The Brief | July 19, 2024

The Week in impact investing: Pragmatic populism

ImpactAlpha
The team at

ImpactAlpha

TGIF, Agents of Impact! 

In today’s Brief:

  • Making space for shared imagination
  • Sodium-ion battery bonanza
  • Getting familiar with FOAKs (and other short signals)

🗣 Pragmatic populism. Manufacturing in the heartland. Energy independence. Onshoring supply chains. And standing up for the working man (and woman). The remarkable success of the US economy has occasioned a strange rhetorical convergence in convention speeches as the US careens through its topsy-turvy election campaign. To be sure, the new “unity” obscures key differences. Energy independence, of course, includes renewables, now the cheapest forms of energy, which account for far more jobs than oil, gas and coal. And standing up for workers needs to mean welcoming, not scorning, immigrants, who are powering US economic growth and, not incidentally, shoring up Social Security. “Pragmatism is rooted in tracing the practical consequences of hypotheses,” Katy Knight of the Siegel Family Endowment explained in a guest post arguing for a dose of techno-pragmatism to leaven often toxic techno-optimism. “Progress will come from engaging with people to unpack their problems and constraints, and making space for shared imagination to design solutions, both technical and nontechnical, that actually improve people’s lives.”

Pragmatic Agents of Impact are designing solutions around such shared imagination. Amy Cortese and I reported on the unprecedented array of community lenders and green bankers working with the Environmental Protection Agency to mobilize private capital alongside the Greenhouse Gas Reduction Fund. Joanna Smith-Ramani and Greg Gershuny detailed how the novel “direct pay” provisions of the Inflation Reduction Act can create wealth and resilience in underserved communities. And ImpactAlpha’s Lynnley Browning called out corporate tax avoidance as an ESG risk, the mitigation of which could finance much of the just green transition. Ben McAdams, the former mayor of Salt Lake County, Utah, told Matt Posner and James McIntyre on the new Capitol Gains podcast (part of the ImpactAlpha Podcast Network), “Local government still works. They’re solution-oriented. They’re bipartisan.” And the International Rescue Committee’s Ellen Brooks laid out for Jessica Pothering how humanitarian organizations can deploy tools of innovative finance for refugees and displaced communities. “We’re trying to get people to cross over sectors and share complementary skills and capacities so that the outcome of an investment is greater than the sum of its parts.”

It represented another form of pragmatism for the co-founders of Bitwise Industries, Jake Soberal and Irma Olguin Jr., to plead guilty this week to federal charges of wire fraud and conspiracy, as Roodgally Senatus reports. “We lied to lenders and investors in egregious ways,” Soberal and Olguin wrote in an emotional public apology. And in his latest Fiduciary Future column for ImpactAlpha, As You Sow’s Andrew Behar unmasks the oil barons and right-wing billionaires who are manipulating the free market to extend fossil fuels. Seductive rhetoric can mask an uglier reality. Do your due diligence before investing – or voting. – David Bank 

The Week’s Podcast

🎧 This Week in Impact. Host Brian Walsh takes up ImpactAlpha’s top stories with Jessica Pothering. Up this week: the strategies being used by the International Rescue Committee to bring private capital into refugee communities and by community lenders to ensure Greenhouse Gas Reduction Funds are flowing well in advance of the November election.

  • Capitol Gains. Former US Congressman and Salt Lake County mayor Ben McAdams of Utah joined the first episode of Capitol Gains. On the the newest addition to the ImpactAlpha Podcast Network hosts Matt Posner and James McIntyre will aim to untangle the threads of policy, politics and money in pursuit of a more engaged citizenry. “Right now, the focus needs to be on enabling the states and the local governments, the metros, to be our solution,” McAdams told them, “and hope that trickles up.” Read the recap.

The Week’s Deal Spotlight

Peak Energy scores $55 million for up-and-coming sodium-ion battery storage. Move over lithium-ion. Sodium-ion batteries are catching on as an energy storage alternative to the lithium-ion batteries that dominate today. While lightweight and energy dense, lithium-ion batteries rely on environmentally damaging mining for rare elements, mostly outside the US. Soda ash, the main ingredient in sodium-ion batteries, is cheap and abundant. Peak Energy, a utility-scale storage startup that launched last fall, raised $55 million in a Series A equity round for its sodium-ion solution. Xora Innovation, Temasek’s early-stage “deep tech” investing unit, led the round. “The need for a new utility-scale storage standard is not a decade away, it’s right now,” said Xora’s Phil Inagaki. Peak’s solution is an example of what TDK Ventures, which re-upped its investment, calls “challenger technologies” that don’t rely on global supply chains. 

