TGIF, Agents of Impact!
🗣 Show me the impact. The pushback against impact-washing is spurring investors of all stripes to raise their game. Impact outcomes, once the province of private market investors, are becoming core to public-market strategies as well, as Veridien Global Investors’ Ariane Mahler lays out in this week’s Impact Briefing podcast. The once-siloed endowments of some philanthropic foundations are increasingly reaching for social and environmental outcomes, as new reports from Builders Initiative and Urban Institute make clear. Next-gen MBAs from Columbia, Yale and Northwestern are straying from legacy finance to “drive sustainability impact at scale,” with innovative models and tools, as this year’s finalists of this year’s Kellogg-Morgan Stanley Sustainable Investing Challenge show. The $66 million municipal bond to finance a light rail to improve downtown mobility in Kansas City has a “net positive” impact, according to HIP Investor, which is working with ImpactAlpha to highlight muni-bond issues with social and/or environmental significance. Even anti-woke crusaders, who would bar investors from pursuing ESG strategies, are engaging market forces to drive their own social outcomes. Their response to Bud Light’s partnership with a transgender TikTok influencer? Protests, boycotts and divestment.
The market for positive outcomes is growing. Phyllis Kurlander Costanza, ex- of UBS, and Jason Saul of the Impact Genome Project, are packaging up pro-social impact, like improved mental health and educational achievement, in a new marketplace, report ImpactAlpha’s David Bank and Amy Cortese. OutcomesX lets corporations and governments buy impact outcomes in the form of “verified impact units” from nonprofits and social enterprises. ImpactAlpha contributor Shafali Anand went to an urban slum in India to report on investment opportunities for social and climate resilience. Agents of Impact are leveraging artificial intelligence to better target climate capital in emerging markets, as Abt Associates’ Manuel Bueno and Darius Nassiry of Climate Finance Advisors detail in a guest post. 2X Global’s Suzanne Biegel is seeking to demonstrate the compound impact of climate + gender investing with Heading for Change, a new philanthropic fund. Biegel shared her diagnosis of metastatic lung cancer, in part to underscore the urgency of her legacy project. “You don’t have to wait five or 10 years for this to be a thing,” Biegel says. “It’s a thing already.” – Dennis Price
The Week’s Podcast
🎧 On this week’s Impact Briefing. “Net zero is not going to get us anywhere,” Ariane Mahler of Veridien Global Investors tells David Bank. “You need negative emissions, not just net zero.” Many “sustainable” ETFs loaded up on tech stocks to reduce their carbon footprints but don’t directly target climate solutions. Mahler is part of a new crop of public-equity investment managers looking for companies that derive the bulk of their revenues from cutting carbon. She says Climate Action, Veridien’s forthcoming exchange-traded fund (ticker: CLIA) will include names in construction, waste management, agriculture, transportation and energy that “have as their main focus the reduction of greenhouse gas emissions.”
Why play in the public markets? Because that’s where the capital is. “The companies we invest in build gigawatts of solar farms – hundreds, thousands of them,” she says, “so they have a lot more impact. If you want to measure them, it’s going to be in terms of gigatons, not tons, of CO2 avoided.” Low-impact sustainable ETFs have taken a hit as tech stocks have suffered (and oil has soared), but climate solutions can outperform, Mahler says. “There are very strong, secular tailwinds behind these companies’ business models,” she says. Renewable energy is abundant and cheaper than other forms of energy. “We’ve reached that point where, frankly, even the climate-skeptic investors are embracing these technologies.” Host Brian Walsh has the headlines.
- Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
The Week’s Dealflow
Deal spotlight: COVID recovery funding. Community development financial institutions and minority depository institutions played a crucial role in channeling Covid-relief funding to small businesses in low-income, rural and communities of color, where big banks and traditional lenders have little presence. This week, the U.S. Treasury came through with more than $1.7 billion in grants to more than 600 CDFIs via the Equitable Recovery Program, the largest grant program to date of the Treasury’s CDFI Fund. The CDFI Fund’s Jodie Harris said the grants will “increase availability of financing and capital for small businesses, promote affordable housing, and improve accessibility to loans that help families make ends meet — all of which were compromised by the pandemic.”
