TGIF, Agents of Impact!
Impact Briefing. On this week’s podcast, host Brian Walsh dissects former BlackRock exec Tariq Fancy’s recent takedown of ESG investing with roundtable regulars Imogen Rose-Smith and David Bank. Plus the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you listen.
Clubhouse conversation. We’ll be on the drop-in audio app to talk about the week’s stories and whatever’s on your mind, hosted by ImpactAlpha’s Lyneka Little. Find us today at 9am PT / 12pm ET / 5pm London. Drop by.
The Week’s Big 8
1. Optimizing the grid of the future. This week’s giant infrastructure plan unveiled by U.S. President Joe Biden includes $100 billion to upgrade the nation’s aging grid for the electrify-everything future. The grid is becoming more like a distributed, two-way internet of energy resources and less like the centralized hub-and-spoke model of the 20th century. Says Schneider Electric’s Emmanuel Lagarrigue: “We are going from a world of utility- or government-driven deployment to a decentralized software world.” Power up.
2. ExxonMobil’s climate reckoning. Divest? Engage? Throw in the towel? The stewardship challenge for asset owners and managers is how to drive fundamental change at the U.S. oil giant. Ahead of next month’s shareholder meeting, a group of investors led by Engine No. 1, is pressing to replace at least four members of Exxon’s board with energy transition experts. Inclusive Capital’s Jeffrey Ubben has opted to join the board. If investors don’t approve major changes this year “then it’s not clear they ever will,” says a person close to Engine No. 1. Keep reading.
3. Overcoming racial bias in asset management (podcast). Institutional investors aim to optimize portfolios to maximize returns and minimize risk. One systemic risk they’re missing: Firms owned by white men manage all but 1% of the $69 trillion in U.S. assets under management. Reducing systemic bias in asset management “can help bring our economy, our GDP, our global prosperity, to a much larger and more optimal goal,” Illumen Capital’s Daryn Dodson tells host Monique Aiken on the latest episode of The Reconstruction podcast. Read on and listen in.
- The Reconstruction. ImpactAlpha’s new series features engaging conversations with leaders of this reconstruction. Meet Melissa Bradley, Rodney Foxworth, Carmen Rojas and others centering Blackness in the service of economic liberation for all. Catch up on Spotify, Apple or Anchor.
- On the beat. The Reconstruction’s landing page on ImpactAlpha has summaries of all of the podcast episodes, as well as original coverage, dealflow, features and Agents of Impact.
4. How first-time fund managers are finding impact alpha. VC Include, which connects diverse general partners with institutional limited partners, awarded fellowships to more than a dozen first-time fund managers targeting under-represented tech founders, food-system entrepreneurs and wealth for workers of color. The intersection of impact and diversity “is so much who we are and who we are networked with,” says Shayna Harris of Supply Change Capital. Dig in.
5. Interrupting racism with restorative capital. Community development financial institutions and other community investors are creating more equitable terms and rewriting the rules of investing to combat legacies of racism and build community wealth.
- Active anti-racism in community lending. Practices borrowed from the legacy financial system can conspire against people of color, writes Joe Neri of IFF, a Chicago-based CDFI. Examples: lending based on appraisals of devalued property in Black communities, and risk-based underwriting that assigns higher rates to vulnerable borrowers. Says Neri, “Our task is to always ask: Why isn’t there equity here, in this place, in this sector, with this product or service?” Five ways.
- Equitable terms. Tired: Am I sacrificing financial returns? Wired: Am I sacrificing impact so I can make more money? (h/t Lauren Grattan) Community Credit Lab’s Sandhya Nakhasi and Ryan Glasgo, with Common Future’s Eric Horvath, say sacrificing impact “leaves power and privilege embedded in capital allocation decisions unchallenged and unchanged.” Change the game.
6. Expanding access to finance in the South. New restrictions on voting in Georgia parallel a lack of financial access across the South, particularly for people of color. “Access to voting is a fundamental right in our democracy,” writes Calvert Impact Capital’s Beth Bafford. “Access to quality, affordable financial services should be a fundamental right in our economy, too.” Dive in.
7. Collaborative lending in Miami. Self-Help Credit Union’s Manuel Costa details how Miami’s Re-Investing in the Small-Business Economy, or RISE fund, disbursed $18 million in low-interest loans to help nearly 1,000 truly small business owners navigate COVID disruptions. The kicker: “We stood up the fund and distributed these loans in roughly seven months,” Costa writes in a guest post. How it came together.
8. Europe’s green growth. Europe’s pension funds, impact investors and investment advisors at Phenix Capital’s (virtual) Impact Summit this week hashed out who will benefit from the E.U.’s ambitious plan to become carbon neutral by 2050. Valuations of companies in renewables, insulation and energy efficiency are rising with “a massive increase in possible upside in the addressable market,” said Luc Olivier of La Financière de l’Echiquier. “That will flow more capital to impactful companies.” What you missed.
The Week’s Agents of Impact
Evette Ellis and Kameale Terry, ChargerHelp. The co-founders of the South Los Angeles-based electric-vehicle charging repair startup could be on a poster for the Biden administration’s American Jobs infrastructure plans. In just under a year, Ellis and Terry have built a tech platform for servicing the emerging network of EV charging stations and making “electric vehicle service technician” a middle-class job accessible to anyone with a high school degree. ChargerHelp technicians get training, wages of at least $30 per hour, and equity in the company. “We see what we’re doing as laying a foundation for workforce development of the future,” Terry told ImpactAlpha. The company’s initial goal was to secure a major contract or two; instead, it has landed seven contracts with national charging networks, including ABB, SparkCharge and EV Connect, where Terry learned the business. This week, Ellis and Terry raised $2.8 million from a half-dozen venture funds focused on clean energy, good jobs and racial justice.
