The Week in impact investing: Pushback

The team at

ImpactAlpha

TGIF, Agents of Impact! 

The Call No. 21: Election Impact. Doesn’t ‘policy’ imply ‘politics’? Does civic engagement really mean get-out-the-vote? To keep the tent big, impact investing has long steered clear of partisanship. But this November’s election may represent a special case. Does systemic-risk mitigation, not to mention progress on sustainability and inclusion, require impact investors to rise to this political moment? Join Beeck Center’s Sonal Shah, Nonprofit Finance Fund’s Antony Bugg-Levine, Blue Haven Initiative’s Liesel Pritzker and i(x) investment’s Trevor Neilson in a provocative conversation with David Bank and Monique Aiken on ImpactAlpha’s Agents of Impact Call No. 21, Thursday, July 30 at 10am PT / 1pm ET / 6 pm London. RSVP today.

Impact Briefing. On this week’s podcast, Monique shares her impact journey and chats with David about what’s coming up at ImpactAlpha. Plus, excerpts of our interview with Native American Natural Foods’ Dawn Sherman, this week’s Agent of Impact. Tune in, share, and follow us on Apple, Spotify or wherever you listen. 

The Week’s Big 7

1. Investors push back against the Trump administration’s anti-ESG rules. Contradictory. Contemptuous. Fatally flawed. These are just a few of the adjectives investors are using in advance of next week’s deadline to comment on a rule proposed by the U.S. Department of Labor that would create new obstacles to environmental, social and governance, or ESG, investment options. The U.S. Impact Investing Alliance says it’s “the latest example of a short-sighted and ideological crusade to stifle the growth of the ESG investment market.” Adds Morningstar’s John Hale: “This is why we have elections.” Weigh in.

2. Redressing community grievances. Even well-intentioned projects can have adverse effects. The UNDP’s proposed guidelines for SDG-linked private equity funds and bond issuers include grievance mechanisms to redress stakeholder complaints. Impact investors might consider following suit. “A key tool of good governance is hearing from the very communities who are impacted by investments,” Accountability Counsel’s Margaux Day told ImpactAlpha. Listen up

3. Green new deal, grassroots-style. Weary of waiting for politicians to pass green stimulus measures? New investment crowdfunding platforms WaterWorks and Raise Green let everyday citizens launch and invest in sustainable projects and ventures. “We don’t have time to wait,” Raise Green’s  Franz Hochstrasser tells ImpactAlpha. Get going

4. For corporate VC funds, sustainability is strategic. Amazon, Microsoft, Citi, Merck, and Unilever are putting their corporate balance sheets to work for sustainable innovation. With more than $22 trillion in cash, and access to more via green bonds, corporations “have an immense opportunity to accelerate sustainability by leveraging their core businesses, operations, and global supply chains,” Orange Silicon Valley’s Moses Choi writes in a guest post. More

5. Maintaining SDG momentum in the age of COVID. The pandemic and related shutdowns are compounding what already was a $2.5 trillion annual funding gap to achieve the Sustainable Development Goals. James Hills and Tom Adlam of the U.K. Department for International Development describe nearly a dozen market-building initiatives DFID is supporting to remove hurdles and increase the flow of impact capital in high-need regions like sub-Saharan Africa and South Asia. Explore

6. Laboratory for capital access. The Kauffman Foundation’s Capital Access Lab awarded a total of $3 million to five “alternative” funds exploring revenue-sharing, ‘collaborative endorsements’ and other new models to support diverse entrepreneurs. Indie.vc plans to expand its “scouts” referral program. Melissa Bradley says her organization, 1863 Ventures in Washington, D.C., will use the support to advance “New Majority entrepreneurship, job creation and community impact in historically overlooked and underserved communities.” Dive in

7. Sir Ronald Cohen writes the book on impact. Sir Ronnie, as he’s known, has spent 20 years driving the development of what is now known as impact investing, and recounts that journey in Impact: Reshaping Capitalism to Drive Real Change. “Ronnie tells the story of the growth of this movement so well because he has been a central part in so much of it,” writes CDC Group’s Nick O’Donohoe in a review and tribute. Read up.

