The Week in Impact Investing: Open-source Impact

TGIF, Agents of Impact!

• Green ownership and Black wealth
• Larry Fink changes the subject
• Financing the phase-out of coal

🗣 Green ownership and Black wealth. Long-running threads of ImpactAlpha’s coverage converged in Amy Cortese’s takeout on the centrality of ownership models – of homes, businesses and community assets – in the rollout of climate-smart infrastructure financing through the EPA’s Greenhouse Gas Reduction Fund. (Amy and I also previewed the players and coalitions building the distributed “green bank”). “There just isn’t a path to a national clean energy infrastructure without distributed ownership,” says BlocPower’s Donnel Baird. The converging tracks of climate action and the ownership economy will be on the agenda as well at SOCAP, the annual social capital gathering in San Francisco in October. Organizers have just opened voting for the more than 400 SOCAP Open sessions proposed by Agents of Impact across the landscape. It’s an eye-opening tour of innovation and commitment, and ImpactAlpha is keen to help elevate standout sessions – including our own! Check out Amy’s session on “The Great Deployment,” with Duanne Andrade of Solar and Energy Loan Fund, Beth Bafford of Calvert Impact, and Michael Jeans of Growth Opportunity Partners. ImpactAlpha’s Dennis Price has been invited to engage ReFED’s Alexandria Coari on catalyzing capital for solutions to food waste. And I’m hoping to bring in, by video, Napoleon Wallace of Southern Reconstruction Fund to premiere the documentary we’ve been working on together, “Equity: Napoleon Wallace and the Reconstruction of Black Wealth.” Voting closes Sunday, April 14; send us your favorites with a line or two about why they stand out.

Another thread of our coverage also came together this week with the second edition of ImpactAlpha Latin America, our specialized newsletter covering Latin America and the Caribbean (opt-in here). Dennis’ lead story on Brazil’s emerging impact economy features video interviews with Pretahub’s Adriana Barbosa, Estímulo’s Lucas Conrado, Potencia’s Itali Collini, and Lucas Ramalho Maciel, a force behind Enimpacto, the country’s new National Impact Economy Strategy. “The Latin America newsletter has already made a significant impact in the Brazilian ecosystem,” Vitoria Junqueira of Aliança Pelo Impacto wrote in a note. SVX Mexico’s Laura Ortiz Montemayor contributed a provocative guest post lifting up nature-based solutions for ecosystems and communities. And Jessica Pothering brought together small-business lending and financing for climate solutions in her report on British International Investment’s $75 million green ‘basket bond’. Agents of Impact are converging on solutions, and they’re open-sourcing their code. – David Bank 

The Week’s Podcast

🎧 This Week in Impact. Host Brian Walsh dives into ImpactAlpha’s top stories, with commentary from editor David Bank. Up this week: Tracking the players building the US’s “green bank” to finance climate-smart community infrastructure; catalyzing climate lending to small businesses in emerging markets; and why Brazil is doubling down on the impact economy.

• Listen to the new episode of This Week in Impact. You’ll get the podcast in your feed if you’re subscribed on Apple or Spotify. What are you waiting for? Search for “ImpactAlpha” wherever you listen and hit “subscribe.” While you’re at it, leave us a review.
  
• ImpactAlpha Podcast Network. On Agents of Impact, Sherrell Dorsey chats with Lenore Champagne Beirne of Bright Ventures. On Impact(ed), hosts Lucas Turner-Owens and Eric Horvath explore equitable community lending with Jocelyn Velazquez of IFF, and Ana Ramos of Common Future.

The Week’s Short Signals

🤐 Larry Fink changes the subject. The BlackRock chief has ditched ESG themes in his annual letter for “rethinking retirement.” There are no mentions of diversity. When climate is cited, it is in the context of “energy pragmatism.” There’s even a shout-out to Texas, which has blacklisted the asset manager for allegedly boycotting oil and gas companies. (BlackRock)

💲 Private market ‘impact alpha.’ Fundraising was down in 2023 but emerging managers had a higher success rate than managers as a whole. Impact funds targeting climate solutions are taking a larger share of commitments. And top impact funds are outperforming non-impact peers. (Pitchbook)

🌿 Nature tech VC funding bounce. Food and ag. Land and forestry. Oceans and water. Biodiversity and green supply chains. VC funding in nature-based tech startups around the world increased by 18% to $1.9 billion in 2023. The number of deals jumped 27% to 205. (Serena Capital)