- Build back better. Among the recipients are Anchorage, Alaska-based Cook Inlet Lending Center, which pivoted from home-mortgage lending to small-business lending during the pandemic, and Little Rock, Ark.-based Southern Bancorp, which processed federal Covid-relief loans as small as $2,000.
- Small-business funding. Last year, 162 CDFIs and MDIs, mainly from Mississippi, Louisiana, North Carolina, California and Texas, received nearly $8.3 billion under the Emergency Capital Investment Program to boost small-business lending. The U.S. Impact Investing Alliance called on government “to prioritize consistent levels of funding and bold policy solutions to support the CDFI and MDI industry and the communities they serve.”
- Share this post.
Agrifood investing. AGRI3 Fund secured $13.5 million to catalyze capital for sustainable agriculture and forestry… Investors backed Kenya-based sustainable aquaculture venture Victory Farms… Scotland’s Solasta Bio’ secured £4 million for sustainable agri-inputs… Carbonwave raised $5 million to ramp up production of its seaweed-based agriculture inputs, cosmetics and materials.
Climate and clean tech. Autodesk Foundation backed L.A.-based ChargerHelp… Collab Fund and Union Square Ventures backed carbon-capture startup Noya… Spring Lane Capital invested in Spring Free EV… The Powering Renewable Energy Opportunities program invested in five African startups… Hawaii-based Hohonu raised $1.8 million for its data platform that focuses on coastal flooding risks… Clean Growth Fund invested in industrial heat pump developer Futraheat.
Education and skills. JFF Ventures backed Territorium to expand the reach of its AI-powered credential tracking system… Reach Capital bet on the “unbundling” of schools with a $215 million fund.
Financial inclusion. South African earned wage access venture Paymenow raised 250 million rand in debt funding from Rand Merchant Bank.
Impact tech. S2G Ventures launched its Special Opportunities Fund for sustainable “hard tech”… Blokable scored $5.5 million to build affordable modular housing units.
The Week’s Talent
Paul Bodnar, former global head of sustainable investing at BlackRock, joined Bezos Earth Fund as director of sustainable finance, industry and diplomacy… Hiro Mizuno tweeted that he will step down from Tesla’s board at the next shareholders meeting (for context, see, “Hiro’s Journey: Japan’s pension fund chief rallies ‘universal owners’ around sustainable finance“)… Jarron Smith, ex- of TIAA, joined Zeal Capital Partners as chief operating officer and managing director… Varshini Prakash will step down from her role as executive director of Sunrise Movement in the fall.
The Week’s Jobs
💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.
The Global Impact Investing Network seeks a global head of IRIS+ standards… The World Economic Forum is recruiting a metaverse governance lead… Goldman Sachs is recruiting an impact measurement lead and associate… The New York State Insurance Fund has an opening for a senior ESG and sustainability lead… LISC is looking for a portfolio reporting and impact management analyst… The Surdna Foundation has an opening for a program officer for inclusive economies.
Other U.S. locations
Women’s World Banking is hiring a development and strategic partnerships director… Accion is looking for an operations fund manager for its Accion Impact Management team… Duke University has an opening for an energy and climate policy director in Durham… KACE Company seeks a corporate social responsibility manager in Ashburn, Va… In Washington, D.C., 57 Stars is hiring an ESG and impact analyst, and the International Finance Corp. seeks a senior climate economist… Sorenson Impact is on the hunt for a business systems analyst in Salt Lake City.
Vontobel Asset Management is hiring an impact and ESG equity research analyst in Zurich… FMO is hiring a sustainability reporting officer in The Hague… Triodos Investment Management seeks a customer due diligence expert in the Netherlands… Global Partnerships seeks a Latin America portfolio officer in Bogota… Incofin is looking for a Nairobi-based private equity associate for its Water Access Acceleration Fund… The UNDP is on the hunt for a sustainability and climate specialist in Singapore.
Remote and other jobs
Maroon Invest Global is on the hunt for a health and climate venture fund partner… Kiva is looking for a strategic partnerships manager… Stripe is hiring a finance associate for its carbon removal advance purchase initiative, Frontier… Cogent Consulting is recruiting a part-time impact investment analyst… Health Forward Foundation seeks an impact strategist.
That’s a wrap. Have a wonderful weekend!
– April 14, 2022