The Week in impact investing: Multi-sector

TGIF, Agents of Impact! 

🗣️ All together now. First came the scientists, who got the attention of reinsurers attuned to long-term risks. That spurred insurers to underwrite for climate risk. Which awakened concerns about financial stability among some regulators. Activists and advocates have been ringing alarm bells for decades. “Suddenly now you have risk managers and then shareholders and investors and then companies,” as Morgan Stanley’s Audrey Choi said this week, all focused on the implications and exigencies of our changing climate (see No. 1, below). Private capital is poised to flow, but investors are not naturally positioned to lead. As COP26 gets underway this weekend, stakeholders in every sector await sure signals from political leaders that the world is ready to move. – David Bank

🌍 Next Call: Financing growing businesses: Live from Nairobi. Agents of Impact Call No. 34 will explore new channels for providing equity, debt and catalytic capital for growing businesses in emerging markets. Answer the Call, Tuesday, Nov. 16th at 8am PT / 11am ET / 7pm Nairobi. RSVP today. 

🎧  Impact Briefing. Podcast host Brian Walsh is heading to COP26. On this week’s podcast, he enlists roundtable regulars Imogen Rose-Smith and David Bank to sort out what’s at stake at the climate summit and what could handicap the chance of success. Plus, the headlines. Tune in, share and follow us on Apple, Spotify or wherever you listen.

The Week’s Agent of Impact

Konda Mason, Jubilee Justice. Konda Mason’s move from managing jazz musicians to financing regenerative farmers “felt pretty seamless to me,” Mason said at the Global Impact Investing Network’s Next Normal Now convening this week. The musicians and farmers are both “mostly Black men and women working on the edges of society. Everyone depends on them for soul foods – whether that’s jazz or whether it’s food.” And both are generally underpaid and marginalized economically. Only about 44,000 Black farmers remain in the U.S., down from more than a million in the 1920s. Mason is helping hundreds of farmers in Louisiana and Mississippi raise yields and income while reducing methane and water use with a proven system of rice intensification. Jubilee Justice provides flexible capital, technical assistance and market access. “It’s happening with Black farmers being in the front of the line this time instead of the back,” Mason says.

Jubilee builds on Mason’s track record at “the intersection of land, race, money and spirit.” She is a powerful voice and network connector in Oakland, where she co-founded Impact Hub (now Evolve Oakland), hosts the Brown Rice Hour podcast and directs strategy at Runway, which provides “friends and family” loans for Black entrepreneurs. For years, Mason co-produced the Oakland-based Community Capital, or COCAP, conference to amplify the voices of community activists and investors. Regeneration is about more than agriculture, she says. With Jubilee, and partner fund Potlikker Capital, Mason and her team “put life at the center of every decision.” Time is ticking on an unjust system and degraded planet. “Get proximate,” says Mason. Too often investors remain at a distance from critical issues and it keeps them from acting, she adds. “Come closer.” – Dennis Price

• Share Konda Mason’s story and like it on Instagram.

The Week’s Big 7

1. The Call: Using catalytic climate capital to fill financing gaps from the bottom up (video). Innovators laying a foundation for long-term impact charted a path on this week’s Agents of Impact Call. Prime Coalition, Breakthrough Energy, the LEAF Coalition and many others are identifying gaps in climate finance and deploying catalytic capital to bridge them. “That’s ultimately how we mobilize real capital,” said MacArthur Foundation’s John Balbach. Case in point: Bill Gates-backed Breakthrough Energy Catalyst is blending finance to demonstrate climate technologies’ commercial viability, and brokering corporate “off-take” commitments to scale production for critical solutions, such as green jet fuel and carbon capture tech. Said Breakthrough’s Jonah Goldman: “Transitions are made when things are done either better or cheaper.” Recap and replay. 

• A lexicon of catalytic climate capital. Hertz’s $4 billion order of 100,000 Tesla Model 3s to revamp its rental fleet underscored the power of corporate purchases, or off-take agreements, to drive adoption of new technologies. Other key terms: First-loss guarantees, blended finance and concessionary loans. Green glossary. 

