The Week in Impact Investing: Performance

The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣 Proof of impact. Bitcoins are verified by a cryptographic approach known as “proof of work.” Other blockchains use “proof of stake” or even “proof of space and time.” To keep track of, say, emissions reductions or creation of good jobs, many impact fund managers have used… spreadsheets, if they keep track at all. That’s changing as more investment firms put impact measurement and management, or IMM, center stage. SJF Ventures this week shared its year-long landscaping of impact-data tech platforms that might move its IMM to the cloud. Demonstrating the impact of investments is how impact investors can distinguish themselves in an increasingly crowded market. “Impact drives alpha,” SJF’s Emma Sissman told me. Amen. 

Such outperformance depends on what investors do, not just what they say. Alberta Investment Management Corp. in Canada is ranked as a leader on New America’s list of the world’s most “responsible” global institutional asset owners, despite its continued allocations to Alberta’s tar sands oil industry, Imogen Rose-Smith writes in her latest Institutional Impact column. Verifying the promised climate benefits of plant- and cell-based “alt-proteins” over industrial meat remains a work in progress, reports Jessica Pothering. Generating impact data and using it well relies on human processes and careful listening, as recognized in recent raises by IMM mainstays BlueMark and 60 Decibels. Carbon markets are taking off, putting an onus on the credibility of carbon credits. Putting the issuance and retirement of those credits “on the chain” is just the beginning of crypto-enabled regenerative finance, or ReFi, report Amy Cortese and David Bank. As impact investing scales up, enterprise and fund performance will increasingly require proof of impact. – Dennis Price

🎧 Impact Briefing. Host Brian Walsh is joined by roundtable regulars David Bank and Imogen Rose-Smith to make sense of the mixed signals in impact investing and the broader economy. Dennis Price surveys impact-management tech with Emma Glissman of SJF Ventures and Sasha Dichter of 60 Decibels. Plus, the headlines.

👋 Next Call: Real-world effects of the rising price of carbon. With carbon fetching nearly $100 per ton in Europe, the price of carbon is finally getting interesting. How and where is carbon pricing showing up in your deals and investment strategies? Share what you’re seeing and we’ll round it up in The Brief (and call you up on The Call). Go beyond carbon credits to fund strategies, deal underwriting, corporate accounting, and the wild world of climate crypto with entrepreneurs and investors leveraging carbon finance for climate action.

  • Join Agents of Impact Call No. 37, Tuesday, Feb. 8, 10am PT / 1pm ET / 6pm London. RSVP today.

The Week’s Agent of Impact

Sheena Brown, Decolonizing Wealth Project / Liberated Capital. The climate crisis galvanized attention on Indigenous communities. Sheena Brown is seizing the moment to fund and empower Indigenous-led organizations that are building sustainable food systems, protecting land, water and natural resources, and restoring community health and dignity. “The practices with which we engage with the environment—taking care of the land, water, resources—are sacred and ancient,” says Brown, who directs resource mobilization at the Decolonizing Wealth Project. The project (and movement) was started by author and activist Edgar Villanueva to redistribute capital, resources and power to communities harmed by colonization and systemic racism. Last year’s global climate summit in Glasgow gave rare stage-time to women like Indigenous Youth’s Txai Surui, a member of the Suruí people in the Brazilian Amazon, and Indigenous Climate Action’s Eriel Tchekwie Deranger of the Athabasca Chipewyan First Nation in Canada. Brown, a Black woman and Native American woman from the Narragansett Tribe of Rhode Island, tells ImpactAlpha, “We need to elevate Indigenous leadership, and help folks understand that we are not invisible, that we’re not extinct, so that we are at the table and helping make decisions around how the environment is cared for and managed.”

