TGIF, Agents of Impact!
Reality bites. System change, like nation building, relies on a large dose of magical thinking. That innovation is welcome, transformation durable, actors rational. Then they aren’t. This week, in Afghanistan – and Haiti and Lebanon and elsewhere – reality intervened. Fragile gains are reversed. Survival becomes paramount. Persistence is heroic. In the U.S., community lenders are only now unwinding business lending practices that have long excluded business owners of color (No. 4). Global carbon markets are heating up after a decade of torpor, even as the climate heats faster (No. 3). ESG investing is the fastest-growing part of financial services, except perhaps for overstated claims of ESG progress and impact (No. 2). The arc of the moral universe may or may not bend toward justice, sustainability and inclusion. Nevertheless, Agents of Impact persist. – David Bank
🎧 Impact Briefing. On this week’s podcast, host Brian Walsh enlists roundtable regulars Imogen Rose-Smith and David Bank to dissect ESG and Imogen’s latest column (see No. 2). Plus, the headlines. Tune in, share and follow us on Apple, Spotify or wherever you listen.
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Dealflow Spotlight
Impact bank goes public. Digital bank Aspiration has enlisted five million members in eight years with financial services that promise positive social and climate impact. pact. Aspiration will go public, and become a public benefit corporation, via a merger with InterPrivate III Financial Partners, a special purpose acquisition company, or SPAC. Once completed, Aspiration would “really be the first ESG-focused financial institution in the public markets,” Aspiration’s Andrei Cherney told employees. “We would be a company in the public market that is pioneering sustainability-as-a-service.”
- People power. Cherney told ImpactAlpha the newly public company will roll out its Aspiration Zero credit card to help consumers offset their carbon footprints, and business-to-business services that advance carbon neutrality for companies like Intel. “As consumers, we have enormous power,” Cherney says. “It matters whether we’re spending at businesses that do better for the environment and their employees.”
The Week’s Big 6
1. Peril of ESG whistle-blowing. Desiree Fixler says she was fired from DWS Group, the asset management business of Deutsche Bank, after speaking up about the firm’s inflated environmental, social and governance, or ESG, accounting. “Inside firms and funds, ESG experts have been sidelined, or worse, for speaking out or raising objections to investment or business decisions,” writes contributing editor Imogen Rose-Smith, who calls on the sustainable finance industry to “stop indulging the bullies and do a better job of supporting the true allies and champions.” Speak up.
2. Playing the carbon markets (podcast). Boring backwaters no more. Rising carbon prices in the European, Californian and voluntary emissions-trading markets have investors mobilizing to secure early allowances and credits, says fund manager Edwin Datson on the latest Agents of Impact podcast. Rising demand and shrinking allocations of allowances could push carbon above $100 per ton as early as this year. Suddenly, even ambitious carbon abatement projects “make an awful lot of sense from a net-present-value point of view,” Datson says. Tune in.
- Modeling climate-tech impact. Some 70 gigatons of emissions need to be removed from the atmosphere each year to meet climate goals. Assessing the emissions-reduction potential of ventures and technologies can help investors put capital to its most effective use. Such modeling “can better inform these long-term bets on the future,” writes Sarah Kearney of Prime Coalition, which is refining its open-source CRANE tools. Do the math.
3. Rethinking risks in community lending. Community development financial institution Pacific Community Ventures found its underwriting practices were rejecting too many diverse-led businesses for loans. PCV eliminated minimum credit scores and collateral requirements and lowered thresholds for revenues and profit margins. PCV’s Bulbul Gupta called on other CDFIs “to root out underwriting habits and approaches to ‘risk’ that are rooted in systemic racism.” Rewrite the rules.
4. The case against – and for – blended finance. Market distortion. Ineffective impact. Lack of transparency and accountability. Joan Larrea of Convergence takes on criticisms of the emerging practice of blending philanthropic and public funding to accelerate private investment in underserved sectors and markets. Point, counterpoint.
5. Sorting impact labels. Are you doing “impact investing,” “ESG integration” or “thematic investing”? And what’s the difference? “Truth in Impact“ from consulting firm Tideline details the firm’s impact classification framework to help companies and investors parse and compare products and strategies. (Disclosure: Tideline is a sponsor of ImpactAlpha). Learn more.
6. Short takes. The Shareholder Commons took on systemic risk, or “beta” issues with shareholder resolutions at YUM! Brands, McDonald’s and two dozen other companies this proxy season… Robert Raben of the Diverse Asset Managers Initiative slammed U.S. Senators Pat Toomey and Ron Johnson over their implications that boosting diversity is incompatible with fiduciary duty… The Interfaith Center on Corporate Responsibility called out Johnson & Johnson for vaccine injustice for exporting COVID vaccines from its plant in South Africa to Europe.
The Week’s Dealflow
Climate tech. Chris Sacca’s Lowercarbon Capital raises $800 million for climate tech… GreenLight Biosciences agreed to go public in a $1.2 billion merger with Environmental Impact Acquisition Corp., a special purpose acquisition company… Southern Company spins out carbon offset startup Cloverly in a $2.1 million deal led by Tech Square Ventures… EV charging software company AmpUp raised an undisclosed sum from Goodyear Ventures, Foothill Ventures and TechNexus Venture Collaborative… Nitricity secures $5 million investment to electrify fertilizer production… Houston-based biotech company Cemvita Factory raises Series A financing to reduce the carbon footprint of heavy industry, like chemical manufacturing and mining.