2. Pandemic-propelled health innovators. Scenes of overrun and under-supplied healthcare facilities from New York to Delhi spurred stopgap solutions that are now becoming long-term health innovations. Oxygen Hub is pioneering a franchise model to help African entrepreneurs supply medical oxygen to local health centers. “We’re seizing the renewed attention to this crisis and building something that will last well beyond COVID,” Oxygen Hub’s Effeson Hailemichael told ImpactAlpha. Dive in.

• Investing in Health. Johnson & Johnson Impact Ventures is sponsoring ImpactAlpha’s coverage of purpose-driven entrepreneurs and impact investments improving health outcomes for underserved communities around the world. Check it out.

3. Regeneration for climate and community. Regenerative practices “leverage the power of investment to right wrongs, to reverse harm that has been done in the past, and to replenish and restore ecosystems and natural stops to critical thresholds,” the Global Impact Investing Network’s Amit Bouri said at Next Normal Now this week (ImpactAlpha is the series’ media partner). Hear how, from Jubilee Justice’s Konda Mason (see Agent of Impact, above), rePlant’s Robyn O’Brien and Volans’ John Elkington. Tune in. 

• More normal. Catch up on earlier sessions in the series with, “Inclusion is driving growth in the Next Normal Now,” and “Wanted: safe, simple, scalable investments to drive capital to climate solutions.”

4. Empowering workers through ownership. Businesses as different as King Arthur Flour, Recology and Namaste Solar are all employee-owned. Helping businesses transition to employee ownership is an immediate way that impact investors can benefit owners, support workers, and transform local communities. Employee ownership is “a proven tool to fight the systemic inequalities in our economy,” writes Kendeda Fund’s Diane Ives. “It’s bold – but it’s not risky.” Get her take.

5. Patient capital for Black-owned businesses. “Minority-owned businesses that have survived for years with little access to capital tend to be led by battle-tested owners,” writes George Ashton of LISC. In a guest post, he calls on community development financial institutions and small business lenders to change the trajectory for owners, employees and communities by meeting established businesses’ need for growth and operating capital. Step up.

• Institutionalizing racial equity in community investing. Today is the deadline for comments on the modernization of the Community Reinvestment Act (for background, see “Racial equity planks in a new Community Reinvestment Act can expand the American Dream“). “We must do so with the focus of eliminating the disparities it was designed to address decades ago,” writes National Community Reinvestment Coalition’s Dedrick Asante-Muhammad. Guest post.  

6. Down year for blended finance. The pandemic cut funding for blended finance deals that leverage public or philanthropic capital to increase private investment in sustainable development. But blended financing was already struggling to gain traction, according to “The State of Blended Finance 2021,” from Convergence. “The field is nowhere at the scale it needs to be,” said Convergence’s Joan Larrea. Get the full story.

7. Data-for-decision-making. This week’s short video from the new Coursera course, “Impact Measurement and Management for the SDGs,” developed by CASE at Duke and the U.N. Development Programme, helps investors improve their impact decision-making capability by adding the five impact dimensions to their measurement practices. Go deeper.

• Catch up. Other videos from the course: “Assign an ABC goal type to each investment,” “What are the five dimensions of impact?” and “Where are you on your impact management journey?”

The Week’s Dealflow

Spotlight: Countdown to COP. Climate dealmaking ahead of the COP26 climate summit in Glasgow is, um, heating up. Just Climate, a new fund from Generation Investment Management, will invest in capital-intensive climate solutions. “We are at the point where we have that multi-sector alignment, and we are finally generating the momentum,” said Generation co-founder Al Gore. Just Climate is a partnership with Goldman Sachs Asset Management, Microsoft Climate Innovation Fund, Ireland Strategic Investment Fund and Harvard Management Co. Learn more.

• Low-carbon transition. Enpal, a German residential rooftop solar startup, secured $172 million… AutoGrid Systems scored $85 million to provide virtual power plants for renewable project developers and energy-as-a-service companies… Special purpose acquisition company RCF Acquisition Corp. is looking to invest in value chains for minerals important to the energy transition… Via Separations raised $38 million to electrify and decarbonize high-emission industrial processes… CDC Group invests $70 million in BP-backed climate fund for India.
  