The Week’s Agent of Impact

Dawn Sherman, Native American Natural Foods. The buffalo is the perfect metaphor for what it’s like to be at the helm of a Native enterprise, says Sherman. “Buffalo face the storm. During any kind of winter storm, they face it and they walk into the storm, because they know that eventually they will walk out.” This month, Native American Natural Foods, took a big step out of a storm it’s been weathering for years. The maker of the popular Tanka buffalo snacks raised its first round of institutional funding, after ensuring the deal’s terms protected the enterprise’s social mission and Native ownership. Investors Libra Social Investment Fund, Clearinghouse CDFI and Highlands Associates embraced the vision of founders Karlene Hunter and Mark Tilsen, who launched NANF on South Dakota’s Pine Ridge Indian Reservation in 2005 to restore buffalo to Native lands, provide livelihoods to the Lakota tribal community, and bolster local food security and health. “The terms fit with the fabric of who we are,” Sherman told ImpactAlpha.

Sherman, a member of the Shawnee and Delaware tribes, joined NANF eight years ago to make a positive impact on her community, hard hit by poverty, food insecurity and “rural decay.” She became CEO two years ago. “We’re seeking justice,” says Sherman. “Not only for the land, for Native visibility, for oppression, but also for food security, systems and sovereignty.” She was surprised how difficult it was to attract even impact investors. “Many investors wanted a venture capital-type exit. That just didn’t fit for us because we have such a big mission.” There are hundreds of Native-owned food companies, but few have been able to raise investment capital. Many investors don’t know or aren’t interested in learning how to work with Native entrepreneurs and communities, or steer away from the poverty and lack of resources. “We’ve seen a lot of investment money that goes just up to the border of the reservation, but they never take that step over the border,” she says. To those who dismiss Native businesses and projects as too risky, she adds, “You don’t get reward without risk.” 

The Week’s Dealflow

Fund news. Nuveen raises $150 million for inequality and climate change impact fund… SVB Financial Group closes $30 million debt fund for Latin America… DILA Capital looks to underserved Latin American markets with its fourth fund.

Agrifood investing. Cambridge Crops rebrands as Mori and raises $12 million for food preservation tech… Alt-dessert: Noops’ dairy-free pudding draws investors; Coconut Bliss attracts an acquirer.  

Edtech. Vedantu closes $100 million in India’s red hot edtech market… TeleTeachers clinches $2.8 million to boost distance learning for students with disabilities… SustainVC backs online education provider Yellowdig. 

Financial inclusion. E-commerce startup TradeDepot adds financial services for small shops… Zambia’s Lupiya raises $1 million for digital micro-lending… Nonprofit lender Fair for You scoops up £7.5 million. 

COVID response. USAID taps Vital Capital for COVID relief funding for Kenyan businesses… Lowe’s backs LISC’s COVID relief efforts with $55 million.  

Impact tech. Brazil’s residential solar finance startup Solfácil raises $4 million… UWill raises $3.3 million to match college students with mental health services.

Conservation finance. Schmidt Marine Technology Partners awards $1.5 million to reduce coastal pollution. 

The Week’s Talent

Barbara Zvan, a former green finance advisor to the Canadian government, is named president and CEO of University Pension Plan Ontario… Planet Tracker names John Willis, formerly with Sustainable Insight Capital Management, as director of research. Matthew McLuckie becomes Planet Tracker’s director of investor relations.

The Week’s Jobs

Transform Finance is hiring a program coordinator for its Capital Strategies Program in New York… Candide Group is looking for a managing director in Oakland… East Bay Permanent Real Estate Cooperative is hiring an investment and fundraising director in Oakland, Calif… MSCI is recruiting an ESG sales specialist in New York… Farming cooperative Fonterra seeks a corporate sustainability manager in Auckland, New Zealand.

Finance in Motion is looking for an intern for debt investments in Frankfurt… Danone has an opening for a sustainability, nature and social advocacy apprenticeship in Paris… Nonprofit architecture and real estate firm Designing Justice + Designing Spaces is recruiting a director of real estate development in Oakland… Mercy Corps is looking for a climate change research consultant… private bank Quintet is hiring a CSR and sustainable investing strategist in Zurich.

Northeastern University’s D’Amore-McKim School of Business is recruiting an adjunct lecturer to teach social entrepreneurship in Boston… Norfund is looking for an associate in Cape Town… Big Issue Invest seeks a finance director in London… One Acre Fund is recruiting a global finance controller in Kigali…. The Workers Lab is taking applications for its summer 2020 Lab Innovation Fund for worker health and safety.

Thank you for reading.

–July 24, 2020