The Biden administration is betting big on electric vehicles. Its infrastructure plan calls for $174 billion to build out the market, including a national network of 500,000 EV chargers by 2030, with strong labor, training and installation standards. “I’m ferocious when it comes to treating our technicians with dignity and respect and equity and paying them,” said Ellis, who witnessed her father treated poorly at work for decades. She won an official designation from the U.S. Department of Labor for “electric vehicle supply equipment technician” to legitimize the career path and help ChargerHelp source talent from federally-funded workforce development centers. Terry says the team is ready to share its experience with Biden’s team. “At the bare minimum, we want to be in the room to dictate what it looks like to do equity,” says Terry. “You can still be a profitable business, you can still be venture backed and pay people all right.” – Dennis Price
The Week’s Dealflow
The Reconstruction. Sunday II Sunday closes a $4.2 million investment for its hair products for Black and Brown customers… Harlem Capital closes its $134 million fund to back diverse entrepreneurs… The Change Company closes $150 million in debt to finance homeownership for Black, Latino and low-income borrowers… Black-led VC fund Gateway Capital Fund raises $6 million to invest in Milwaukee’s pre-revenue startups… MaC Venture Capital raises $110 million for culture-change startups… Greenwood scores $40 million from top financial institutions to bank Black and Latino Americans.
Frontier finance. Root Capital secures $35 million from DFC for lending to rural agribusinesses… Rio De Janeiro-based Vinci Partners closes $1 billion reais to target Brazil’s impact-focused businesses… Gender-lens fund WIC Capital backs Senegalese bakery… Five-Star Business Finance snags $234 million to lend to India’s small businesses… Uganda’s Tugende scores $3.6 million to expand micro-business lending… Nigerian insurance tech venture Curacel scores $450,000 for geographic expansion.
Agrifood investing. Heifer International and the Rwandan Ministry of Agriculture team up to invest in livestock training for smallholder farmers… U.K.-based VFC raises £2.5 million to make plant-based fried chicken… Vertical farming company AeroFarms is planning to go public via a SPAC… The Rise Fund backs plant-based food company Livekindly’s $355 million round… iFoodDS scores $15 million to boost transparency in the fresh-food supply chain.
Inclusive communities. IMPACT Community Capital attracts $130 million to preserve affordable multifamily properties… Toronto-based Dream reaches a first close for its inclusive real estate fund… Capital Impact Partners and CDC Small Business Finance create community investing powerhouse… Chicago PACE secures $4.6 million to support clean energy at a commercial kitchen facility in Chicago.
Skills and education. Edge Pathways raises $8 million to help students from diverse backgrounds attain engineering degrees… Student engagement platform Upswing raises $5 million from Imaginable Futures and JPMorgan Chase… Holberton secures $20 million to expand its “OS of education” programs and tools.
Health and wellbeing. Bangalore’s HealthPlix raises $13 million to help doctors treat patients more efficiently… Cityblock Health rakes in $192 million to provide ‘value-based care’ for low-income Americans.
Retail impact investing. Ethic raises $29 million to grow customized sustainable portfolios for wealth advisors… Green retail investing fintech Sugi raises more than £406,000 on Crowdcube.
Green economy. FTC Solar files for an initial public offering with an eye to raising $100 million.
The Week’s Talent
Charmaine Jackson Mercer is named chief of equity and culture at Hewlett Foundation… Thane Kreiner, ex- of the Miller Center for Social Entrepreneurship at Santa Clara University, joins the Marin Agricultural Land Trust as CEO… Kate Faraday is promoted to head of corporate responsibility at PineBridge Investments… Robert Eccles joins the advisory board of climate tech startup Persefoni… Dale Freudenberger, ex- of FLS Energy, joins North Sky Capital as operating partner on its sustainable infrastructure team.
Sarah Ladislaw, formerly with the Center for Strategic and International Studies, is the new managing director of the U.S. program of RMI, formerly the Rocky Mountain Institute… Portfolio managers Chris Diaz, Ryan Myerberg and Colby Stilson, all ex- of Janus Capital Group, will head Brown Advisory’s new sustainable fixed-income strategy… FinDev Canada recruits Lori Kerr, ex- of the Inter-American Development Bank, as chief executive officer.
The Week’s Jobs
Living Cities is searching for a CEO in Washington, D.C. or New York… Rocky Mountain Institute seeks a principal to support its global advocacy efforts to phase-out coal… CarbonPlan is looking for a software/data engineer… CarbonTracker is hiring a head of investor outreach for Europe… Partners Group seeks an impact investment fellow in New York… Elemental Excelerator is recruiting a head of strategic partnerships and other roles in Hawaii or California… The Low Income Investment Fund names Carolyn Smith vice president of strategic communications… MCE Social Capital is hiring an impact analyst in San Francisco or the East Coast… ReFED seeks a capital, innovation and engagement director… Root Capital is hiring a senior financial analyst, a deputy chief of staff, a senior marketing associate and a director of individual giving.
That’s a wrap. Have a wonderful weekend.
– Apr. 2, 2021