🌏 50+ Asia–Pacific climate investors to know. Among them: Toby Chan Li Tan (Audacy Ventures) and Nicole Lee (The Mills Fabrica) in Hong Kong. Shravan Shankar (Climake) and Shantanu Chaturvedi (Transition VC) in India. Anuj Maheswari (Temasek) and Veronica Yow (The Meloy Fund). (ClimateHack Weekly)

⚠️ Mitigating inequality risk. Widening inequality in the US impacts workplace productivity, customer satisfaction and employee turnover. Investors can urge portfolio companies to share wealth and influence with workers through grievance mechanisms, shared ownership models and other strategies. (The Predistribution Initiative)

The Week’s Deal Spotlight

Trickle of financing to phase out coal. Predictions of peak coal have come and gone as global efforts to phase out the dirty fossil fuel founder in regions reliant on it. “To deliver for climate, we need a rapid and just transition away from coal,” said Tariye Gbadegesin, the new head of Washington, DC-based multilateral Climate Investment Funds. The organization invested $85 million in North Macedonia’s $2.2 billion plan to eliminate coal by 2030. The Balkan country of two million people generates 40% of its power from coal. North Macedonia launched its coal phase-out plan at COP28 last year in Dubai. It is looking to catalyze nearly $600 million in co-financing from the European Bank for Reconstruction and Development, the World Bank, and other public and private investors. 

• On-site, off-grid. The most coal-dependent countries are in Asia. Indonesia and Vietnam are at the center of stalled Just Energy Transition Partnerships, which seek to leverage bilateral and multilateral funding from the Global North to finance the phase-out of coal. British International Investment this week inked its first equity deal in Southeast Asia, backing commercial and industrial solar provider Skye Renewables, which builds on-site clean energy for companies in the Philippines, Vietnam, Singapore and Malaysia. BII’s investment, alongside Japanese oil and gas company Idemitsu Kosan, will support 300 megawatts of new solar capacity and avoid 270,000 tons of annual CO2 emissions by displacing dirty on-grid electricity consumption. The UK development finance institution also this week invested $13.5 million in Singapore-based Clime Capital’s second Southeast Asia Clean Energy fund. 

• Appalachia’s just transition. In the coal stronghold of the US, the Department of Energy is channeling $81 million to Florida-based Rye Development to build a pumped hydro-energy storage facility on a former coal mine in eastern Kentucky. Funding for the Lewis Ridge project, which comes from the bipartisan infrastructure law, supports “transforming a former mining site into a long-term economic engine for the region,” Rye’s Paul Jacob said. Rye estimates the project will create 1,500 construction jobs. The company will partner with nonprofit Shaping Our Appalachian Region to upskill and hire a local workforce for green jobs.
  
• Share this post. The full roundup of our deal reporting this week is up on ImpactAlpha.com. Go with the dealflow. 

The Week’s Talent and Jobs

💼 See and share more than a dozen impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here.

Cliff Prior will step down from the helm of the Global Steering Group for Impact Investment by the end of September… Bala Nagarajan, formerly of NextEra Energy, joined S2G Ventures as managing director of its energy team… Devin Chesney became interim executive director of Aspen Network of Development Entrepreneurs, replacing Richenda van Leeuwen, who is on extended leave, and Kyle Newell, who has departed the organization.

Verdane added four new employees to its decarbonization team: Erich Becker, a former managing partner of Exergy Capital Management, joined as partner; Christina Levin-Rylander, previously with Northvolt, joined as chief operating officer of Verdane’s Elevate platform; Nikolaj Ager Hamann, previously with Seaborg Technologies, joined as senior decarbonization project director; and Ali Ersoz, a former visiting researcher at Imperial College London’s Energy Futures Lab, joined as principal. 

W.K. Kellogg Foundation promoted Yazeed Moore as its Michigan programs director… Franz Hochstrasser, co-founder and CEO of Raise Green, joined S2 Strategies as an inclusive climate finance senior advisor… Peter Healy, previously with Equilibrium Collaborative, joined Mad Agriculture, the affiliate of regenerative agriculture investor Mad Capital, as director… Electoral reform nonprofit FairVote appointed Meredith Sumpter, former head of the Coalition for Inclusive Capitalism, as president and CEO.

That’s a wrap. Have a wonderful weekend. 

– March 29, 2024