The Brief | December 9, 2022

The Week in Impact Investing: Proximity

ImpactAlpha
The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣 Ground up. Impact investors gathered at the Mission Investors Exchange conference in Baltimore this week to regroup and reimagine investment strategies to drive inclusion and equity, report ImpactAlpha’s Jessica Pothering and David Bank. California Endowment’s Robert Ross guided his peers to “stay proximate to the point of injustice,” quoting Bryan Stevenson of the Equal Justice Initiative in Montgomery, Ala. Nick Tilsen of Indigenous-centered NDN Collective, was more direct: “If you’re trying to impact the community and you’re not working directly with the people that are impacted by the challenges, sorry, but you’re probably not doing impact investing.” 

In his book, The Key Man, about Abraaj’s Arif Naqvi duping the global elite, journalist Simon Clark called out investors who talk about impact without listening to those who experience that impact. In his guest post, 60 Decibels’ Tom Adams cited Clark in calling for better industry-wide impact management practices. “We need to first listen to the people who we hope to positively impact through the work we do,” says Adams, “so that they can tell us what things change in their lives and, of these, which are most material to their wellbeing.” The lives of more than 100 families in Denver have been changed by the Dearfield Fund for Black Wealth, which helped with the down payments for their homes. “We’re making an impact from Day One,” Dearfield’s Aisha Weeks tells David on this week’s podcast. “They can really breathe, and they know that they’re building wealth for their children and their children’s children’s children.”

Advocates for the integration of environmental, social and governance factors in investment decisions would do well to get close to such ground truth in order to counter the well-coordinated campaign to demonize ESG, David reports. “Most people are on our side when you describe what ESG is about in plain English,” said Chris Jurgens of Omidyar Network. “It’s about companies disclosing and managing their positive and negative impacts on workers, people, planet and communities.” Such simplicity has eluded officials in Arizona, Florida, Louisiana and Missouri, who in recent months have pulled nearly $4 billion in state assets managed by BlackRock over CEO Larry Fink’s pro-ESG stance. The new front for corporate disclosure is biodiversity, writes Amy Cortese, reporting on efforts by environmental ministers from 191 countries to hammer out a global agreement to forestall extinction at the COP15 biodiversity summit in Montreal. Among the nearly two dozen targets is “the effective participation of Indigenous peoples and local communities in decision making, as well as respect over their rights to land, territories and resources.” Stay proximate. – Dennis Price

Elsewhere on ImpactAlpha:

  • Europe’s ESG edge. European asset owners are pushing for ESG in venture capital, giving Europe an edge over Silicon Valley, write VentureESG’s Johannes Lenhard, David Kampmann of the University of Oxford’s Smith School, and Houlihan Lokey’s Moriam Masha.
  • Impact carry. Tying fund managers’ compensation to impact performance is easier said than done, write Chintan Panchal and Aaron Bourke of RPCK Rastegar Panchal.
  • The Liist. It’s been a difficult year for run-of-the-mill tech funds seeking fresh powder. Fundraising for impact funds has been more resilient, as showcased in this month’s Liist, compiled by Jessica, of seven impact funds currently raising capital.
  • Cultural capital. Upstart Co-Lab’s pipeline of creative economy deals is now an investable impact strategy, reports Dennis Price.
  • Tackling plastic waste. Circulate Capital breaks down the opportunities for creating a circular economy for plastics in Latin America and the Caribbean, reports Dan Keeler. 

🎧 Impact Briefing. Host Monique Aiken has the headlines, and David talks with Aisha Weeks of the Dearfield Fund for Black Wealth about narrowing the racial wealth gap by expanding access to home ownership.

The Week’s Agent of Impact

Eric Berlow, Vibrant Data Labs: Visualizing the flows of climate finance. “I love complexity,” says Berlow, founder of Vibrant Data Labs, a “social impact data science” group. An ecologist and data nerd, Berlow spent years studying the dynamics of complex systems, from food webs and natural ecosystems to friendship ties (Berlow, naturally, has a visual map of his project portfolio). His latest project: using machine learning to map the flows of capital to climate mitigation and adaptation. Berlow partnered with ImpactAlpha, One Earth and others to launch the Climate Finance Tracker to visualize funding for climate solutions, from grants to venture capital (see, “Turning gaps into opportunities with the Climate Finance Tracker”). “There’s going to be trillions of dollars in investments in climate over the next decade,” says Berlow. “If we can bring evidence and data to bear on those decisions to be more strategically impactful, that’s our goal.”

This week, Berlow debuted a second version of the tracker, using a bottom-up natural language engine to map climate finance flows in low- and middle-income countries. The new tracker was developed in partnership with nonprofit research institute RTI International. Like the earlier U.S. map, it’s hosted on ImpactAlpha. Berlow identified $50 billion in climate-related grants and venture capital to Africa and Latin America over three years. Both maps help foundations and fund managers identify funding gaps and point their capital to where it can be most effective. “It gives us a really honest look at are we making a difference on the ground, or are we just living in an aspirational world?” RTI’s Avery Ouellette said when the map was previewed at the COP27 climate summit last month. Berlow is improving the prototypes (share your feedback). But already, they are bringing simplicity and logic to a complex problem. “The more you step back and embrace complexity,” Berlow said in his 2010 TED Talk at the University of Oxford, “the better chance you have of finding simple answers.” 