  • Battery race. Denver-based Peak will use the funding to deploy its batteries at six customer sites and for a planned gigafactory. Santa Clara, Calif-based Natron Energy started producing sodium-ion batteries in Michigan in April. Earlier this year, China, which has an early lead, opened the world’s largest sodium-ion battery storage facility in Hubei province.
  • Chemistry lessons. Sodium-ion is just one of the alternative chemistries startups are exploring in the quest for cheap, efficient energy storage (see “Battery innovation speeds the energy transition”). Form Energy’s grid-connected batteries are made of low-cost iron, water and air and can store energy for 100 hours. The Somerville, Mass.-based company is said to be raising up to $500 million to produce batteries capable of multi-day energy storage. Portland, Ore.-based ZincFive uses nickel and zinc for what it says are safer and cheaper batteries. Fourth Power forgoes rare materials for graphite.

The Week’s Short Signals

🌍 Climate adaptation. Digital technologies such as weather forecasting, resource monitoring and climate data insights can build climate resilience in the Asia-Pacific region. A report by AVPN and Dalberg identifies ways to improve forecasting models with local data and argues for engagement with women and smallholder farmers. (AVPN)

🇬🇧 Clean energy powerhouse. Britain’s new Labour government is planning to create Great Britain Energy, an £8.3 billion ($10.7 billion) state-owned energy company headquartered in Scotland that will “own, manage and operate clean power projects” in partnership with the private sector. (BBC)

🔍 Emissions disclosures. Three-quarters of executives surveyed by Deloitte are reporting direct emissions, as mandated by the Securities and Exchange Commission’s climate disclosure rules that kick in next year. Just 15% are disclosing their indirect, or “Scope 3” emissions, which are not required. Their top challenges: lack of confidence in third-party data and inconsistent industry methodologies. (Deloitte)

♀️Funding female founders. Through economic highs and lows, global venture funding for women-led startups has been stuck at about 2% for 15 years. The latest data out of Europe, however, shows funding for mixed-gender founding teams has been on a steady upward climb to 16.3% so far this year, up from 7.5% in 2009. (Pitchbook)

⚡ FOAK familiarity. As much as 40% of carbon emission reductions rely on technologies that are not yet commercially available. Family office syndicate CREO is out with a framework to help investors get comfortable with “first of a kind,” or FOAK, climate tech deployments. Helpful hint: “First” can refer to a new project’s location, not just its technology. (CREO)

🤔 The climate 75%. Three in four Americans believe in global warming, about the same as 15 years ago (and slightly down since 2020). What’s changed is the strength of their convictions: “Americans who believe global warming exists are more confident than four years ago, while people who are skeptical are less confident,” finds a new study. (Resources for the Future and Stanford)

The Week’s Talent and Jobs

💼 See and share more than a dozen new impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here.

Michael Rea will replace Chris Stark as Carbon Trust’s CEO next month… Jessica Buendia, formerly of Dream.Org, was named chief impact officer at the Coalition for Green Capital… Ownership Works hired Danielle Boursiquot, previously with AP Realty Group, as an executive assistant for its client advisory services team… Donna Nuccio returned to Reinvestment Fund as a senior director, following a stint at Broadstreet Impact Services. 

Mercy Corps Ventures added Natalia Mondragón Segura, formerly with Latin America Partners, as a Latin America-focused investment associate… The Diverse Investing Collective named Rhia Ventures’ Erika Seth Davies, Michael Cosack of ImpactWise, US SIF’s Maria Lettini and a dozen other finance executives to its advisory board… Libra Foundation named Supriya Lopez Pillai, previously with Hidden Leaf Foundation, as president… Tracey Fung, formerly with Palladium, joined the US International Development Finance Corp. as an associate director.

Partnership for Carbon Accounting Financials appointed FirstRand’s Justine Bolton, Prajna Khanna of the Naspers-Prosus Group, and Lloyds’ Alison Vipond to its board of directors… Ryan Bowers, a cofounder of Activest, joined the Decolonizing Wealth Project as vice president of finance and operations… Laura Hohenberger, previously with Leading Cities, joined Lafayette Square Institute as a data analytics and policy associate… Sarah Spencer-Workman, formerly with CBRE, joined energy transition software venture Sparkfund as executive vice president of customer solutions. 

Donna Daniels of Possibility Labs joined the board of World Education Services… Leah Armstrong stepped down as chairperson of First Australians Capital. Jocelyn King, FAC’s founding CEO, has taken the role of chair. Abhilash Mudaliar will represent FAC as deputy chairperson… Carolyn Ezelino was promoted to managing director and head of research at Sonen Capital.

That’s a wrap. Have a wonderful weekend. 

– July 19, 2024