Brown this month helped award $1 million in unrestricted grant capital across 16 Indigenous-led organizations to advance climate and conservation work and advocacy. The Indigenous Earth Fund, a program under Decolonizing Wealth Project’s philanthropic funding vehicle, Liberated Capital, is backed by individual donors as well as institutions like the MacArthur, Kataly and Ford foundations. Among the recipients: Native Organizers Alliance, which is working to build a voice for Indigenous communities at the federal level, and Bears Ears Inter-Tribal Coalition in Sacramento, Calif., which is fighting for land and resource protections while elevating “the interconnected nature of the relationship between humans, the land and spirit,” says Brown. If $1 million seems like a drop in the bucket, consider that just 0.4% of philanthropic dollars are committed to Indigenous communities and organizations. “A big part of why we’re doing this is to move more funding to support Native-led work, given the billions of dollars that move through philanthropy,” Brown says. “It’s also about creating a place for people to practice wealth redistribution as a part of their healing journey. We know some wealth has been acquired at the harm to Indigenous communities. Redistributing those resources toward reconciliation and to strengthen those communities is powerful medicine.” 

The Week’s Dealflow

Deal spotlight: European impact funds. Impact fund managers in Europe are closing large raises from institutional investors. In Sweden, Summa Equity raised €2.3 billion ($2.6 billion) for its third impact fund focused on the U.N. Sustainable Development Goals – one of Europe’s largest impact funds to date. Norway’s Verdane raised €300 million to invest in companies driving the energy transition, sustainable consumption and resilient communities – one of Europe’s largest growth-focused impact funds. 

  • Sustainable investing. Prime Capital, a German employee-owned asset management firm, raised €586 million for a sustainable infrastructure fund focused on wind energy projects in Scandinavia. In France, SWEN Capital Partners raised €150 million for an impact fund targeting renewable natural gas and circular economy companies. 

Returns on inclusion. Clear Vision Impact Fund secures $140 million to make loans to minority-led or owned small businesses… SoLa Impact, a family of social impact-focused affordable housing funds, raises $25 million from PayPal to build housing in Black and Latinx communities… Black-owned developer Mosaic raises $10 million for equitable real estate in Philadelphia… New York Life commits $50 million to Century Housing Corp. to provide loans for affordable and workforce housing developers in low-income communities.

Financial inclusion. Microtraction backs Nigeria’s Pivo, a women-led fintech, to provide working capital loans to small and medium-sized supply-chain and logistics companies… Finclusion Group raises $20 million to become a credit-first neobank… Huruma Fund, managed by Spanish impact fund manager GAWA Capital, lends $5 million to EDPYME Alternativa to lend to smallholder farmers in Peru.

Clean energy. Commercial bank loan helps Bboxx expand off-grid solar in Kenya… Also, Bboxx receives a $5.5 million loan from Africa Go Green Fund to provide clean cookstoves to low-income households in Africa… Green infrastructure fund raises $741 million for renewable energy and efficiency in India. 

Climate tech. Azolla Ventures invests in Heaten’s industrial heat pumps… U.K.-based Sylvera scores $32 million in Series A financing to help corporate partners evaluate and invest in carbon credits… Factorial Energy rakes in $200 million to commercialize solid-state batteries that it says improve driving range for electric vehicles over lithium-ion batteries.

Impact tech. Bain Capital Double Impact backs AqueoUS Vets to remove contaminants from U.S. water infrastructure… BridghtEdge, the impact venture fund of the American Cancer Society, backs biotech company CellCentric to run clinical trials for a new cancer treatment drug.

Agrifood investing. Farmers Business Network and Environmental Defense Fund launch a $25 million credit fund to incentivize farmers to implement regenerative agriculture practices.

Business digitalization. KKR invests $45 million in GrowSari to digitalize ‘sari-saris’ in the Philippines… Inventa scores $20 million to connect Brazil’s small retailers with global suppliers.

Fund news. Aavishkaar secures $56.4 million from KfW to launch an ESG fund targeting companies in Asia and Africa.

Impact management. BlueMark raises $3.8 million for impact verification and assessment.