The Week’s Dealflow

Deal spotlight: Financing women-led businesses in Africa. Small businesses are drivers of jobs and inclusive economic growth. In Africa, where more than half of small businesses are led by women, catalytic capital is helping bridge the gendered financing gap. A consortium led by Mennonite Economic Development Associates, or MEDA, will manage the Africa Growth Fund, Mastercard Foundation’s new $200 million fund for female fund managers investing in small and mid-sized businesses. 

  • Fund of funds. The Africa Growth Fund’s first investment is Nigeria’s Aruwa Capital, a gender-lens fund led by a first-time fund manager Adesuwa Okunbo Rhodes. Aruwa raised over $20 million this week to help Nigeria’s small businesses better support female managers, workers and customers.
  • Catalytic capital. A $75 million partnership between the U.K.’s British International Investment and Nairobi-based African Guarantee Fund will guarantee loans from lenders to small businesses in Africa, especially women-led firms addressing climate impacts.
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Clean energy. Octopus Energy acquired solar energy developer Zestec Renewable Energy to expand rooftop solar installations at U.K. businesses… Sun King got $10 million to finance off-grid solar in Africa… Sunwealth’s Solar Impact Fund secured $2.5 million from Connecticut-based Liberty Bank for community-based solar projects in diverse communities… Sweden’s Einride, which integrates electric and autonomous vehicles into supply chains, raked in $500 million in equity and debt.

Financial inclusion. Aye Finance raised $10 million from responsAbility to provide business loans to micro and small enterprises in India… Creation Investments closed a $270 million fund for financial inclusion in emerging markets… Ford Foundation invested $10 million in Appalachian Community Capital to boost rural business lending… Kenyan social commerce startup Kapu snagged $8 million in seed financing to help consumers save on food costs.

Climate finance. Investors warm up to wildfire prevention… S&P Global acquired Shades of Green’s climate-risk assessments for bonds… Germany’s World Fund secured €50 million from the European Investment Fund to back emerging climate tech ventures in Europe.

Financing farmers. MoooFarm scored $13 million to provide India’s dairy farmers with access to credit, insurance and livestock management tools… Gawa Capital’s Huruma Fund provided a $12 million loan to Brazil’s Cresol Baser to help small-scale farmers adapt to climate change.

Impact tech. Aqua-Spark secured €15 million from Silverstrand Capital for sustainable aquaculture… Black-led sustainable materials company Aja Labs raised $2.5 million for its plant-based hair extensions… 3Bee secured €5 million to help beekeepers monitor the health of their hives. 

Inclusive communities. Austin Community Foundation provided nearly $2.9 million in low-interest loans to SGI Ventures to build permanent supportive housing and services for the homeless.

Low-carbon transition. LongPath Technologies raised $22 million in Series A funding to help oil and gas operators track methane emissions… RepAir Carbon scored $10 million for its direct air carbon capture technology… Idaho-based KORE Power clinched $75 million to build a lithium-ion battery plant in Phoenix, Ariz.

Returns on inclusion. A $10 million fund launched by Tulane University’s Innovation Institute will invest in women and minority-owned businesses in Louisiana… LISC teamed up with Colorado Health Foundation to back diverse-owned businesses.

The Week’s Talent

David LeZaks of the Croatan Institute joins Planetary Health Collective’s board… Nonprofit Finance Fund names Brenda Loya of Amalgamated Bank, Kris Putnam-Walkerly of Putnam Consulting Group, Gregory Robinson of Moody’s, and Joe Silver of Submittable to its board…  Economist Sebastián Welisiejko joins New Ventures as a partner. 

Autodesk Foundation promotes Trenton Arthur, Haresh Khoobchandani and Dara Treseder to its board of directors… Banks Benitez, ex- of Uncharted, joins Ezra Climate as head of venture development… Ontario Teachers’ Pension Plan Board appoints Anna Murray, ex- of Sun Life Capital Management, to the role of senior managing director and global head of sustainable investing.

The Week’s Jobs

In Washington, D.C.

The World Bank is looking for a director of development impact measurement… The Nature Conservancy is recruiting a senior policy advisor for agriculture… CIBC is looking for an ESG investing summer intern… World Food Program USA seeks a corporate partnerships manager.

In New York

Global Impact Investing Network is looking for a director of climate solutions… Blue Dot Capital seeks a senior associate or associate of ESG research and integration… LISC seeks a legal operations manager… The Rockefeller Foundation is recruiting a regenerative agriculture manager… Wakefern Food Corp. is hiring a manager of corporate social responsibility. 

Elsewhere in the U.S.

Hedge + Impact headhunting firm is recruiting an impact investing analyst in Michigan… WEPOWER is recruiting a director of political strategy in Saint Louis, Mo… Selby Jennings is recruiting a climate tech VC partner in San Francisco… Omidyar Network is hiring a principal for responsible technology in Redwood City, Calif… The MacArthur Foundation is looking for a senior impact investments officer in Chicago… The Nature Conservancy is looking for a director of operations and business development in Little Rock, Ark. 

Remote and global jobs

The Environmental Defense Fund seeks an energy transition policy manager… The Utah Nonprofits Association is looking for a programming and advocacy manager… Winrock International is hiring a program officer for net-zero climate services… Hedge + Impact seeks an impact private equity principal for Latin American and the Caribbean in Mexico City.  

That’s a wrap. Have a wonderful weekend. 

– Dec 9, 2022