “We have to do our best – this is our responsibility – to go way beyond that. That is really the fight of this generation.” Check it out.

5. Circular economy for plastics. China is taking the lead in pushing nations to deal with their plastic problems. Two years after it stopped accepting the world’s plastic waste, China banned non-degradable plastic bags, straws and single-use plastics beginning as soon as this year. Starbucks, Nestle and others are also making moves to reuse, recycle or replace plastic. Get looped in.

The Week’s Dealflow

Breaking news: Omidyar Network spins off Imaginable Futures. The newly independent funder will start its new life with a $200 million portfolio of 100 for-profit companies and nonprofit education and learning organizations. It will have an additional $150 million over four years to fund operations and investments. The spin-off is Omidyar’s sixth; the slimmed-down organization is focusing on reimagining capitalism and beneficial technology. More.

Fund raises. Citi deploys bank capital in $150 million impact fund… SustainVC closes $27 million for early stage sustainability and inclusion startups… Obvious Ventures’ closes third ‘world positive’ fund at $271.8 million… ResponsAbility raises $151 million ‘climate debt’ fund… Brazil’s Positive Ventures raises $5 million to invest in impact startups.

Inclusive economy. Center on Rural Innovation invests in coworking venture… i(x) investments and Green Mesa Capital team up on housing initiative… Catalyst Fund gets $15 million to accelerate financial inclusion in emerging markets.

Climate finance. ArcTern Ventures raises $200 million clean tech fund… Saudi Aramco’s venture capital arm plans $500 million sustainable tech fund.

Food and agtech. Memphis Meats hauls in $161 million to ramp up production of cultured meat.

Farmer finance. IDH raises €100 million to catalyze smallholder farmer finance.

New power. Twin Cities-based Civic Eagle wraps up $1.3 million funding round.

2030 finance. Janngo raises €15 million for African startups targeting the SDGs.

The Week’s Talent

Andrew Siwo was appointed director of sustainable investment at the New York State Common Retirement Fund… Nancy Lindborg, previously of the U.S. Institute of Peace, is the new president of the David and Lucile Packard Foundation, succeeding Carol Larson, who stepped down at the end of 2019… Robynn Steffen, ex- of Omidyar Network, joins the Climate Leadership Initiative as vice president and chief operating officer… Lindsay Smalling is leaving her role as CEO of SOCAP on Mar. 31.

The Week’s Jobs

The Climate Leadership Initiative is recruiting a director of operations in San Francisco… Khan Academy is looking for a chief academic officer in Mountain View, Calif… Global Partnerships’ Social Venture Fund is hiring an investment analyst in Nairobi… Mastercard seeks a manager of social impact in Jakarta… Village Capital is looking for an investment analyst in Mexico City… Fuse Corps is hiring a vice president, director of development and director of strategic partnerships in San Francisco… ClearlySo is looking for a consultant in London.

British Columbia Investment Management Corpseeks an ESG analyst in Victoria… Global Partnerships is looking for a research and impact officer on its capital and impact team in Seattle… MIX is recruiting a senior director of strategic data initiatives in Washington, D.C… Veris Wealth Partners seeks an operations manager in San Francisco… Acre is hiring an ESG research analyst in London.

Thank you for reading. 

— Jan. 24, 2020

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