TGIF, Agents of Impact!
This week has been an exercise in real-time narrative adjustment. I was as geared up as anyone for a decisive mandate on climate change and racial justice, hitched to a common purpose around defeating the coronavirus and building back better. Instead, we saw in the U.S. an even deeper divide than many imagined. That means there’s more work to be done to bring together communities that have more in common than they may think. As we heard from Agents of Impact this week, strategies for bottom-up revival – from capital for small businesses and support for entrepreneurship, to sustainable agriculture and green infrastructure and electric everything, to access to quality education and healthcare – work in red states as well as blue, in rural areas and inner cities, in the U.S. and abroad.
The U.S. election “illuminated the fact that rural and urban America have the same problems, but completely different views, creating division instead of commonality,” Sandra Moore of Advantage Capital writes from St. Louis. “We must use impact investing to close the urban-rural divide in America, using capital for good with the same intensity in rural America as we do in other countries.” What does that mean for our work? Moore asks. “We dig in. We keep stepping up for communities and people who are struggling, and make sure small businesses in distressed locations and rural areas, those owned and led by minorities and other under-represented individuals, aren’t getting shut out. We continue to invest with intentionality in those businesses that support good, quality jobs with critical benefits, wage progression and advancement—all the things that help strengthen households and communities.”
Impact Briefing. On this week’s podcast, host Monique Aiken brings in ImpactAlpha’s David Bank and Dennis Price to identify emerging themes in the U.S. election. We hear from Domini Impact Investments’ Amy Domini, Harvard’s Vikram Gandhi and the Rev. William Barber of the Poor People’s Campaign. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 7
1. Voters, local leaders and investors to Paris: We’ll be back. Voters want climate action. So do investors. Joe Biden has said the U.S. will rejoin the Paris climate agreement “on Day One,” of a Biden administration. He would have to back that talk with action, including more ambitious emission reductions goals and investments that spur job growth and COVID recovery while greening the U.S. economy. Look ahead.
2. Rule limiting ESG investing is final – for now. The U.S. Department of Labor finalized an unpopular rule seeking to turn back the tide on environmental, social and governance, or ESG, investing in retirement accounts. An overwhelming majority of investors who submitted comments opposed the rule, reflecting the $40 trillion in assets already managed using some kind of ESG analysis. More.
3. Africa’s tech startups peddle pandemic resilience. Stripe’s $200 million acquisition last month of Nigerian digital payments platform Paystack exemplified the opportunity in offering digital solutions for Africa’s informal, micro and small businesses. As Africa’s economies restart from COVID lockdowns, helping improve the resilience of the continent’s small businesses is one of the fastest paths to growth. Dive in.
- Dealflow. Data Integrated gives Kenya’s taxi operators a digital upgrade.
4. Equity crowdfunding grows up. The U.S. Securities and Exchange Commission agreed to increase the offering limit from just over $1 million to $5 million for so-called “regulation crowdfunding.” Since 2016, more than 2,800 companies have raised over $500 million through Reg CF, including microbreweries, football clubs, electric vehicle makers and mom-and-pop shops. The expansion creates “significant new opportunities for businesses to use this capital to recover from the current economic crisis or launch innovative new products and services,” says Jason Best of Crowdfund Capital Advisors. Crowd in.
5. America’s private social safety net. In the absence of continued federal COVID relief, community development financial institutions like Andy Posner’s $10 million Capital Good Fund are cutting loans for day-to-day survival: rent, utilities, food, and technology to help kids study at home. Posner spoke to ImpactAlpha about his concern that organizations like his have become a backstop to the “useless” social safety net. “We shouldn’t be it,” he says. Get his take.
6. Creative financing to counter the pandemic’s impact. Flexible investment structures that prioritize employees and customers alongside entrepreneurs and investors are helping companies preserve good jobs through the pandemic. Bhakti Mirchandani of Trinity Wall Street and Sachi Shenoy of Upaya Social Ventures round up examples of impact investors deploying flexible structures, from Upaya’s stabilization fund incentivizing companies in India to retain workers, to Boston-based Arctaris Impact Investors’ revenue-based COVID relief financing. Dive in.
7. Amy Domini’s search for ‘sustainable solutions.’ Amy Domini has been hunting for an investment edge in sustainability for 30 years. But only in the last few years has it been possible to build a public equities portfolio around solutions to major human and environmental challenges. Domini Impact Investments launched its Sustainable Solutions Fund in April. “Suddenly, there was an acceleration of need for those goods and services that we had discovered,” she says. Q&A.
The Week’s Dealflow
Locavesting. Virginia-based Micronic Technologies raises $3 million to purify water on the spot… Charlotte investors commit $58 million to preserve affordable housing… Wisconsin credit union teams up with Federal Home Loan Bank’s pandemic relief fund.
Low-carbon economy. Norway’s Statkraft to buy solar power developer Solarcentury… Climate Fund Managers and EOS Capital commit $60 million to sequester carbon in seaweed… Charm Energy raises £273,520 to help crowdfund clean energy projects in Asia and Africa.
Farmer finance. Iroquois Valley Farmland Trust raises $2 million to accelerate shift to organic.
The Week’s Talent
Drew Tulchin, ex- of Meow Wolf, joins New Mexico Angels as president… Prairie Rose Seminole, Nikishka Iyengar, Mariela Cedeño, Cheryl Cherry and Noel Andrés Poyo join Olamina’s community advisory board… Janus Henderson Investors names Paul LaCoursiere, ex- of Aviva Investors, as global head of ESG investments… Netflix’s Layla Ramirez, Credit Suisse’s Sherrise Pond and Barclays Investment Bank’s Amadou Sow are among 17 BLCK VC New York City fellows.
The Week’s Jobs
Open Capital is looking for a project leader and a transaction leader in Nairobi, and a principal of consulting in Nairobi or Kampala… US SIF seeks a director of research and education in Washington, D.C… Two Sigma is hiring an impact investment associate in Portland, Maine… Bamboo Capital Partners seeks an investment associate in Bogota.
Mission Investors Exchange is looking for a member experience associate in New York… Global Partnerships is hiring an investment director of its social venture fund in Nairobi… Big Society Capital seeks a data and portfolio manager in London… Resonance is hiring a director of innovative finance in Burlington, Vt. or Washington, D.C.
Thank you for reading.
–Nov. 6, 2020