• Climate tech. European climate tech fund World Fund launches to displace 100 megatons of CO2 emissions per year… Persefoni scores $101 million for carbon management software… Pledge secures $4.5 million to help ride-hailing, travel and transport companies and their customers offset their carbon emissions… German micro-mobility sharing app TIER rakes in $200 million to deploy e-scooters, bikes and mopeds in Europe.
  
• Green hydrogen. Singapore’s H3 Dynamics closes $26 million for hydrogen-powered air cargo and logistics… Germany’s Sunfire raised $125 million to produce green hydrogen to decarbonize industrial companies. 

Health innovation. Lab-grown breast milk maker BIOMILQ scores $21 million from investors including Breakthrough Energy Ventures and Blue Horizon Ventures… Farmacare raises seed funding to digitize community pharmacies in Indonesia… Credit Suisse and BlackRock co-launch a health and wellbeing fund to attract private wealth investments to physical, mental and financial health.

Fund launches. Jay Z’s impact-focused investment firm Marcy Venture Partners closes its second fund at $325 million… Social Impact Capital raises $42 million to back potential ‘impact unicorns’… Black Vision fund raises $25 million to support Black-owned small businesses… New fund aims to support Africa’s creative entrepreneurs.

• Fund milestones. Builders Fund clinches $50 million to invest in growth-stage impact companies… Fifty Years raises $90 million for high-impact bets on deep tech.  

Agrifood investing. DeHaat secures $115 million to expand its farmer marketplace in India… ABC Fund backs Benin’s Union Nationale des Caisses Rurales d’Epargne et de Prêt to provide microloans and credit to smallholder farmers.

Small businesses. Nigerian neobank Brass clinches $1.7 million to provide digital banking services to small businesses… The National Bank of Iraq secures a $10 million debt investment from the International Finance Corp. to increase access to loans for Iraq’s small businesses.

Affordable housing. Australia’s For Purpose Investment Partners launches a $250 million fund to invest in social and affordable housing for women over the age of 55.

Education and skills. Aprende Institute raises $22 million to provide online vocational training in Latin America.

The Week’s Talent

U.S. Treasury Secretary Janet Yellen appoints Janis Bowdler, ex- of the JPMorgan Chase Foundation, as counselor for racial equity… Kristin Ihnchak, ex- of Chicago Metropolitan Agency for Planning, joins Greenprint Partners as director of equitable planning… Perry Clarkson is promoted to principal at SJF Ventures… Megan Rose Dickey, ex- of Protocol, joins Backstage Capital as chief content officer… Jacqueline Goodman is promoted to associate at SJF Ventures.

RSF Social Finance adds five new staff members: Ali Robinson and Michael Jones join as senior relationship managers in lending; Dana Stranz comes on as director of credit and portfolio management; Ellie Pickrell joins as relationship manager in lending; and Vic McKellips as client development manager… Former Greenpeace activist Steven Guilbeault is Canada’s new minister for environment and climate change… Sabina Curatolo is departing as Impact Investing Australia’s acting CEO.

The Week’s Jobs

JLL seeks a global energy and sustainability director in New York… E Pluribus Unum is hiring a director of philanthropy and strategic partnerships in New Orleans… Democracy Works seeks a chief executive officer… Long-duration storage startup Noon Energy is looking to fill several positions… WWB Asset Management is hiring a social impact manager… Capital Impact Partners is looking for an investment analyst in Arlington, Va… Cisco seeks a climate impact portfolio manager. 

S2G Ventures is recruiting a corporate development associate in Chicago… World Wildlife Fund is hiring an impact investing specialist in Washington, D.C… Dalberg seeks project managers in its Mexico City and U.S. offices to lead social impact-focused strategy engagements… Candide Group’s Olamina Fund is hiring a portfolio manager… The Ford Foundation is looking for a manager of portfolio operations in New York. 

The ImPact is looking for a West Coast community manager… Urban Institute is hiring a director of federal equity initiatives and a director of racial equity analytics… The Miller Center at Santa Clara University is looking for a senior director of programs… Pacific Community Ventures has openings for a chief impact officer, a credit analyst for small business lending, and an impact investing intern… The National Center for Family Philanthropy is hiring a program director in Washington, D.C.

That’s a wrap. Have a wonderful weekend. 

– Oct 29, 2021