Green infrastructure. FullCycle Climate Partners invests in water-tech startup InPipe Energy… Community solar developer Nexamp secures $680 million in debt and equity financing… Germany-based KGAL Investment Management launches a renewable energy fund aligned with Europe’s new Sustainable Finance Reporting and Disclosure regulations… Fund for artisans backs Ilumexico to expand access to solar power for rural business… Woman-led lithium ion battery maker I-G3N secures $1.3 million to support solar adoption in South Africa.
Health and wellbeing. On-demand women’s and family health startup Maven raises $110 million… New York-based Health In Her Hue raises $1 million to offer digital healthcare services tailored to women of color… International Finance Corp. commits $3 million to Quest Medical Imaging Ghana to increase access to diagnostic services… Clinify Health and HUED raise funding to improve access to health providers for underserved communities.
Inclusive communities. IMPACT Community Capital raises $210 million to preserve affordable housing in the U.S… The Ford and Robert Woods Johnson foundations commit to HouseUS Fund to address the U.S.’s affordable housing crisis… Low Income Investment Fund and Purpose Built Communities launch a $45 million Accelerator Fund to support neighborhood initiatives addressing racial equity, economic mobility and health.
Small businesses. Fintech Klub secures $20 million in debt and equity to provide revenue-based financing to digital businesses in India… Blue Like an Orange backs fintech Credijusto to support Mexico’s small businesses… Nigeria’s Omnibiz raises $3 million to connect small retailers with consumer goods companies via a low-tech platform.
COVID recovery. Global Partnerships’ impact-first debt fund raises $45.5 million for the COVID recovery… International Finance Corp. and FMO lend $50 million to I&M Bank to support Kenyan small businesses in the COVID recovery.
Education and skills. Social Finance raises $49.9 million for workforce-focused UP Fund… Achieve Partners takes a stake in Cloud for Good to establish an apprenticeship program for Salesforce service providers.
Returns on inclusion. Apple’s inaugural Impact Accelerator includes 15 Black and Brown climate startup founders… PNC Financial Services Group closed an inaugural social bond issuance of $700 million for projects that promote positive social outcomes in underserved populations.
The Week’s Talent
BlackRock’s Sandra Boss, U.N. special envoy Hiro Mizuno, S&P Global’s Douglas Peterson, Generation Investment Management’s David Blood and former Danone CEO Emmanuel Faber are among the headliners of an Impact Task Force convened by the G7. Other Agents of Impact among the 100+ task force members: Courageous Capital’s Laurie Spengler, LeapFrog’s Andrew Kuper, Morgan Stanley’s Audrey Choi, CDC Group’s Nick O’Donohoe, Albright Stonebridge Group’s Elizabeth Littlefield, Blue like an Orange’s Bertrand Badré, JUST Capital’s Martin Whittaker, the IFC’s Neil Gregory, Social Finance’s Tracy Palandjian, Temasek’s Eliza Foo and the GIIN’s Amit Bouri.
Andrew Rabinowitz, ex- of Marathon Asset Management, joins K2 Integrity Holdings as co-chief executive officer to expand ESG asset management and consulting… Mark Garcia, ex- of Thomas H. Lee Partners, joins Arctaris Impact Investors as chief financial officer… Sarah Drinkwater is stepping down as director of responsible technology at Omidyar Network… Dorian McCorey and Muriel Foster join BLCK VC as community manager and program officer, respectively.
US Equity Holdings’ Chester Aldridge joins the board of AVG Group Sarl’s Nordic ESG and Impact Fund… Trella Walker is named interim CEO and president of Nonprofit Finance Fund. CEO Antony Bugg-Levine announced his departure in June… David Su, ex- of Norwest Venture Partners, will co-lead the global impact arm of Apax Partners… Liliana Alvarado is promoted to executive director at Ethos Public Policy Lab.
Cindy Tindell, ex- of NextEra Energy, joins TPG-backed Matrix Renewables as U.S. managing director… Marion Araque, ex- of All Raise, joins Kapor Capital as director of portfolio services… Andrew Hattori, previously with San Francisco AIDS Foundation, joins the East Bay Community Foundation as vice president of marketing and communications.
The Week’s Jobs
BlackRock is recruiting a director of fundamental research for impact in New York… Confluence Philanthropy is looking for a climate finance director, an operations and finance manager and a digital associate… Planet FWD is hiring a head of business development in the San Francisco Bay Area…The European Central Bank is looking for a climate scientist… Nonprofit Finance Fund is recruiting a loan officer… Participant Media seeks a community manager in Los Angeles.
Capshift is looking for a product operations manager and an impact investing research fellow… Village Capital seeks an economic opportunity practice lead in Washington, D.C… Sorenson Impact is hiring student fellows… B Lab is recruiting a new global CEO… Elevar Equity is looking for an associate of capital partnerships, location flexible… Owl Ventures seeks an executive assistant in San Francisco… Zebras Unite is hiring a community catalyst to lead its Philadelphia Entrepreneurial Ecosystem Initiative… 17 Asset Management seeks stakeholder engagement fellows.
JFF is recruiting a senior program manager for its workforce training initiatives… Humboldt Area Foundation is hiring a director of impact and project investment… Finance in Motion seeks a senior expert of impact and sustainability in Frankfurt… Water.org is recruiting a strategic development executive… Just Capital has an opening for a managing director of programs… The Crane Institute of Sustainability seeks a membership manager for its Intentional Endowments Network.
Candide Group is hiring a portfolio analytics manager in Oakland… The Asia Society Policy Institute seeks an associate director of climate… Techstars is recruiting an ESG project manager, a climate change practice entrepreneur-in-residence and a sustainability accelerator entrepreneur-in-residence… Abacus is hiring an investment research analyst in Santa Monica, Calif… Rippleworks is looking for a venture director of projects.
That’s a wrap. Have a wonderful weekend.
– Aug. 20, 2021