Waste conservation. Factorial Closed Loop Partners secures $35 million from PepsiCo for a circular economy fund to invest in small-scale, modular recycling facilities in underserved communities.

The Week’s Talent

David Wennberg joins Two Sigma Impact as an executive advisor of healthcare investing… Pennrose’s Ivy Dench-Carter and Raquel Favela of National Development Council join Reinvestment Fund’s board… Deval Patrick, former governor of Massachusetts and ex- of Bain Capital, joins Harvard Kennedy School as professor of practice and co-director of the Center for Public Leadership… Eugenia Unanyants-Jackson becomes global head of ESG at PGIM, the investment management business of Prudential Financial.

Econet Group’s Strive Masiyiwa, Baroness Shafik of the London School of Economics, Bridgespan’s Thomas Tierney, and Gates Foundation’s Mark Suzman join the board of trustees of the Bill & Melinda Gates Foundation… Tanya Barnes, ex- of Blackstone, joins J.P. Morgan Asset Management’s new sustainability-focused growth private equity team… Sarah Fortt, formerly with Vinson & Elkins, and Betty Moy Huber, formerly with Davis Polk, join Latham & Watkins to head the firm’s ESG practice with partner Paul Davies.

James Manyika, ex- of McKinsey Global Institute, joins Google as senior VP of technology and society… Jonathan Pershing, a U.S. climate envoy under John Kerry, returns to the Hewlett Foundation to run its environment program, effective March 1… Tayler James, ex- of The Weather Channel, joins The Plug as director of research… Consulting firm FSG names Chirlie Felix, ex- of Teach For All, and Shumeca Pickett, ex- of consultancy Alfred Dewitt Ard, as managing directors… Jordan Park’s Lauren Booker Allen and Tideline’s Shaun Mays join BlueMark’s board.

Henry Jones will resign as president of the CalPERS board on January 21 due to health issues… Ilonka Jankovich, ex- of Taptrove Ventures, joins Rubio Impact Ventures as venture partner… Mark Taylor, ex- of BloombergNEF, joins Kayrros as vice president of energy transition… Phung Ngo-Burns, previously with Keane Group, joins Catalyze Energy as chief financial officer… Lina Page, ex- of Opportunity Finance Network, joins OFN member Homewise as senior director of communications.

The Week’s Jobs

CDC Group seeks an executive of gender and diversity finance in London… Also in London, Wellington Management is hiring an impact measurement and management associate… Maycomb Capital seeks an education finance lead for its educational resources impact fund… The Los Angeles Cleantech Incubator is looking for a fund management analyst of equity funds… FMO’s private equity team is recruiting a venture associate.

Citi Impact Fund is hiring a senior investment principal of impact investing in New York, San Francisco or Washington D.C… Thomson Reuters Foundation is hiring a senior manager of inclusive economies in London… CREO seeks a director of programs in New York… Root Capital is looking for a senior manager of foundations in Cambridge, Mass… Sustainable Business Consulting is hiring a remote senior sustainability consultant. 

Airmee is hiring a head of sustainability and innovation in Stockholm… Clermont Partners seeks a CSR and sustainability writer in the Washington, D.C.-Baltimore area… TerraCycle is hiring a sustainability brand ambassador in Portland, Ore… PayPal is looking for a head of treasury impact investing and ESG in Austin… We Don’t Have Time seeks a climate dialogue advisor in Washington, D.C… We Care Solar is looking for a program manager in San Francisco. 

Azolla Ventures is hiring an investment associate, a finance and operations associate manager and an investment analystCapShift is hiring for multiple roles, including a director of client experience, an investment operations associate and a business development associateBlackRock is hiring a vice president of sustainable product innovation… SOCAP Global seeks a director of content and programs… The Nature Conservancy is looking for a director of investments.

That’s a wrap. Have a wonderful weekend. 

– Jan 28, 2022